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Answer: Expenditure Cycle - Payroll Subsystem

The document categorizes business activities into expenditure, conversion, and revenue cycles and their applicable subsystems. It then shows how these cycles apply to different businesses like a dental clinic, bakery, and convenience store. The expenditure cycle includes purchasing, accounts payable, payroll, cash disbursement, and fixed assets subsystems. The conversion cycle includes production planning and control and cost accounting. The revenue cycle includes sales order processing and cash receipts.

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Angeilyn Segador Roda - Tambuli
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1K views4 pages

Answer: Expenditure Cycle - Payroll Subsystem

The document categorizes business activities into expenditure, conversion, and revenue cycles and their applicable subsystems. It then shows how these cycles apply to different businesses like a dental clinic, bakery, and convenience store. The expenditure cycle includes purchasing, accounts payable, payroll, cash disbursement, and fixed assets subsystems. The conversion cycle includes production planning and control and cost accounting. The revenue cycle includes sales order processing and cash receipts.

Uploaded by

Angeilyn Segador Roda - Tambuli
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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I.

Transaction Cycle Identification


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.


Answer: Expenditure cycle – Payroll Subsystem

b. Releasing raw materials for use in manufacturing activities.


Answer: Conversion cycle – Production System Subsystem

c. Recording the receipt of payments for goods sold.


Answer: Revenue cycle – Cash Receipts Subsystem

d. Ordering raw materials.


Answer: Expenditure cycle – Purchases System Subsystem

II. The expenditure, conversion and revenue cycles exist in all types of businesses. Show
the relationship of these cycles in the following businesses  (similar to Figure 2-1) Identify
the subsystems under each cycle.

A. Cruz Dental clinic

 
 
Expenditure Cycle  
Subsystems: 
 
Purchasing/Accounts Payable        
Payroll
Fixed Assets
 
Conversion Cycle
Subsystems:
 
 
Production Planning and Control
Cost Accounting
 
Revenue Cycle
Subsystems:
 
Sales Order Processing
Cash Receipts
 
b. Fel  Bakery

Labor
Customer
s
Materials
Cash
Fel Bakery

Finished Goods

Cash
Expenditure Cycle Conversion Cycle
Revenue Cycle
Subsystems Subsystems
Subsystems
Purchasing/Accounts Payable Production Planning and Control
Cash Disbursement Cost Accounting Sales Order Processing
Payroll Cash Receipts
Fixed Assets

Finished Goods

Cash
Expenditure Cycle  
Subsystems: 
 
Purchasing/Accounts Payable 
Cash Disbursements       
Payroll
Fixed Assets
 
Conversion Cycle
Subsystems:
 
Production Planning and Control
Cost Accounting
 
 
Revenue Cycle
Subsystems:
 
Sales Order Processing
Cash Receipts
 
c. 7 Eleven Convenience Store

Labor
Customers

Materials
Cash
Seven Eleven
Store
Finished Goods

Cash

Expenditure Cycle Conversion Cycle Revenue Cycle


Subsystems Subsystems
Subsystems
Purchasing/Accounts Payable Production Planning and Control
Cash Disbursement Cost Accounting Sales Order Processing
Payroll Cash Receipts
Fixed Assets

Finished Goods

Cash
Expenditure Cycle  
Subsystems: 
 
Purchasing/Accounts Payable 
Cash Disbursements       
Payroll
Fixed Assets
 
Conversion Cycle
Subsystems:
 
Production Planning and Control
Cost Accounting
 
Revenue Cycle
Subsystems:
 
Sales Order Processing
Cash Receipts

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