ACCT 4240A Chapter 6 Purchases and Payments Business Process

In a more complex BPMN activity diagram, such as shown in Figure 6.4 describing Sunset Graphic's purchase and payment process, the 30 day delay between the receipt and acceptance of new inventory items and the payment to the supplier is shown as an ____ timer event.

intermediate

In the generic REA model of the purchase and payment process, the multiplicities on the association between Suppliers and Purchases indicates that each supplier can participate in a minimum of zero purchases and a maximum of ____ purchases.

many

If Sunset Graphics sometimes paid for purchases over time rather than in full within 30 days after receipt, the maximum multiplicity next to the Cash Disbursement event would change from 1 to ____.

many / *

In Figure 6.4 (a BPMN activity model with pools and swimlanes showing Sunset Graphics purchase and payment process), the payment to the supplier is shown as a ____ flow

message

In a BPMN collaboration model, ____ flows show the interaction between two pools.

message

To define business rules, we first need to identify important business events and then define the organization's ____ for those events.

objective, intention, objectives, or intentions

In the BPMN activity diagram of the purchase and payments process with pools and swimlanes (e.g., Figure 6.4), the "Pay Supplier" activity is shown in the accounts ____ swimlane.

payable

The accounting transaction that records the purchase of inventory involves a debit to inventory and a credit to accounts ____.

payable

In the generic REA model of the purchase and payment process, the cash disbursement event records information about ____ to suppliers from on the company's bank accounts.

payment / payments

Business activities related to buying inventory from suppliers and making payments to suppliers is called the purchases and ____ process.

payments

The "employees" class records information about all employees include those that handle ____ transactions.

purchase / purchasing

The UML class diagram for the purchase and payment process involves the same ____ as the sales and collection UML class diagram.

resource / resources

All of the following are valid purposes of intermediate timer events in BPMN except: -show delay of a number of minutes -show delay to a specific date -show delay of a number of days -show an optional delay

show an optional delay

The cash disbursements table always contains at least ___ foreign keys.

three / 3

In the generic REA model of the purchase and payment process, the "Purchases" event records information about individual purchase ____.

transaction / transactions

Since Sunset Graphics categorizes their suppliers, the UML class model of Sunset's purchase and payment process would include a ____ image for Supplier Categories.

type

In an REA model of the purchase and payment process, if each purchase involved only one high value item, such as a new automobile, the maximum multiplicity next to the Inventory resource would be ____, and the maximum multiplicity next to the Purchases event would also be ____.

1: 1 2: 1

Match the functional area, e.g., the swimlane, with the purchases and payments process activity normally performed by that functional area. Buying Receiving Accounts Payable Assess Items Pay Supplier Place Order

Buying <-> Place Order Receiving <-> Assess Items Accounts Payable <-> Pay Supplier

True or false: The overall goal for the purchases and payments process is to pay bills on time.

False. Reason: Primary goal is to purchase needed items from reliable suppliers.

True or false: Gateways in BPMN always show branching into two exclusive paths.

False. Reason: Gateways can show more than 2 paths and the paths do not always have to be exclusive.

True or false: In the UML class diagram of Sunset Graphics purchase and payments process shown in Figure 6.6, the Purchase Orders event represents a commitment, which means that Sunset Graphics would increase its inventory value when a purchase order is issued to a supplier.

False. Reason: No increase to inventory until the items are received and accepted.

Which of the following is not a basic element of the purchases and payments process? -Receiving inventory -Paying employees -Paying suppliers -Ordering inventory

Paying employees

In a BPMN activity diagram of the purchase and payments process, which of the following best indicates why Place Order is modeled as a subprocess, but Receive Items, Assess Items, etc., are modeled as activities? -Place Order is more complex -Receive Items is more complex -Place Order occurs first -Place Order is performed by the buying function

Place Order is more complex

A generic REA model of the purchase and payment process would show two economic events: the ____ event and the "Cash Disbursement" event and the duality association between them.

Purchase / Purchases / Purchasing

Which of the following are business objectives for the purchases and payments process? -Purchase needed inventory. -Use reliable suppliers. -Segregate defective items. -Pay suppliers on time.

Purchase needed inventory. Use reliable suppliers. Pay suppliers on time.

Which of the following represents a deduction from accounts payable recorded at the time of payment? -Purchases -Allowance for bad debts -Sales discounts -Purchases discounts

Purchases discounts

Select the BPMN activity in the purchases and payment process that typically results in recording a purchase in the accounting records. -Send payment -Place order -Receive items -Request prices

Receive items Reason: Purchases are recorded typically when the items are received, not when the payment is sent.

