Accounting Information Systems 2nd Edition Richardson Test Bank

Accounting Information Systems 2nd Edition Richardson Test Bank
Accounting Information Systems 2nd Edition

Richardson Test Bank
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Chapter 06
Purchases and Payments Business Process
Answer Key
True / False Answers

Refer to the following UML class diagram to answer questions 1 to 5 below about the relational
database based on this model.
1. The Purchase Orders table would have five foreign keys.
Answer: False
AICPA: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 06-06 Develop structure models for the purchase and payment process using UML class diagrams
Source: Original
Topic: Implementing Relational Databases from a UML Class Diagram of the Purchase and Payment Process
2. The Cash Disbursements table would have three foreign keys.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
3. The association between Purchase Orders and Products would be implemented with a linking table.
Answer: True
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
AICPA: Analytic
Blooms: Understand
Source: Original
4. The association between Purchase Orders and Cash Disbursements would be implemented with a linking
table.
Answer: False
AICPA: Analytic
Blooms: Understand
Source: Original
5. The Purchase Orders table would contain two foreign keys to implement the associations with Employees.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
6. The Purchases table would have four foreign keys.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
7. The associate between Purchase Orders and Purchases would be implemented with a linking table.
Answer: False
AICPA: Analytic
Blooms: Understand
Source: Original
8. The Purchase Orders table would have the same foreign keys as the Purchases table.
Answer: False
AICPA: Analytic
Blooms: Understand
Source: Original
9. Each Purchase Order would be ultimately linked to one cash disbursement.
Answer: False
AICPA: Analytic
Blooms: Understand
Source: Original
10. The Cash Disbursements table would have three foreign keys.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
11. The Products table would include a foreign key to link it to Product Categories.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
12. The association between Purchase Orders and Cash Disbursements could be implemented with a foreign
key in either table but not both.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
13. The linking table between Supplier Categories and Product Categories would likely contain the attribute
summarizing year-to-date purchases for each supplier category and product category combination.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
14. The linking table between Purchase Orders and Products would likely indicate the quantity of each
product ordered and the quantity of each product received.
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
15. A query using Purchase Orders and Cash Disbursements could report accounts payable by showing records
where the foreign key was NULL (blank).
Answer: True
AICPA: Analytic
Blooms: Understand
Source: Original
Multiple Choice Questions

16. Many companies record both purchase orders and purchases; when would such a company recognize the
purchase?
A. When the purchase order is issued.
B. When the supplier receives the purchase order.
C. When the products are received from the supplier and accepted.
D. When the products are sold.
AICPA: Analytic
Blooms: Understand
Learning Objective: 06-01 Describe the business activities that comprise the purchase and payment process
Source: Original
Topic: Purchases and Payments Process
17. In a BPMN collaboration model of the purchase process, one pool describes the focal organization’s
activities and the other pool describes what?
A. The supplier’s activities
B. The customer’s activities
C. The sequence of steps in the process
D. The message flows between the pools
AICPA: Analytic
Blooms: Understand
Learning Objective: 06-02 Develop an activity model of the purchase and payment process using BPMN
Source: Original
Topic: Purchase and Payment Process Using BPMN
18. In a BPMN collaboration model of the purchase process, which of the following is the appropriate term for
the message flows between pools?
A. Orchestration
B. Choreography
C. Collaboration
D. Intermediate events
AICPA: Analytic
Blooms: Understand
Learning Objective: 06-03 Understand and apply different activity modeling options
Source: Original
Topic: Applying Activty Modeling Options
19. In a BPMN collaboration model of the purchase process, which of the following best describes the purpose
of swimlanes?
A. Capturing the process complexity
B. Clarifying the interaction between pools
C. Showing the sequence of activities in a pool
D. Showing different jobs in the purchase process
AICPA: Analytic
Blooms: Understand
Source: Original
20. In a BPMN activity diagram, which of the following represent a valid use for an intermediate timer event?
A. Represent a time delay
B. Indicates a delay to a specific date/time
C. Indicates a delay to a relative date, such as next Thursday
D. All of these choices are correct
AICPA: Analytic
Blooms: Understand
Source: Original
21. Which of the following least reflects the purpose of a business rule in the purchase process?
A. Ensure suppliers are paid on time
B. Require segregation of order, receiving, and payment duties
C. Ensure suppliers are satisfied
D. Ensure an audit trail
AICPA: Analytic
Blooms: Understand
Learning Objective: 06-04 Develop business rules to implement controls for the purchase and payment process
Source: Original
Topic: Implementing Controls for Purchases and Payments with Business Rules
22. Review the following diagram. Which answer provides the best interpretation of the multiplicities for the
association between the Purchases and Cash Disbursements classes?
A. Each supplier must be paid for the purchases from that supplier
B. Disbursements are made after the purchases are recorded
C. One purchase can result in multiple payments to the supplier
D. Each check written to the supplier is for one specific purchase
AICPA: Analytic
Blooms: Understand
Source: Original
Topic: Purchase and Payment Structure Models using UML Diagrams
association between the Purchases and Products classes?
A. Each purchase order specifies many products

