EXISTING ACCOUNTING INFORMATION SYSTEM

A. General Overview

Puto Taktak completely implements a manual accounting system to process its transactions.
There are two main transactions. First, is accounting for its revenue which consists of selling
their product. Second, is accounting for their expenditures which encompass daily purchases
and small expenditures.

B. Revenue and Receipts Cycle

The revenue cycle begins when the owner serves the order the customer placed. The
customer pays immediately after the food is received. Subsequently, the owner places the cash
received inside the cash box. Both stalls implement the same procedures. At the end of the day
both cash boxes are combined to be counted either by the owner or his wife, interchangeably.
They do not record their daily sales nor keep track of the number of puto sold for the day. As
long as the purchased grated cassava is fully consumed, they are certain that they’ve achieved
break-even and gained. The owner’s wife keeps custody of the cash collection.

RESPONSIBILITY PROCESS WORK INSTRUCTION

Serves the number of
puto the customer
Owner ordered.
Places the cash in the
Owner cash box.
Combines both cash
boxes and counts the
Owner or Wife total collection.

Keeps custody of the

Wife cash collection.
 C. Expense and Disbursements Cycle

Puto Taktak expenditure cycle is mainly purchasing the ingredients for their product.
They have established a budget for daily purchases. The wife takes this budgeted amount from
the cash collection and is given to the owner who will purchase the ingredients. Every end of
the business day the owner assesses what ingredients should be purchased. Being in the
business for so long he does not prepare a shopping list, then the owner spends the budget
appropriately.

All other small expenditures for the day are taken from the cash box, such as viand for
lunch and in cases when additional ingredients are needed. Both the owner and his wife are
authorized to take any amount from the cash box. At the end of the day, there are neither
records nor receipts for all their expenses however they are certain that they have spent in
accordance with their established budget.

RESPONSIBILITY PROCESS WORK INSTRUCTION

Takes the established
budget for purchases
from the cash collection
and gives it to the
Wife owner.
Checks the ingredients
left and identify which
Owner should be purchased.
Spends the budgeted
Owner amount accordingly.
Withdraws cash from the
cash box for small
Owner or Wife expenditures.
SWOT ANALYSIS- AIS

STRENGTHS:

1. Centralized – all cash receipts and disbursements are on one location only.

2. Security – the wife keeps the cash box at the end of the business day.

3. Establishment of responsibility – the owner and his wife has control on all the activities of the
business.

4. Physical Control – all cash collections are placed in a cash box.

WEAKNESSES:

1. Segregation of Duties – the wife have access to the cash box and takes custody of it.

2. Documentation Procedures – no receipts from purchasing transactions.

3. Independent Internal Verification – both the owner and his wife counts the cash collection
interchangeably but the other one does not verify it.

4. Incomplete Procedure – no record keeping function.

OPPORTUNITIES:

1. Professional Judgment – since they have established themselves into this business they can
easily assess the financial standing of their business even without records.

2. Basic Accounting – the business may improve by having a knowledge of basic accounting.

3. Profitability – the business gets its breakeven point by selling 50% of their product.

THREATS:

1. Improper use of funds– both has access to the cash box and can use it for personal reasons.

2. Miscalculations – the owners only use professional judgment to monitor their performance.

3. Inaccurate Cost Data – no proper way of budgeting.

FINDINGS
They’ve established their own usual business
practice of estimating only the number puto
they had made and sold for the day.
Their own way of verifying that they have
covered their capital for the day is based on for the day by matching it to the total
the main ingredient, crated cassava. Once it
is fully consumed they can estimate that their
income is greater than their expenses.
Every day they combine their cash collections
at their house. They are not particular as to
who will do the counting.
In the past, they’ve tried to record their
revenue and expenses however since they
are also the ones who manages their
business they could not keep track and
continue their daily recording.
FINDINGS
Most of the ingredients are fully used each
day, so the owner purchases every morning.
Both have access to the cash box and so they
can withdraw cash from it as they want.
Immediately after counting their total
collections the owner’s wife separates a
budgeted for the purchase of ingredients.
The method they use in controlling their daily
expenses is through professional judgment
only. They have been familiar with their daily
expenses that they will instantly know if their
expenses have been too large.
RECOMMENDATION
The owner should maintain a list of the
number of puto taktak made for the day.
The owner’s wife should verify the total sales
collections for the day.
Since they do the cash count
interchangeably, the other one should
recount it for verification.
A record of Daily Receipts must be
maintained detailing the daily income. Every
week, this should be compared to their cash
disbursements to quantify how much they
have earned.
RECOMMENDATION
The owner should assess which ingredients
are needed for the day.
Small expenditures should be listed which is
summed up and recorded in a voucher daily.
The owner’s wife should be consistent in
implementing the budgeted amount, making
sure that it is being followed.
A record of Daily Disbursement must be
maintained detailing the daily expenses.
Every week, this should be compared to their
cash receipts to quantify how much they
have earned.
REVENUE AND RECEIPTS CYCLE