Which of the following best describes the purpose of the cash disbursement event in the generic REA pattern of the purchase and payments process? -Records a summary of payments to suppliers during the year. -Records individual bank account balances. -Records individual payments to suppliers. -Records individual purchase transactions.

Records individual payments to suppliers.

Which of the following best describes the purpose of the purchases event in the generic REA diagram of the purchase and payments process? -Records information about the individual products in inventory -Records information about individual purchase orders -Records information about individual checks written to suppliers -Records information about individual purchase transactions

Records information about individual purchase transactions

Which of the following best describes the purpose of the employees agent in the generic REA pattern of the purchase and payments process? -Records information about the enterprises' employees -Records information about the employees that handle cash -Records information about employees that handle purchase transactions -Records information about the enterprises' departments

Records information about the enterprises' employees

Which of the following is not true about the REA framework? -The REA framework is a proven approach to describing business processes. -The REA framework meets accounting, but not broad management information, requirements. -The term REA stands for resources-events-agents. -UML class models are used to present a process or processes in the REA framework.

The REA framework meets accounting, but not broad management information, requirements.

Which of the following is true about the typical multiplicities found on the association between the Purchase Orders event and the Products resource in the purchase and payments process? -The minimum and maximum next to the event are both one (1) -The minimum multiplicities on both sides are one (1) -The maximum multiplicities on both sides are one (1) -The maximum multiplicities on both sides are many (*)

The maximum multiplicities on both sides are many (*)

True or false: The purpose of swimlanes in a BPMN activity diagram of the purchase and payments process is to show different organizational responsibilities.

True. Reason: Swimlanes show responsibility

True or false: the multiplicities on the duality association between purchases and cash disbursements depend on the nature of the business as well as the terms of individual purchases.

True. Reason: The multiplicities are set by business policy which depends on the nature of the business, so this statement is true.

If Sunset Graphics always made at least a partial payment for purchases at the time of receipt, the minimum multiplicity next to the Cash Disbursement event would change from 0 to ____.

1 / one

List the basic activities in a BPMN activity diagram in sequence. -Receive Items -Send Payment -Request Prices -Place Orders

1. Request Prices 2. Place Orders 3. Receive Items 4. Send Payment

For Sunset Graphics purchase and payment process, the appropriate multiplicities between the purchase order event and the products resource should indicate that each purchase order can request a ____ of one product and a ____ of many products.

1. minimum 2. maximum

For Sunset Graphics purchase and payment process, the appropriate multiplicities between the purchase order event and the products resource should indicate that each product can be ordered a minimum of ____ times and a maximum of ____ times.

1. zero / 0 2. many / multiple

In Figure 6.6, the UML class diagram of Sunset Graphics purchase and payment process, the "Purchase Orders" event is a ____ event.

commitment

In BPMN 2.0, gateways do not represent activities, so the criteria for branching is assessed prior to the ____.

gateway / branching / gateways

Match the business policy to the appropriate multiplicities, where the first multiplicity is next to the purchases event and the second multiplicity is next to the cash disbursement event in the duality association for the purchases and payments process. -1..1 and 0..* -1..* and 0..1 -1..1 and 0..1 -0..1 and 1..1 -Each cash disbursement can pay for several purchases. -Purchases are paid fully in advance. -Each purchase can be paid for over time. -Each purchase is paid separately and in full within 30 days.

-1..1 and 0..* <-> Each purchase can be paid for over time. -1..* and 0..1 <-> Each cash disbursement can pay for several purchases. -1..1 and 0..1 <-> Each purchase is paid separately and in full within 30 days. -0..1 and 1..1 <-> Purchases are fully paid in advance.

Which of the following provide the best interpretations of the multiplicities for the association between the cash disbursement event and the cash resource in the generic REA model of the purchase and payments process? -Each cash disbursement is made from one account. -Each cash disbursement is made from many accounts. -Each account can have many cash disbursements. -Each account must have at least one cash disbursement.

-Each cash disbursement is made from one account. -Each account can have many cash disbursements.

Which of the following best interprets the multiplicities between the purchases event and the inventory resource in the generic REA model of the purchase and payments process? -Each inventory item is only purchased once. -Each inventory item could be purchased many times. -Each purchase may involve multiple inventory items. -Each purchase involves only one inventory item.

-Each inventory item could be purchased many times. -Each purchase may involve multiple inventory items.

Which of the following must be true to collapse the Purchase Order and Receipts events into one event? (Check all that apply). -Each purchase order results in a maximum of one receipt. -One purchase order can result in multiple receipts. -Every receipt is preceded by a purchase order. -Each receipt is a result of a maximum of one purchase order.