B. Each purchase is for one product
C. Each purchase can include many products
D. Checks are written after products are added to inventory
AICPA: Analytic
Blooms: Understand
Source: Original
association between the Sunset Partners and Supplier Categories classes?
A. Each partner can be assigned to manage many supplier categories

B. Each partner can only purchase products from one supplier category
C. Each supplier category is managed by several partners
D. Each supplier is linked to one partner
AICPA: Analytic
Blooms: Understand
Source: Original
association between the Product Categories and Supplier Categories classes?
A. Each partner can only purchase products from one supplier category and for one product category.
B. Every supplier and product category can be managed by several partners, but no partner manages both.
C. Some partners may manage several product categories, and some partners may manage several
supplier categories, but there is no direct link between supplier and product categories.
D. Supplier and product category information can be used to calculate year-to-date sales for each
product/supplier category combination.
AICPA: Analytic
Blooms: Understand
Source: Original
26. Which of the following activities is not associated with the purchase and payments business process?
A. Recording payments to vendors
B. Maintaining customer records
C. Buying products and services
D. Receiving goods
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 06-01 Describe the business activities that comprise the purchase and payment process.
Source: Original
Topic: Purchases and Payments Process
27. The purchase is generally recorded when which of the following activities takes place?
A. Place purchase order.
B. Request prices and availability.
C. Send payment.
D. Receive items.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 06-02 Develop an activity model of the purchase and payment process using BPMN.
Source: Original
28. A BPMN activity diagram that contains two blank pools would typically be created in order to highlight
which of the following?
A. The orchestration of the business process.
B. The activities in the business process.
C. The choreography of the business process.
D. The decisions made in the business process.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 06-03 Understand and apply different activity modeling options.
Source: Original
29. When documenting a purchases and payments business process, which of the following BPMN activity
diagram symbols should be used to indicate that accounts payable waits until the end of the month to
pay vendors?
A. Intermediate timer event.
B. Collapsed subprocess.
C. Delay mode gateway.
D. Pause activity.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 06-03 Understand and apply different activity modeling options.
Source: Original
30. Which of the following is not a primary objective when placing a purchase order?
A. Use a reliable supplier.
B. Create a purchase order number.
C. Obtain the best available price.
D. Meet the required delivery time.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 06-04 Develop business rules to implement controls for the purchases and payments process.
Source: Original
31. Which of the following is not a desired access control when developing a purchases and payments
business process?
A. The person placing the purchase order must not receive the items.
B. The person returning items to the supplier must not view the original purchase order.
C. The person receiving the order must not see the original purchase order quantities.
D. The person paying the supplier must not be able to modify the purchase order.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
32. Which of the following is an example of an application control for the purchases and payments business
process?
A. Management approval is required for large purchases.
B. The employee who receives supplier goods must not be the same employee who ordered the goods.
C. Defective items should be returned to suppliers promptly.
D. The purchase order number is automatically assigned.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
33. In the following diagram, which of the following provides the best interpretation of the multiplicities
for the association between the employees and purchases classes?
0..* 1..1
Products Purchases Employees

1..* 0..* 0..* 1..1
1..*
1..1
0..*
Cash
Cash Suppliers
Disbursements
1..1 0..* 0..* 1..1
0..*
A. A single purchase can be made by a combination of several employees.

