Question

Categorize each of the following activities into the expenditure, conversion, or revenue cycles, and identify the applicable subsystem.

a. preparing the weekly payroll for manufacturing personnel 

b. releasing raw materials for use in the manufacturing cycle

c. recording the receipt of payment for goods sold

d. recording the order placed by a customer

e. ordering raw materials

f. determining the amount of raw materials to order 

Answer 1

Here's the categorization for each activity into the expenditure, conversion, or revenue cycles, along with the applicable subsystem:

a. Preparing the weekly payroll for manufacturing personnel:

Cycle: Expenditure Cycle

Subsystem: Payroll System

 

b. Releasing raw materials for use in the manufacturing cycle:

Cycle: Conversion Cycle

Subsystem: Production Subsystem

 

c. Recording the receipt of payment for goods sold:

Cycle: Revenue Cycle

Subsystem: Sales and Cash Receipts Subsystem

 

d. Recording the order placed by a customer:

Cycle: Revenue Cycle

Subsystem: Order Entry and Fulfillment Subsystem

 

e. Ordering raw materials:

Cycle: Expenditure Cycle

Subsystem: Purchasing System

 

f. Determining the amount of raw materials to order:

Cycle: Expenditure Cycle

Subsystem: Materials Management System