1. Purpose- The purpose of this policy is to establish, policy statements, guidelines and
procedures to effectively manage the Revenue and Receipts Cycle transactions of the business.

2. Scope- This policy applies to all their business transactions that involve cash inflows.

3. Policies/ Guidelines- Daily revenue of the business must be supported by a source document,
the Inventory List. This list will detail the number of puto taktak made and sold in a day.

4. Procedures-

RESPONSIBILITY PROCESS WORK INSTRUCTION

Updates the Inventory List,

with number of puto taktak
Owner made for the day.
Computes the number of
puto taktak sold for the
Wife day.

Wife Makes cash count.

Matches the amount sold

to the amount of cash
Wife counted.

The total revenue for the

day is recorded in the Cash
Wife Receipts List.
EXPENSE AND DISBURSEMENTS CYCLE

1. Purpose- The purpose of this policy is to establish, policy statements, guidelines and
procedures to effectively manage the Cash Disbursements transactions of their business.

2. Scope- This policy applies to all their business transactions that involve cash outflows.

3. Policies/ Guidelines- Daily cash receipts by the business must be supported by a source
document, the Daily Disbursement List. A Petty Cash Fund should be established for daily
purchases. Every item that purchased must be in this list, which must then be compared to the
receipts from stores for confirmation and entered to the Cash Disbursement List.

4. Procedures-

RESPONSIBILITY PROCESS WORK INSTRUCTION

The owner evaluates which

Owner ingredients will he purchase.
All small expenditure is
listed, and the daily total
Owner or wife recorded in a voucher.
The wife, who has custody of
the cash box, is the only one
authorized to withdraw cash
Wife based on the voucher.