B. An employee can make a maximum of one purchase.
C. Each purchase must be made by one employee.
D. Each product should be received by an employee.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 06-05 Develop structure models for the purchases and payments process using UML class diagrams.
Source: Original
for the association between the cash disbursements and employees classes?
0..* 1..1

1..* 0..* 0..* 1..1
1..*
1..1
0..*
Cash
Cash Suppliers
Disbursements
1..1 0..* 0..* 1..1
0..*
A. A cash disbursement must be made by the employee who made the purchase.
B. A cash disbursement can be made by a combination of several employees.
C. An employee can make a maximum of one cash disbursement.
D. Each cash disbursement must be made by one employee.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
for the association between the employees and product categories classes?
Product
Categories
0..*
1..1 0..* 1..1

0..*
1..1
1..* 0..* 0..* 1..1
1..* 1..1
1..1
0..*
Cash
Cash Suppliers
Disbursements
1..1 0..* 0..* 1..1
0..*
0..*
0..*
Supplier
Categories
1..1
A. Each product category may be managed by several employees.

B. Each employee is only authorized to purchase products from a single category.
C. Each employee may be assigned to manage many product categories.
D. Each product category includes many products.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
36. Which of the following best describes a type image?

A. A description attached to a UML association when there are multiple associations between classes.
B. A UML class added to collect management information, such as category.
C. A BPMN activity that allows a business process to branch based on type.
D. A description attached to a BPMN gateway that clarifies the nature of the gateway.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
37. Which of the following would likely be a foreign key in a purchases table?
A. Purchase_Order_Date.
B. Purchase_Order_Number.
C. Supplier_Number.
D. Product_Description.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 06-06 Implement a relational database from the UML class diagram of the purchases and payments process.
Source: Original
38. Which of the following would likely be a primary key in a purchases table?
A. Purchase_Order_Date.
B. Purchase_Order_Number.
C. Supplier_Number.
D. Product_Description.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
39. Which of the following tables would likely be the result of a many-to-many relationship in a purchases
and payments class diagram?
A. PurchaseItems.
B. PurchaseOrderNumber.
C. ProductCategory.
D. EmployeeSupplier.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
40. The following diagram would result in a database with how many tables?
Product
Categories
0..*
1..1 0..* 1..1

0..*
1..1
1..* 0..* 0..* 1..1
1..* 1..1
1..1
0..*
Cash
Cash Suppliers
Disbursements
1..1 0..* 0..* 1..1
0..*
0..*
0..*
Supplier
Categories
1..1
A. 6.
B. 8.
C. 10.
D. 12.
AICPA: Analytic
Blooms: Remember
Difficulty: 1 Easy
Source: Original
Essay Questions with Answers

