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College of Administrative and Financial Sciences
Course Name: Introduction to
Accounting Information Systems
Course Code: ACCT 402
Student’s ID Number:
Academic Year: 1440/1441 H
For Instructor’s Use only
Students’ Grade: Marks
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students
or other resources without proper referencing will result in ZERO marks. No
• All answered must be typed using Times New Roman (size 12, double-spaced)
font. No pictures containing text will be accepted and will be considered
• Submissions without this cover page will NOT be accepted.
• The Answer should be within 1300-1500 words in length
Khan Corporation is a midsize, privately owned, industrial instrument manufacturer supplying
precision equipment to manufacturers in the Midwest. The corporation is 10 years old
and uses an integrated ERP system. The administrative offices are located in a downtown
building and the production, shipping, and receiving departments are housed in a
renovated warehouse a few blocks away.
Customers place orders on the company’s website, by fax, or by telephone. All sales are
on credit, FOB destination. During the past year sales have increased dramatically, but
15% of credit sales have had to written off as uncollectible, including several large online
orders to first-time customers who denied ordering or receiving the merchandise.
Customer orders are picked and sent to the warehouse, where they are placed near the
loading dock in alphabetical sequence by customer name. The loading dock is used both
for outgoing shipments to customers and to receive incoming deliveries. There are ten to
twenty incoming deliveries every day, from a variety of sources.
The increased volume of sales has resulted in a number of errors in which customers
were sent the wrong items. There have also been some delays in shipping because items
that supposedly were in stock could not be found in the warehouse. Although a perpetual
inventory is maintained, there has not been a physical count of inventory for two years.
When an item is missing, the warehouse staff writes the information down in log book.
Once a week, the warehouse staff uses the log book to update the inventory records.
The system is configured to prepare the sales invoice only after shipping employees enter
the actual quantities sent to a customer, thereby ensuring that customers are billed only
for items actually sent and not for anything on back order.
a. Identify at least three weaknesses in Khan Corporation’s revenue cycle activities.
b. Describe the problem resulting from each weakness. [2 point]
c. Recommend control procedures that should be added to the system to correct the
What are the advantages of the REA data model over the traditional AIS model?
Identify and discuss two methods of production planning.
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