Core Concepts of Accounting Information Systems 12th Edition by Carolyn Strand Norman, Mark Simkin

Exercise 27

Amanda M is a regional manufacturer and wholesaler of high-quality chocolate candies. The company's sales and collection process is as follows. Amanda M makes use of an enterprise-wide information system with electronic data interchange (EDI) capability. No paper documents are exchanged in the sales and collection process. The company receives sales orders from customers electronically. On receipt of a sales order, shipping department personnel prepare goods for shipment and input shipping data into the information system. The system sends an electronic shipping notice and invoice to the customer at the time of shipment. Terms are net 30. When payment is due, the customer makes an electronic funds transfer for the amount owed. The customer's information system sends remittance (payment) data to Amanda M. Amanda M's information system updates accounts receivable information at that time. Draw a context diagram and a level 0 logical data flow diagram for Amanda M's sales and collection process.