41. La Jolla Management Company (LJMC) manages several apartment complexes and earns revenues by
renting out the apartments in those complexes. LJMC assigns an agent/manager (employee) to each
complex (one manager can manage several complexes) to handle day-to-day operations, such as
maintaining the property, advertising, and signing rental contracts. This case describes the purchase of
maintenance service process.
Complexes and apartments. LJMC has acquired fifteen and built several more new apartment complexes over the
last two years. It identifies complexes by unique name and apartments by the combination of the complex name
and apartment#. LJMC categorizes each apartment according to the number of bedrooms and bathrooms, as well
as other factors. There are more than 20 apartment categories at present, each identified by unique category #.
Since each complex presents a unique set of luxury appointments and amenities, LJMC determines the standard
monthly rental fee by considering both the apartment category and complex, for example 2 bedroom 1 bath
apartments (category 21) rent for $1850 per month in the El Dorado Arms complex (where there is no view and
the complex is close to a freeway) but the same category apartments rent for $2850 per month in the La Jolla Cove
complex (where there is a view of the ocean from most apartments in the complex).
Maintenance Jobs. LJMC keeps its apartments and complexes in top condition. The LJMC complex managers
monitor the condition of the facilities. Whenever the condition falls below LJMC standards, the managers hire
contractors to bring the apartment back up to specification. LJMC classifies each maintenance job by job type, and
the managers match the job type to the contractor type that can best perform the job. The LJMC manager then
selects one specific contractor for the job from that contractor type. Each contractor may belong to several
contractor types. Each maintenance job involves either one apartment or the common areas of the complex. LJMC
tracks the maintenance performed on apartments and complex common areas. LJMC pays its contractors in full at
the end of the month for all jobs that the contractor performed during the month.
Other Information. Agents, resources, and type images may be recorded in the database before they are linked to
other classes. LJMC tracks all its employees in one employee class.
REQUIRED: 1) use the information above and the list of attributes below to draw a UML class diagram showing the
classes, associations, and multiplicities, 2) prepare a listing of the tables necessary to support La Jolla Management
Company’s process using all the attributes. Name each table and clearly identify primary keys with PK and foreign
keys with FK. List your tables in the following order: RESOURCES, EVENTS, AGENTS, TYPE IMAGES, and LINKING.
Use only the following list of attributes (remember that there should be no classes without attributes).
Attributes
actual completion date of job count of rooms in apartment
actual cost of this job count of this type of contractor
actual monthly rent date complex was constructed
apartment # date job ordered
apartment category # employee #
apartment complex address employee hire date
apartment complex name employee name
apartment square footage job type
bank account balance maintenance job #
bank account# number of available apartments in this category
check # number of bathrooms for apartments in this
check amount category
check date number of bedrooms for apartments in this category
contractor # projected completion date of job
contractor name standard cost for this job type
contractor phone number total complex square footage
contractor quality rating YTD $ spent on this job type
contractor type YTD $ spent on this job type in this complex
Solution
Diagram:
Table listing:
Resources
Apartment Complex = apartment complex name (PK), address, date constructed, total square footage,
employee # (manager)
Apartments = complex name + apartment # (PK), apartment square footage, count of rooms in apartment,
apartment category (FK)
Cash = bank account # (PK), bank account balance
Events
Maintenance Job = maintenance job # (PK), projected completion date of job, actual completion date of job,
actual cost of this job, job type (FK), employee # (FK), contractor # (FK) , complex name (FK), apartment # (FK),
check # (FK)
Cash disbursement = check # (PK), check date, check amount, bank account # (FK), employee # (FK), contractor
# (FK)
Agents
Contractor = contractor # (PK), contractor name, contractor quality rating, phone
Employee = employee # (PK), employee name, employee hire date
Type Images
Job Type = job type (PK), standard cost for this job type, YTD $ spent on this job type
Contractor Type = contractor type (PK), count of this type of contractor
Apartment Category = apartment category# (PK), number of bedrooms for apartments in this category, number
of bathrooms for apartments in this category, count of available apartments in this category
Linking Tables
Job Type – Contractor Type = job type + contractor type (PK)
Contractor Type – Contractor = contractor type + contractor # (PK)
Apartment Category – Complex = apartment category # + apartment complex name (PK)
Job Type – Complex = apartment complex name + job type (PK), YTD $ spent on this job type in this complex
AICPA: Analytic
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Blooms: Apply
Difficulty: 3 Hard
Source: Original
