Chapter 05 Sales and Collections Business Process Answer Key

True / False Questions

1.

Type images can be used to allow process information to be summarized by

category.
TRUE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

2.

BPMN models can describe the collaboration between two organizations using
pools.
TRUE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Understand and apply different activity modeling options.
Source: Original
Topic: Sales and Collections

3.

A BPMN process flow can start in one pool and end in the collaborating pool.
FALSE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Understand and apply different activity modeling options.
Source: Original
Topic: Sales and Collections

5-1
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4.

In a collaboration model using BPMN, the interaction between participants is called

orchestration.
FALSE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Understand and apply different activity modeling options.
Source: Original
Topic: Sales and Collections

5.

A pool in a BPMN model does not actually have to display any activities.
TRUE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-03 Understand and apply different activity modeling options.
Source: Original
Topic: Sales and Collections

6.

An intermediate error event can be used to model process exceptions.

TRUE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Understand and apply different activity modeling options.
Source: Original
Topic: Sales and Collections

7.

Application controls limit who can change records in a system.

FALSE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Develop business rules to implement controls for the sales and collection process.
Source: Original
Topic: Sales and Collections

5-2
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8.

Segregation of duties is an example of a COSO control activity.

TRUE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 05-04 Develop business rules to implement controls for the sales and collection process.
Source: Original
Topic: Sales and Collections

9.

Business rules are unrelated to COSO control activities, although they serve an
important purpose.
FALSE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-04 Develop business rules to implement controls for the sales and collection process.
Source: Original
Topic: Sales and Collections

10.

One-to-many relationships are implemented by posting a foreign key.

TRUE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Use multiplicities to implement foreign keys in relational tables.
Source: Original
Topic: Sales and Collections

11.

Many-to-many relationships are implemented by posting a foreign key.

FALSE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Use multiplicities to implement foreign keys in relational tables.
Source: Original
Topic: Sales and Collections

5-3
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McGraw-Hill Education.

12.

One-to-one relationships are implemented by creating a linking table.

FALSE
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-06 Use multiplicities to implement foreign keys in relational tables.
Source: Original
Topic: Sales and Collections

Multiple Choice Questions

13.

Which of the following best describes the purpose of a BPMN collapsed subprocess?

A.
B.
C.
D.

Show the interchange between two pools.

Depict the sequence of activities in one pool.
Contain a series of activities that are hidden from view.
Illustrate process flow when an exception occurs.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Develop an activity model of the sales and collection process.
Source: Original
Topic: Sales and Collections

14.

Which of the following best describes the purpose of an intermediate error event?

A.
B.
C.
D.

Show the interchange between two pools.

Depict the sequence of activities in one pool.
Contain a series of activities that are hidden from view.
Illustrate process flow when an exception occurs.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-02 Develop an activity model of the sales and collection process.
Source: Original
Topic: Sales and Collections

5-4
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McGraw-Hill Education.

15.

Which of the following best describes the difference between access controls and
application controls?

A. Access controls limit who can change records and application controls provide
an audit trail of any changes.
B. Access controls implement business rules and application controls do not.
C. Access controls are "prohibited" business rules and application controls are
"allowed" business rules.
D. There is no difference between access and application controls.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-03 Understand and apply different activity modeling options.
Source: Original
Topic: Sales and Collections

16.

Review the following diagram. Which answer provides the best interpretation of
the multiplicities for the association between the Quote class and the Order class?

A. Quotes and orders are entered into the system at the same time.
B.
Each quote may result in many future Orders.
C. One Sunset Partner both prepares quotes and records orders.
D.
Each order must result from a prior quote.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

5-5
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McGraw-Hill Education.

17.

Refer to the following diagram. Which of the following answers provides the best
interpretation of the multiplicities for the association between the Order class and
the Products class?

A. Each order must specify the same products as the previous quote.
B.
Each product has been ordered at least once.
C.
An order does not have to include a product.
D.
An order may include many products.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

5-6
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McGraw-Hill Education.

18.

Refer to the following diagram. Which of the following answers provides the best
interpretation of the multiplicities for the association between the Cash Receipt
and Cash classes?

A.
B.
C.
D.

Each cash receipt is deposited into one bank account.

Each order increases accounts receivable.
The company only has one bank account.
Some cash receipts are not deposited into a bank account.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

5-7
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McGraw-Hill Education.

19.

Refer to the following diagram. Which of the following answers provides the best
interpretation of the multiplicities for the association between the Orders and Cash
Receipt classes?

A.
Some customers pay for their orders in advance.
B. Some orders result in several payments from the customers.
C. Each cash receipt pays for at least one order, but it could pay for many orders.
D. Each cash receipt pays for a minimum of 0 orders and a maximum of 1 order.
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

20.

Refer to the following diagram. Which of the following answers does not provide a
valid interpretation of the multiplicities for the association between the Employees
and the Product Categories classes?

A. Employees are assigned to manage product categories.

B.
Each product category has one manager.
C. Each product category can have no managers or multiple managers.
D. Each employee can manage only one product category.
AACSB: Analytic
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McGraw-Hill Education.

AICPA BB: Leveraging Technology

AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

21.

Refer to the following diagram. Which of the following answers does not provide a
valid interpretation of the multiplicities for the association between the Employees
and the Sales classes?

A.
B.
C.
D.

Only one employee participates in each sale.

Several employees participate in each sale.
Some employees do not participate in sales.
Some employees participate in several sales.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

5-9
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McGraw-Hill Education.

22.

Refer to the following diagram. Which of the following answers does not provide a
valid interpretation of the multiplicities for the association between the Inventory
and the Product Category classes?