The total expenses for the

day is recorded in the Cash
Wife Disbursement List.
https://www.draw.io/?lightbox=1&highlight=0000ff&edit=_blank&layers=1&nav=1#R5VlZk5s4E
P41flwXN%2BbR40yyqcpspXaytcmjAgpoR0askMd2fn1aRhokwGN8Ta4XG7WEjv7660NM%2FMV
y84ajqrhjGaYTz8k2E%2F%2FVxPNmcQS%2FUrBtBIGbNIKck6wRua3gnnzFSugo6YpkuLYGCsaoIJU
tTFlZ4lRYMsQ5W9vDvjBqr1qhHPcE9ymiWjoNW%2Fm%2FJBOFkrtR0nb8iUleqMVnnjryZ5Q%2B5
JytSrViyUrc9CyRnkadsi5QxtaGyL%2Bd%2BAvOmGielpsFplKvWmf6PbHVG534N4VYUmi48Ljrfr3n
ZXfMy3AujkthLrdvPr2bR0RXesLuCjgDtaom46JgOSsRvW2lNztNYTmlY2%2FnPyzEVlkGWgkGonaG
d4xValwtEBdqXNPm7OEJM2%2FwYFoVbMVTjfiskckdG4PU0d9gtsSCb2EAxxQJ8mibD1L2lj%2BN
e3r1PSOwrOcoaoSRshPFDC907CmaTam3TPUfmMgPY3si0EuORW8ieDDO04p26O5BOvwhkP7CS
g205xyH9Augqj2GxtXxT8Z1GnizMHabX9%2BeNnJGoTznHG2NYZUcUB9hlmr7Y62vMx4emh2cbH
IjLI5SCAfSstYFEfi%2BQjsuryEg2fZ1hJ08Yi7w5llLUb1BklgKcEOF%2F9qIFr6SFUag6AJoGpfF0We04
w9oJ6JCccRSU%2FT%2FiumOP%2Bode%2BYwwHeqTdsJT7n8v%2F8w%2F%2FuDngo20czW9PX
0D4oSQ4peMMo4SHaBDxYmlHZEiJK8hGYK6scgv5FqJxB956pjSbKM7kPW9iNXATcMnQ6d3bgPb
%2BD00fUugK4ORQa8%2F1QZEpAQQRpUQDbhvC0f4XRst%2Bd3pBY9cGwlHSKIzkPcYbzOcLzHE
MrteDq3T6hwQOWXIJQX%2F%2BwRzsplku%2BTywRhomlz%2BSREH%2BoMp%2BcNOr0FW1Yr
k1wZIlRqp5blwEhneFG%2BvQi%2FfM2bl%2BCX5vKV%2BGXWALILl9lcVoEyxlBU1yRthK8JPZeS3V
D1mQnBlseB1pBCwRJdhavH53%2BxZR2h3yn%2Bjhtv53%2BH33aTaedEe9LlExyHH13S1PCGiI9SP
IWqqGl%2B0l0l7Mnsk%2B1Pe0z0Fyh6otj2KMHsxFL24ESXiyLRmMLip3BEJ%2BYG2t9YPii%2BtM
GMjQt6NwYcd0ikxd5o7ICCdE%2BK6gL%2BWCkDFiqz6wbll0mCZ57tGOOBIB0PBOkuY04K0kNl5
W%2FFjXiAG9fJpc%2B9n4mDQ%2FH52fFn388E%2FYLpPcdSv7XBWY5TTCp5LnisALpfgqJu524gSk
aS9BKZdHB%2BGTR893P716uxxc73vnmbdQCI42SaGFemUR%2BOa93ERcHZcAxXpXfoYUclFeRS4
In4oYrRHmADsI4uRo2bgyuUo9BsP6o1zq79aunffgM%3D
https://www.draw.io/?lightbox=1&highlight=0000ff&edit=_blank&layers=1&nav=1#R3VlNc5sw
EP01PjYjkI3hmNhue0g7nTjTnGWQQY1AVIgY99dXAsmAwU1SEybOyWJXX7x9%2B7TCE7iIiy8cpd
E3FmA6sUFQTOByYtvWdAblj7LsK4szm1WGkJNAd6oNa%2FIHayPQ1pwEOGt1FIxRQdK20WdJgn
3RsiHO2a7dbctoe9UUhbhjWPuIGuvVrLY%2FkEBE2m45Xu34ikkY6cVd26kcG%2BQ%2FhpzliV4xY
QmuPDEy0%2Bi3zCIUsF3DBFcTuOCMiaoVFwtMFbAGMzNO7M1GJ%2FAmEjGVD5Zslu7PJwZbLx
ks34vjRDSXOzkfsKshT4jmZsbjJXAgcdWPjIuIhSxBdFVbb0qosJoTtPfzCwux19RAuWDSVM9wy1ja2r