42. Pacific Green Company (PGC) provides landscaping services to individual and corporate customers in
southern California. Heather F originally founded PGC as a lawn mowing service while she attended graduate
school. It became so successful that she delayed her teaching career to concentrate on building the company.
This case describes PGC’s processes for leasing trucks, maintaining trucks, and purchasing plants.
Inventories. PGC maintains an inventory of trucks of all sizes to support various landscaping requirements (the
acquisition of trucks are outside the scope of this case). PGC tracks the trucks by vehicle identification numbers
(VINs) and keeps meticulous records on each truck. For example, they track the mileage for each truck on each
landscaping job. Additionally, they track the maintenance history for each truck. Each type of truck has a
different use and hauling capacity, but each truck in a particular truck type has the same use and hauling
capacity.
PGC also maintains an extensive inventory of plants, ranging from colorful flowers to large trees, so they can
address almost any landscaping requirement on short notice. Since the common name of many plants vary by
region, PGC tracks its plant inventory by scientific names (i.e., the Latin names). To manage the plant inventory
and ensure that the best plants are applied to job conditions, Heather categorizes all plants by plant type.
Truck Leases. PGC leases all its trucks from local dealers. PGC purchasing agents negotiate the leases. Each
lease involves only one truck due to the state registration requirements. The dealers require a down payment
at the time a lease is signed, and then PGC makes payments monthly over the life of the lease. Although PGC
usually turns in the trucks at the end of the lease, occasionally, PGC will sign a new lease for an existing truck
when that truck provides unusual capability or has relatively low mileage.
Truck Maintenance. PGC contracts for truck maintenance with local truck repair shops. A purchasing agent will
negotiate a truck maintenance contract for each type of truck with a truck repair shop that specializes in those
types of trucks. Then, PGC takes its trucks to the contracted shops when maintenance is required. A PGC
purchasing agent approves each maintenance invoice after carefully checking it against the contract terms and
assigns a purchase number to track the purchase of maintenance. A PGC cashier pays the truck maintenance
vendors monthly for all the maintenance invoices received during the month.
Plant purchases. PGC buys its plants in bulk to keep its plant inventory well stocked. Because PGC has an
excellent relationship with its plant vendors, it places informal orders by phone. When the plants are delivered
and accepted, PGC assigns a purchase number to each receipt. PGC cashiers pay for plant purchases within 30
days of the delivery. PGC cashiers occasionally combine payments if there are multiple deliveries from the same
vendor within a short period of time.
Employees. PGC keeps all employee information together (your model should show one Employee class). They
track each employee’s qualifications according to category: purchasing agent, cashier, landscaping laborer,
truck driver, supervisor, etc. An employee is considered qualified when he or she reaches the number of
training hours required for that category. However, each employee can hold qualifications for several
categories, for example an employee qualified as a purchasing agent could also be qualified as a truck driver.
Vendors. PGC keeps all vendor information together (your model should show one Vendor class). However,
they classify the vendors by type: truck dealer, truck repair shop, plant vendor, etc.
Miscellaneous. You may assume that all agent, resource, and type image information is entered into the
database before any process activity takes place.
REQUIRED: 1) use the information above and the list of attributes below to draw a UML class diagram showing
the classes, associations, and multiplicities, 2) prepare a listing of the tables necessary to support PGC’s
processes using all the attributes. Name each table and clearly identify primary keys with PK and foreign keys
with FK. List your tables in the following order: RESOURCES, EVENTS, AGENTS, TYPE IMAGES, and LINKING. Use
only the following list of attributes (remember that there should be no classes without attributes).
Attributes:
Average price of plants in this category Truck type hauling capacity
Average daily charge to use a truck of this type Truck type use
Cash account # Truck VIN
Cash account balance Truck maintenance contract #
Check # Truck maintenance contract start date
Check amount Truck maintenance contract end date
Check date Truck maintenance purchase #
Date this employee qualified for this employee type Truck maintenance vendor's invoice #
Employee # Truck maintenance date
Employee hire date Truck maintenance amount
Employee name Truck lease #
Employee Type Truck lease start date
Expected maximum size of plants in this category Truck lease end date
Light required for plants in this category Truck lease down payment amount
Number of employees qualified for this employee Truck lease monthly payment amount
type Plant purchase #
Number of training hours to qualify for this Plant purchase date
employee type Quantity of this plant received on this purchase
Plant category name Price of this plant received on this purchase
Plant common name Vendor type
Plant scientific name Vendor type description
