Q: Classify each of the following items as belonging in the revenue, expenditure, human resources/payroll, production, or financing cycle.

  1. Purchase raw materials – Expenditure cycle
  2. Payoff mortgage on factory – Financing cycle
  3. Hire a new assistant controller – Human resources/payroll cycle
  4. Establish a $10,000 credit limit for customer XYZ company – Revenue cycle
  5. Pay for raw materials – Expenditure cycle
  6. Disburse payroll checks to factory workers - Human resources/payroll cycle
  7. Record goods received from vendor – Expenditure cycle
  8. Update the allowance for uncollectible accounts – Revenue cycle
  9. Decide how many units to make next month – Production cycle
  10. Complete picking ticket for goods ordered by a customer – Revenue cycle
  11. Record factory employee timecards - Human resources/payroll cycle
  12. Sell concert tickets – Revenue cycle
  13. Draw on line-of-credit – Financing cycle
  14. Send new employees to a business ethics course - Human resources/payroll cycle
  15. Pay utility bills – Expenditure cycle
  16. Pay property taxes on office building – Expenditure cycle
  17. Pay federal payroll taxes - Human resources/payroll cycle
  18. Sell DVD player – Revenue cycle
  19. Collect payment on customer accounts – Revenue cycle
  20. Obtain a bank loan – Financing cycle
  21. Pay sales commissions - Human resources/payroll cycle
  22. Send an order to a vendor – Expenditure cycle
  23. Put purchased goods into the warehouse – Expenditure cycle

Q: Identify whether the following transactions belong in a master file or a transaction file.

  1. Update customer address change – Master file
  2. Update unit pricing information – Master file
  3. Record daily sales – Transaction file
  4. Record payroll checks – Transaction file
  5. Change employee pay rates – Master file
  6. Record production run variances – Transaction file
  7. Record Sales Commissions – Transaction file
  8. Change employee office location – Master file
  9. Update accounts payable balance – Master file
  10. Update the accounts receivable balance – Master file
  11. Change vendor payment discount terms – Master file
  12. Record purchases – Transaction file