DIAZ NIṄA MAE O.

BSA 2A

1. In Figure 2-1 - Relationships between Transaction Cycles, what is the end result of this cycle to
an organization? Discuss how each cycle phase.

The transaction cycle is probably linked to the production system that is tied to the cycle in which all
the sorts of enterprise operate. Figure 2 demonstrates a three-phase cycle; however it is generally
essential whether of them or the cycles is important. In my opinion, the end result of that cycle was
the revenue cycle because it involved the process of creating and preparing services. It is the
beginning of a method in which the financial process can be engaged. Buyers are sold completed
items through the use of the revenue cycle, which includes executing cash transactions, cost of sales,
and the receipt of payment upon the credit terms. Normally utilized for keep a watch on the
company's working capital by assessing their profit-generating operations it assists managers in
determining on prospective changes by evaluating the organization's cycle toward any accessible
cycle of rivals. It's indeed important to obey the cycle so that a firm might manage all income and
also total received from debtors and also track quasi by borrowers. However, while adopting a
sustainable income cycle system, the business should analyze its costs to see if it is cost-effective.

To explain further the three cycle phase which are the expenditure cycle the conversion cycle and
the revenue cycle.

The Expenditure Cycle is an information flow that provides the total consumption of expenses. It’s a
spending money that something to record and to keep the category of cost and an account type
that is utilized when things and services are purchased and used over time, eliminating the need to
separate the two occurrences. For example of an expenditures might be the amount you expended
on stationery. This initiative has consumed an inordinate amount of time, cash, and campaign
money.Second is The Conversion Cycle as cycles where financial transaction is recorded involving
utilization of labor, materials, and maintenance to generate a product into a good operation and
Defined as the average time between when a commercial firm pays for a certain inventory investment
and when the organization gets payment on the record from its client. The conversion cycle is divided
into two key system components: manufacturing or the production system and cost accounting. It
includes all components or the benefit like in manufacturing it authorizing the work to be performed
and the release of raw materials into production, and directing the movement of the work-in-process
through its various stages of manufacturing. And the production of cost accounting is a type of
management accounting that tries to capture an organization's corporate production cost by measuring
expenditures of each stage of production as well as fixed assets, such as a leasing fee. conversion
cycle is of little value by itself but could be a game-changer when used to compare how fast inventory
moved between two or more periods, and when making decisions to improve future inventory
movements. Last is the Revenue Cycle, this cycle will use best practice processes enabled by highly
optimized technology. By using this combination of process and technology, organizations may
realize efficiencies driven by improved workflows; reduced manual intervention; and more relevant,
reliable, and timely decision-support information. This section examines alternative information
technologies used in the revenue cycle. The first of these is a sales order system that employs batch
processing and uses sequential files for storing accounting records.