Networks Computer System with Manual Procedures

Premier Sports Memorabilia

Group 2
Purchase System Procedures
Premier’s purchase transactions are initiated when its inventory
levels for a certain item falls below the designated reorder
point.This is electronically monitored through Premier's inventory
requisition system that is directly linked to the inventory file. Once
an item falls below the reorder point, an open requisition record is
automatically created. A valid vendor file is used both to retrieve
stored vendor information and to check that items are being
ordered through a preapproved vendor with which the company
has done business in the past. Digital purchase requisitions are
made available to the clerks in the inventory control department
and the purchasing department via computer terminal.
When the purchasing department clerk views the digital
requisition, she prepares and prints five hard copies of the
purchase order. One copy is filed in the department. A second
copy is sent to the receiving department. A third copy is sent to
the accounts payable department. A fourth copy is sent to the
Inventory control department. A final copy is sent to the vendor as
placement of the order.

Upon receiving the purchase order, the inventory control clerk

uses a terminal to access the open requisition file and closes the
record. In addition, the program automatically creates a digital
pending open purchase record.
Shortly after receiving the purchase order, the vendor will send
out both the goods and a packing slip to Premier’s receiving
department. After the receiving clerk has both the purchase order
and the packing slip, he physically inspects the condition of the
goods and checks that both the type and quantity received are
correct. Upon completion of the inspection, the clerk manually
creates three hard copies of a receiving report. One copy is filed
in the department. The second copy is sent to accounts payable
for reconciliation. The third copy is sent to the Inventory control
department.
When the inventory control department obtains the receiving
report, the clerk uses the purchase update program to access the
pending open purchase record and closes it out. In addition, the
clerk updates the inventory file by posting the amounts received
to the various inventory records affected.

When the accounts payable department clerk receives the

invoice from the supplier, he matches it to the supporting
purchase order and receiving report received from the
purchasing and receiving departments, respectively. The clerk
manually reconciles all three documents and prepares an
accounts payable record from the department terminal.
Finally, at the end of each day, the inventory control
department and the accounts payable department
create a hard-copy inventory summary and accounts
payable journal voucher, respectively. These
documents are sent to the general ledger department,
where they are reconciled and posted to their specific
control accounts within the general ledger file.
Table of Entities and Activities
Entities Para Activities
Computer 1 1. Open requisition record is
created automatically.

2. A valid vendor file is used

to retrieve stored vendor
information and to check
that items are being
ordered through a
preapproved vendor.

3. Digital purchase
requisitions are made
available to inventory
control department clerk
and purchasing
department clerk via
computer terminal.
 Entities
Purchasing Department (clerk)
Para Activities
2 4. Prepares and prints five
hard copies of the
purchase order.
5. One copy is filed in the
department.
6. A second copy is sent to
the receiving department.
7. A third copy is sent to the
accounts payable
department.
8. A fourth copy is sent to the
inventory control
department.
9. A final copy is sent to the
vendor as placement of
the order.
 Entities
Inventory Control Department (clerk)
Para Activities
3 10. Uses a terminal to access the open
requisition file and closes the
record.
11. The program automatically creates
a digital pending open purchase
record.

Vendor 4 12. The vendor will send out both the

goods and a packing slip to
Premier’s receiving department.

Receiving Department (clerk) 4 13. Physically inspects the condition of

the goods and checks that both the
type and quantity received are
correct.
14. Manually creates three hard copies
of a receiving report.
15. One copy is filed in the department.
16. The second copy is sent to
accounts payable for reconciliation.
 Entities Para Activities
Inventory Control Department 5 17. Uses the purchase update
(clerk) program to access the pending
open purchase record and
closes it out.
18. Updates the inventory file by
posting the amounts received
to the various inventory
records affected.

Accounts Payable Department 6 19. Receives the invoice from the

(clerk) supplier, matches it to the
supporting purchase order and
receiving report received.
20. Reconciles all three
documents and prepares an
accounts payable record from
the department terminal.
 Entities Para Activities

Accounts Payable Department 7 20. Creates a hard-copy inventory

(cleark) & Inventory Control summary and accounts
Department (clerk) payable journal voucher,
respectively.
21. The documents are sent to
the general ledger
department.

General Ledger Department 7 22. The documents received are

(clerk) reconciled and posted to their
specific control accounts
within the general ledger file.
Flowchart
Summary
Premiere's inventory requisition system monitors the inventory levels of certain items. it creates
an open requisition form once an item falls below the reorder point. to check that items are
being ordered through a preapprove vendor, a valid vendor file is used to retrieve stored vendor
information. Then, purchase requistions are made available to inventory control department and
purchasing department clerks via computer terminal. Once the purchasing department clerk
views the digital requisition, she prepares five copies, one is filed in the department while the
other four are sent to the receiving department, accounts payable department, inventory control
department and the final copy is sent to the vendor as placement of the order.
Upon receiving the purchase order, the inventory control clerk uses a terminal to access the
open requisition file and closes the record. In addition, the program automatically creates a
digital pending open purchase record.
After receiving the purchase order, the vendor then send the goods together with the packing
slip to Premiere's receiving department. The receiving department then physically inspects the
condition of the goods and checks that both the type and quantity received are correct. After
inspection, the clerk manually creates a hard copy of the receiving report.
One copy of the receiving report is filed in the department. The second copy is sent to accounts payable
for reconciliation. The third copy is set to the Inventory control department.
When the inventory control department obtains the receiving report the clerk uses the purchase update
program to access the pending open purchase record and closes it out. In addition, the clerk posts the
amounts received to the various records affected.
When the accounts payable department clerk receives the invoice from the supplier, he matches it to the
supporting purchase order and receiving report received from the purchasing and receiving departments,
respectively. The clerk manually reconciles all three documents and prepares an accounts payable record
from the department terminal.
Finally, at the end of each day, the inventory control department and the accounts payable department
create a hard-copy inventory summary and accounts payable journal voucher, respectively, reflecting the
effects of all of the day’s transactions. These documents are sent to the general ledger department, where
they are reconciled and posted to their specific control accounts within the general ledger file.