Quantity on hand of this plant Count of vendors of this type
Truck acquired year Vendor #
Truck make Vendor name
Truck mileage to date Vendor account payable amount
Truck type
Solution
Diagram:
Table listing:
Resources
Cash = cash account # (PK), cash account balance
Trucks = truck VIN (PK), truck make, truck acquired year, truck mileage to date, truck type (FK)
Plants = plant scientific name (PK), plant common name, quantity on hand, plant category name (FK)
Events
Truck maintenance contracts = truck maintenance contract # (PK), truck maintenance contract start date, truck
maintenance contract end date, vendor # (FK), employee # (FK), truck type (FK)
Truck maintenance = truck maintenance purchase # (PK), truck maintenance vendor's invoice #, , maintenance
date, maintenance amount, vendor # (FK), employee # (FK), truck VIN (FK), check # (FK)
Truck leases = truck lease # (PK), truck lease start date, truck lease end date, truck lease down payment
amount, truck lease monthly payment amount, vendor # (FK), employee # (FK), truck VIN (FK)
Plant purchases = plant purchase # (PK), plant purchase date, check # (FK), employee # (FK), vendor # (FK)
Cash disbursements = check # (PK), check date, check amount, cash account # (FK), employee # (FK), vendor #
(FK), truck lease # (FK)
Agents
Employee = employee # (PK), employee name, employee hire date
Vendor = vendor # (PK), vendor name, vendor account payable amount
Type Images
Plant category = plant category name (PK), expected maximum size of plants in this category, light required for
plants in this category, average cost of plants in this category
Truck type = truck type (PK), truck type use, truck type hauling capacity, average daily cost to use trucks of this
type
Employee type = employee type (PK), number of training hours to qualify, number of employees qualified
Vendor type = vendor type (PK), vendor type description, count of vendors of this type
Linking tables
Plant purchases - plants = plant purchase # + plant scientific name (PK), quantity received, price
Employee - employee type = employee # + employee type (PK), date this employee qualified for this type
AICPA: Analytic
Blooms: Apply
Difficulty: 3 Hard
Source: Original
43. Pacific Green Company (PGC) provides landscaping services to individual and corporate customers in
southern California. Heather F originally founded PGC as a lawn mowing service while she attended graduate
school. It became so successful that she delayed her teaching career to concentrate on building the company.
This case describes PGC’s processes for maintaining trucks.
PGC contracts for truck maintenance with local truck repair shops. A purchasing agent will negotiate a truck
maintenance contract for each type of truck with a truck repair shop that specializes in those types of trucks. If
the purchasing agent cannot negotiate satisfactory contract terms, the contracting process terminates. The
process then starts over until contracts are in place.
When trucks are due for maintenance or repair, a PGC truck driver takes its trucks to the contracted shops. A
PGC purchasing agent approves each maintenance invoice after carefully checking it against the contract terms
and to confirm that the required maintenance or repairs are made. If the maintenance complies and the repairs
were satisfactorily performed, PGC assigns a purchase number to track the purchase of maintenance. A PGC
cashier then pays the truck maintenance vendors. If the invoice does not comply with the terms of the
contract, the PGC purchasing agent returns the invoice for correction. If the repairs are not satisfactory, the
purchasing agent takes the truck back so the shop can perform the repairs or maintenance satisfactorily.
REQUIRED: Using the description above, correct the following BPMN activity diagram to accurately depict the
PGC truck contracting and maintenance process.
Solution (it is possible that other solutions may also be correct)
AICPA: Analytic
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 06-02 Develop an activity model of the purchase and payment process using BPMN
Source: Original
44. Integrated Case combining both sales and purchases processes.
Background: When Arnold retired from politics after the state budget crises of 2008, 2009, and 2010 he found
that the downturn in the overall economy had affected his retirement plans. Plus, he needs money for his
divorce from Maria while his new movies are still in production. So, he decided to open a unique health spa
that will cater to movie stars and other wealthy clients. Taking advantage of the historically low mortgage rates,
he acquired an impressive estate in Rancho Palos Verdes overlooking the Pacific Ocean and converted it into an
expensive spa. After some extensive market research and a number of personal visits to other spas (it was a
tough job but someone had to do it), he opened Arnold’s California Spa offering a variety of activities (such as
golf, Pilates, yoga, massage, mud baths, aerobics, weight lifting, dodge ball, etc.) so clients have the option of
either 1) getting physically fit with the latest in exercise technology or 2) just relaxing in luxury. His spa quickly
became extremely successful and he plans to expand to other cities. Arnold realizes that his business needs an
accounting system, and he has asked you to analyze his requirements and help him design a system that can
grow along with his business.
Arnold’s business requirements: During your interview with Arnold, he describes his business requirements for