-Each purchase order results in a maximum of one receipt. -Every receipt is preceded by a purchase order. -Each receipt is a result of a maximum of one purchase order.

Which of the following are true about the association between the suppliers agent and the purchases event in the generic REA model of the purchase and payments process? -Each purchase requires multiple suppliers. -Each purchase requires one supplier. -Each supplier participates in one purchase. -Each supplier may participate in multiple purchases.

-Each purchase requires one supplier. -Each supplier may participate in multiple purchases.

Which of the following are access controls for the purchase and payments process? -Employees must obtain management approval for return of defective items -Employees placing items in inventory cannot modify purchase orders -System must supply supplier return address -Employees preparing purchase orders cannot modify inventory records

-Employees placing items in inventory cannot modify purchase orders -Employees preparing purchase orders cannot modify inventory records

Which of the following are differences between UML class models of the sales and collection process and the purchase and payments process using the REA framework? -Resources are different. -External agent is different. -Internal agent is different. -Events are different.

-Events are different. -External agent is different.

Which of the following are business objectives for the purchases and payments process? -Purchase needed inventory. -Segregate defective items. -Use reliable suppliers. -Pay suppliers on time.

-Purchase needed inventory. -Use reliable suppliers. -Pay suppliers on time.

Which of the following are application controls for the purchase and payments process? -System must supply supplier return address. -Employees placing items in inventory cannot modify purchase orders. -System must provide purchase order number control. -Employees preparing purchase orders cannot modify inventory records.

-System must supply supplier return address. -System must provide purchase order number control. Reason: the others are access control issues.

Which of the following are true about the basic REA pattern for UML class diagrams of the purchase and payments process? -The value of the cash resource is increased when items are received. -The external agent is the supplier of the purchased items. -There are two economic events: purchase receipts and cash disbursements. -The value of the products resource is increased when items are received.

-The external agent is the supplier of the purchased items. -There are two economic events: purchase receipts and cash disbursements. -The value of the products resource is increased when items are received.

Which of the following best describe features of a UML class model of Sunset Graphic's purchase and payments process as shown in Figure 6.6? -There are three events but only two affect the accounting statements. -There is one internal and one external agent participating in each event. -All payments to suppliers are made from one specific bank account. -Purchase orders specify quantities and prices of items ordered.

-There are three events but only two affect the accounting statements. -There is one internal and one external agent participating in each event. -Purchase orders specify quantities and prices of items ordered.

Which of the following would be present in a BPMN collaboration model of the purchases and payments process? -Start events -Sequence flows -Two pools -Message flows

-Two pools -Message flows

The generic REA model for the purchases and payments process includes which of the following? -Two resources -Two agents -Two events -Two type events

-Two resources -Two agents -Two events

Which of the following is the best interpretation of the standard multiplicities for the association between the Purchase Order event and the Products resource in the purchase and payments process? -Each purchase order orders at least two products -Each purchase order orders one product -Each product can be ordered many times -Each product is ordered once

Each product can be ordered many times

Which of the following is true about the cash disbursements table's foreign keys based on a typical UML class model of the purchase and payments process using the REA framework? -There are always three foreign keys -There are always four foreign keys -There are always at least four foreign keys -There are always at least three foreign keys

There are always at least three foreign keys

Each check is normally written on one bank _____.

account

In the REA framework, _____ associations reflect a permanent relationship outside the normal events in the purchase and payments process

assignment / assignments

The association between the "Sunset Partners" agent and the "Product Categories" type image shows the ____ of Sunset employees to manage particular product categories.

assignment / assignments

When developing a UML class model of the purchase and payment process, it is best to start with the ____ pattern and then modify that diagram to reflect the unique information structure of a particular company.

basic / generic

The primary purpose of the UML class diagram of the purchase and payments process is to create a ____ for the development of a relational database.

blueprint

When the "Purchase Orders" event always has a one-to-one relationship with the "Receipts" event, the two events can be ____ into one event as long as an attribute indicates that the products were received.

combined / collapsed

The intermediate timer event, the intermediate event with the clock hands, can indicate a ____ until (1) a specific date, (2) a relative time such as 30 days, or (3) a relative repetitive date such as next Friday at noon.

delay, time, or delays

For the purchase and payment process, the two economic events that define the process are the receipts (purchases) event and the cash ____ event, as shown in Figure 6.6.

disbursement, disbursements, payments, or payment

In the generic REA framework, the suppliers class is an example of an __________ agent. -suppliers -supplier -external

external