da6Cii9YuYV2c593UvvVWBeIhNL%2FcQA0lszGIs%2BF724ZgiQZ7a0yPNsPDQr4ZKNjRa%2Fcj14eZ
QuYubLZNbbgLo%2FM6ZcXzKSjCuZQcI0qJ2ylaoftf313f3Ziq5iWq2yteNDKUym1QEdhEReJ2iEpqd
TOh2HDLB2eMhCexepmhQnjAXuGiYumBq79RzqyFaICwjELtGskFtixp55oDz8ffABRPXcrvMdb2R
mGsWbyC3xALzmCiRA5JJfqS6JyHHAZGvkZXKrWQx33cwbiP4HA2NWKqHLaF0wSjj8rkU2CpDNOg
2eDPazmfmZNDEtaeHs6JJXRd0qTsfgrqXrLmu16WudwLwwalrFj9Dde1e1f3Jcj%2FC%2FKW6K3m
cqmbA%2FDwu0XqO%2BZsqWreb9kndYW0P%2Fq8gMpyBEWk8vWAae6YibdIYjkRjs3gDuQcioo
CjnaqHUab0d8tZrDYY4dq2YcX7EOCBeTt1xuTt%2FJJ5C3t464xVOYBLLro8pwe60You8D7UspngcF
AoLTCafDodKO%2Bwz3hQVq0HzVxUmrkk2SbnGS7PaRvckkx8SA115mNq6OlCLEtR8v%2FX39X3Z
aMIq%2BZ6q8vveQE4uvzO%2B%2BB%2Fq8uvzrXzCmEo8S%2BBPwrBv%2FLmdeWxRBNRiikLOY
plxxRzEqur5rHvR%2B14LpjHAoaytPp4uCWFyuAhYuuYtDGp5bi998N5T3LZV3M4QH4NEN%2BPf
NGZjSl2FngfFeMwZ7cFeg7v8T4%2Bge7hXUmLPrWzGJUDcJHiJCAi5zj7AOe148IR7%2Brysf4HovQ
1%2FuOBq78%3D
https://www.draw.io/?lightbox=1&highlight=0000ff&edit=_blank&layers=1&nav=1#R3VlLc5sw
EP41PtbD%2B3F0HDc9tJ1OnU7OCihALRAVItj99ZVAMsjgR2qbcXKx0Wq1Wi2fvt21J%2BY8XT8Qk
MffcAjRxNDC9cS8nxiGbtg6%2B%2BKSTSOxfb8RRCQJhVIrWCZ%2FoRBqQlomISwURYoxokmuCg
OcZTCgigwQgitV7QUjddccRLAnWAYASenUbuVPSUhjIdcdv534ApMoFpt7htNMPINgFRFcZmLHD
GewmUmBNCNOWcQgxFVHZC4m5pxgTJundD2HiAdWxkyuoxvp6MS8i2mK2EBnj%2FX05z2L9V
MWs3MRmNHudvvsGSJErwCV0uDuDjBkYRVDTGiMI5wBtGild3WkIDepqe78hpRuBDJASTETtRa%
2BYpwLvRecUaFmcBMFJXi1fWfG4MFEKLh3HYE45gPEKaRkwxQIRIAmrypUgMBWtNXbLv2BE7aF
oYl7YHtbHIl7YGiWaqTAJQmgWNcN9oApy%2FBsV28%2BTdWss%2BMbBSSCtGd2RgjYdNRyrlAcP
MCg%2Bwe8PKTPHhoP5KgT7FZUw2wP5AYQ5yAqUKBAz%2FlTYjnxqajxMWMKppav20n2FPHv5
ePs56M0xZxorDVzfUwjxGiIY7eKEwqXOQj4TMWYUEXwG5D4CgmF64NYlCHWzR1M6bYYVx2eM
oUs7lCUo%2B0HcOcVHXwD7m1e%2BsH7PBjp5sIJkSdSS31bxAHNM6ng1EjKzTuRfAQrlvSYPzHkia
QMuVcsexGcbqUBKGI%2Bidd8f5ZkWLJkbvFlCa3T5FYVVxkkvbejxv4YhGWGqoOeIDTHCBM2rrPa
WeR7OuQtf4dVJNt1Ae9pfcDrxgUQb%2FlXIp3F9%2Fv3QTmu7irxtzRj6ndyke2Mxz%2FeR%2BIf1
%2Bzzj2eNxD9y804kZ0UBC84kDGVBXDMKTAtJKs%2BcU3LmfQwKFrub4JUeiAdifjKvWLKqOsor2i
UyqfuRkGz1kdwQ5xhItnqRfEpoHBJQcfAWKajV4TqHWZjQktTZcm9Wffe4dnxrt%2B04OWNeAtnS
8I0he1%2Bsj2P94o2h69lTc5s%2FLcNX35ZmTr3%2B7FtbxiObXKlldL0e%2BI40jUdXnN02yq70nfe
NZ5HCbhE3atfoXatxH7OGPiv8%2Fbbd8Xylih6ziHZukqD%2Fr%2FTwBkqPBm8jlB5ev%2FT4VQz1
8CAIMAmTLEKbD1Bh7FbOtq1dr75gw%2FYn8Yb92z8dzMU%2F