his purchasing and sales processes as follows:
Spa Packages. We offer our clients a selection of spa packages that changes according to the time of year and
customer demand. For example, we might offer the Spring Getaway Package, the Relaxing Escape from the
Economy Package, the Pure Indulgence Package, the Sports Package, and the Steroid-Free Bodybuilding
Package. Each package includes several activities, such as weight lifting, aerobics, Pilates, mountain biking,
yoga, tennis, golf, various skin care therapies, hydrotherapies, body therapies, and massage.
The price of each spa package depends on the specific activities included in the package. For example, the
Steroid-Free Bodybuilding Package includes weight lifting, yoga, dodge ball, and scientifically designed ice baths
to restore the muscles. Each activity could appear multiple times in each spa package, for example we could
include two rounds of golf in one package. Of course, each activity is included in multiple spa packages.
We set the price of each spa package by first determining what we want to charge for each of the activities
depending on the time of year, the products used in the activity, and expected popularity. We then add up the
charges for each activity to form the overall price for the spa package; however, the clients only see one single
price for the whole package. To monitor profitability, we track year-to-date sales information for each activity
included in any spa package.
Sales process (spa visits): Arnold’s California Spa emphasizes customer service, of course. Each client makes
reservations in advance, and one reservation could schedule several future spa visits (each individual spa visit
involves only one spa package, but the client could select a different spa package for each visit). When the
client arrives for a spa visit, we assign one of our employees to be responsible for the client and direct all the
client’s activities for that visit. This responsibility only applies to the specific visit. Other employees will also be
involved in the spa visit depending upon the activities included in the specific spa package that the client
selected. For example, the visit director may conduct a golf lesson for the client while an assisting employee
may provide a therapeutic massage for the client’s guest (to maintain appropriate discretion, we don’t track
clients’ guests). We expect our employees to provide the highest quality customer service and we plan to hold
them accountable. Since all of our employees will be able to be visit directors, we want to track who directs and
who assists with each specific visit as well as the number of hours they spend with the client.
Since most clients love their experience and want to return, we offer them an opportunity to become members
of Arnold’s Entourage. Entourage members earn membership rewards based on the number of visits and the
amounts spent. Entourage members also get priority reservations and can pay for visits over time with regular
monthly payments, where the number of payments depends on their membership group: bronze, silver, or
gold. Since an Entourage member could visit several times while also making payments for prior visits, each
client payment could apply to several spa visits. Clients that are not Entourage members must pay for each spa
visit in full at the time of the visit. To plan for future marketing, we track year-to-date spending for each
combination of Entourage Group and activity, so we can see which activities appeal to which membership
group.
Product Inventory and purchasing. We maintain an inventory of products—such as sports gear, towels, robes,
shampoos, golf balls, body-wrap material, seaweed, massage oils, bodybuilding supplements, raw fruit juices,
and vitamins— that we use in the spa visits. We record the quantity and cost of each product used in a spa visit
as well as the total costs for each visit to determine profitability. For planning, we also track which products are
used in each activity, although many products are used in multiple activities. We estimate the quantity and cost
of each product used in each activity, which then allows us to estimate the overall cost of each activity, so we
can decide what to charge for the activity when it is offered in any spa package.
We buy our products from a number of vendors. We’ve already worked out agreements for them to deliver
products on a regular basis. We record purchases by purchase number when they deliver the products. All our
vendors require payment in full within 30 days after we receive the products, but depending on timing, we may
issue one check to pay for multiple purchases from a vendor.
Other information. We record information about activities before they are offered in any spa package, and we
add new spa packages before any client purchases them. We have a payroll service that handles all our payroll
needs, so you don’t need to consider payroll in your analysis. We assign each employee an employee number
and a job title, like “master masseuse”, “yoga instructor supervisor”, “hair styling specialist” and “the guy who
will pump you up.” However, every employee can perform several different jobs at the spa, so we keep all the
employee information in one set of records. We only use the title to impress our clients and not for any real
business purpose (we don’t categorize employees by employee types). We record information about all agents,
