Accounting Information Systems
Accounting Information Systems
11th Edition
ISBN: 9780357156032
Author: Ulric J. Gelinas; Richard B. Dull; Patrick Wheeler
Publisher: Cengage Limited
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Chapter 6, Problem 5SP

Examine Figure 6.18, which contains the REA model for Hera Industrial Supply (HIS). The model is partially completed; it includes all entities and relationships, but it does not include cardinalities or descriptions of the relationships (which would appear in diamonds on the connecting lines between entities). HIS sells replacement parts for packaging machinery to companies in several states. HIS accepts orders via telephone, fax, and mail. When an order arrives, one of the salespersons enters it as a sales order. The sales order includes the customer’s name and a list of the inventory items that the customer wants to purchase. This inventory list includes the quantity of each inventory item and the price at which HIS is currently selling the item. When the order is ready to ship, WIS completes an invoice and records the sale. Sometimes, inventory items that a customer has ordered are not in stock. In those cases, HIS will ship partial orders. Customers are expected to pay their invoices within 30 days. Most customers do pay on time; however, some customers make partial payments over two or more months. List each entity in the REA model, and identify it as a resource, event, or agent. Using Microsoft Visio, redraw the REA model to include the diamonds for each relationship and include an appropriate description in each diamond.

FIGURE 6.18 Partially Completed REA Model of the Hera Industrial Supply Sales Business

Chapter 6, Problem 5SP, Examine Figure 6.18, which contains the REA model for Hera Industrial Supply (HIS). The model is

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Precision Industries, Inc., is a manufacturer of electronic components. When a purchase order is received from a customer, a sales clerk prepares a serially numbered sales order and sends copies to the shipping and accounting departments. When the merchandise is shipped to the customer, the shipping department prepares a serially numbered shipping advice and sends a copy to the accounting department. Upon receipt of the appropriate documents, the accounting department records the sale in the accounting records. All shipments are FOB shipping point.   Assume that all shipments for the first five days of the following year were recorded as occurring in the current year. If not corrected, what effect will this cutoff error have upon the financial statements for the current year?
Based on the following small extract from Polis Grocers Inc, fill in the missing activities in the table of entities and activities presented below.
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