resources, and type images before they are linked to other classes.
REQUIRED: 1) use the information above and the list of attributes below to draw a UML class diagram showing
the classes, associations, and multiplicities, 2) prepare a listing of the tables necessary to support Arnold’s
California Spa processes using all the attributes. Name each table and clearly identify primary keys with PK and
foreign keys with FK. List your tables in the following order: RESOURCES, EVENTS, AGENTS, TYPE IMAGES, and
LINKING. Use only the following list of attributes (remember that there should be no classes without
attributes).
Attributes
Activity description Client #
Activity name Client contact hours for this employee in this spa
Amount of this cash receipt applied to this spa visit visit
Cash account # Client name
Cash account balance Cost of this product received on this purchase
Cash receipt # Cost of this product used in this spa visit
Cash receipt amount Employee #
Cash receipt date Employee name
Check # Employee title
Check amount Entourage Group
Check date Months to pay for members in this Entourage level
Number of times this client enjoyed this activity
Planned cost of this activity
Price of this activity in this spa package
Product #
Product description
Product standard cost
Purchase #
Purchase date
Quantity of this product planned for use in this
activity
Quantity of this product received on this purchase
Quantity of this product used in this spa visit
Quantity on hand (QOH) of this product
Spa package begin offering date
Spa package end offering date
Spa package name
Spa package price
Spa reservation #
Spa reservation date
Spa visit #
Spa visit date
Total labor hours for this spa visit
Vendor #
Vendor name
Year-to-date (YTD) purchases of this product from
this vendor
Year-to-date (YTD) sales $ for this activity
Year-to-date (YTD) sales $ for this client
Year-to-date (YTD) sales $ for all clients in this
Entourage level
Year-to-date (YTD) sales $ for this activity and
Entourage Group
Solution
Diagram:
Table listing:
Resources
Products = Product # (PK), Product description, standard cost, quantity on hand
Cash = Cash account # (PK), Cash account balance
Events
Purchase = Purchase # (PK), Purchase date, Employee # (FK), Vendor# (FK), Check# (FK)
Cash Receipt = Cash receipt # (PK), Cash receipt amount, Cash receipt date, Cash account# (FK), Employee #
(FK), Client # (FK)
Cash Disbursement = Check # (PK), Check amount, Check date, Employee # (FK), Vendor # (FK), Cash account #
(FK)
Spa Visit = Spa visit # (PK), Spa visit date, Total labor hours for this spa visit, client contact hours for this
employee in this spa visit, Employee # (director) (FK), Client # (FK), Spa Package Name (FK), Spa Reservation#
Spa Reservation = Spa Reservation # (PK), Spa Reservation Date, Client# (FK), Employee# (FK)
Agents
Accounting Information Systems 2nd Edition Richardson Test Bank
Clients = Client # (PK), Client name, Year-to-Date (YTD) Sales $ For This Client, Entourage Group (FK)
Employees = Employee # (PK), Employee name, Employee title
Vendor = Vendor # (PK), Vendor name
Type Images
Activities = Activity name (PK), Activity description, Planned cost of this activity, Year-to-date (YTD) sales $ for
this activity
Spa package = Spa package name (PK), Spa package begin offering date, Spa package end offering date, Spa
package price
Entourage Group = Entourage Group (PK), Months to pay for members in this Entourage level, YTD Sales $ for
clients in this Entourage Group
Linking Tables
Spa Package – Activities = Spa Package Name + Activity Name (PK), Price of this activity in this spa package
Product – Vendor = Product # + Vendor # (PK), YTD purchases for this product with this vendor
Spa Visit – Employee = Spa Visit # + Employee # (PK), client contact hours for this employee in this spa visit
Product – Spa Visit = Product # + Spa Visit # (PK), Cost of this product used in this spa visit, Quantity of this
product used in this spa visit
Purchase – Product = Purchase #, Product #, Quantity of this product received on this purchase, Cost of this
product received on this purchase
Product – Activity = Product # + Activity Name (PK), Quantity of this product planned for use in this activity
Entourage Group – Activity = Entourage Group+ Activity Name (PK), YTD Sales $ for this Entourage Group and
activity
Spa Reservation – Spa Package = Spa Reservation# + Spa Package Name (PK)
Spa Visit – Cash Receipt = Visit# + Cash Receipt # (PK), Amount of this cash receipt applied to this spa visit
AICPA: Analytic
Blooms: Apply
Difficulty: 3 Hard
Source: Original
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True / False Answers

1. The Purchase Orders table would have five foreign keys.

2. The Cash Disbursements table would have three foreign keys.

6. The Purchases table would have four foreign keys.

9. Each Purchase Order would be ultimately linked to one cash disbursement.

Multiple Choice Questions

A. Each purchase order specifies many products

A. Each partner can be assigned to manage many supplier categories

Products Purchases Employees

A. A single purchase can be made by a combination of several employees.

Products Purchases Employees

1..1 0..* 1..1

A. Each product category may be managed by several employees.

36. Which of the following best describes a type image?

1..1 0..* 1..1

Essay Questions with Answers

44. Integrated Case combining both sales and purchases processes.

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