A.
B.
C.
D.

Every inventory item is in at least one product category.

Every product category includes at least one inventory item.
Some product categories do not include inventory items.
Every inventory item is in at most one product category.
AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

Essay Questions

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23.

La Jolla Management Company (LJMC) manages several apartment complexes and

earns revenues by renting out the apartments in those complexes. LJMC assigns an
agent/manager (employee) to each complex (one manager can manage several
complexes) to handle day-to-day operations, such as maintaining the property,
advertising, and signing rental contracts. This case describes the rental (sales)
process.
Complexes and apartments. LJMC has acquired fifteen and built several more new
apartment complexes over the last two years. It identifies complexes by unique
name and apartments by the combination of the complex name and apartment#.
LJMC categorizes each apartment according to the number of bedrooms and
bathrooms, as well as other factors. There are more than 20 apartment categories
at present, each identified by unique category #. Since each complex presents a
unique set of luxury appointments and amenities, LJMC determines the standard
monthly rental fee by considering both the apartment category and complex, for
example 2 bedroom 1 bath apartments (category 21) rent for $1850 per month in
the El Dorado Arms complex (where there is no view and the complex is close to a
freeway) but the same category apartments rent for $2850 per month in the La
Jolla Cove complex (where there is a view of the ocean from most apartments in
the complex).
Rentals. LJMC managers negotiate rental contracts with tenants. Rental contract
duration is 12 months from the designated apartment availability date (the date
the apartment is available to the tenants). Although there is a standard monthly
rental fee for each apartment in each building, agents may negotiate higher or
lower rents if they see the need to do so. It is important to have a full record of the
actual rent for all apartments. When there is more than one tenant per apartment,
LJMC requires every tenant to sign the rental contract. LJMC assigns a unique
tenant ID# to each tenant and issues them ID cards to control access.
Cash Receipts. LJMC collects the first month rent in advance from the tenants
when the rental contract is signed and then collects payments monthly for the life
of the contract. Assume that LJMC does not receive cash from other sources.
Other Information. Agents, resources, and type images may be recorded in the
database before they are linked to other entities. LJMC tracks all its employees in
one employee class.
REQUIRED: 1) use the information above and the list of attributes below to draw a
UML class diagram showing the classes, associations, and multiplicities, 2) prepare
a listing of the tables necessary to support La Jolla Management Company's
process using all the attributes. Name each table and clearly identify primary keys
with PK and foreign keys with FK. List your tables in the following order:
RESOURCES, EVENTS, AGENTS, TYPE IMAGES, and LINKING. Use only the following
list of attributes (remember that there should be no entities without attributes).
Attributes

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McGraw-Hill Education.

Diagram:

Table listing:
Resources
Apartment Complex = apartment complex name (PK), apartment complex
address, date constructed, total square footage, count of apartments in this
complex, employee# (FK) (agent/manager)
Apartments = complex name + apartment# (PK), apartment square footage,
count of rooms in apartment, apartment category (FK)
Cash = bank account# (PK), bank account balance)

5-12
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Events
Rental Contract = rental contract# (PK), actual monthly rent, rental contract date,
employee # (FK), complex address + apt # (FK)
Cash Receipt = cash receipt# (PK), cash receipt date, bank account# (FK),
employee# (FK), tenant ID# (FK), rental contract# (FK)
Agents
Employee = employee# (PK), employee name, employee monthly salary
Tenant = tenant ID# (PK), tenant name, tenant credit rating
Type Images
Apartment Category = apartment category# (PK), number of bedrooms for
apartments in this category, number of bathrooms for apartments in this category,
count of available apartments in this category
Linking
Rental Contract-Tenants = rental contract# + tenant# (PK)
Apartment Category - Complex = apartment category# + complex name (PK),
standard monthly rent)

AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

5-13
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McGraw-Hill Education.

24.

Pacific Green Company (PGC) provides landscaping services to individual and

corporate customers in southern California. Heather F originally founded PGC as a
lawn mowing service while she attended graduate school. It became so successful
that she delayed her teaching career to concentrate on building the company. This
case describes PGC's landscaping jobs (sales) process.
PGC maintains an inventory of trucks of all sizes to support various landscaping
requirements (the acquisition of trucks are outside the scope of this case). PGC
tracks the trucks by vehicle identification numbers (VINs) and keeps meticulous
records on each truck. For example, they track the mileage for each truck on each
landscaping job. Additionally, they track the maintenance history for each truck
(maintenance is outside the scope of this case). Each type of truck has a different
use and hauling capacity, but each truck in a particular truck type has the same
use and hauling capacity.
PGC also maintains an extensive inventory of plants, ranging from colorful flowers
to large trees, so they can address almost any landscaping requirement on short
notice. Since the common name of many plants vary by region, PGC tracks its
plant inventory by scientific names (i.e., the Latin names). To manage the plant
inventory and ensure that the best plants are applied to job conditions, Heather
categorizes all plants by plant type.
PGC performs landscaping jobs for individual and corporate customers. Before
performing any job, Heather prepares a quote describing the scope of service and
the price. Sometimes, the customer will elect to perform pieces of the overall
quote, so one quote may result in several landscaping jobs. The landscaping quote
presents a price estimate based on the types of plants and types of trucks required
and the overall time involved. Each quote involves at least one truck type and one
plant type.
PGC tracks landscaping jobs by job #. Each landscaping job may require many
plants and several trucks. PGC typically assigns multiple employees to each job as
follows: (1) one supervisor, (2) one truck drivers per truck, and (3) landscaping
laborers. PGC specifically tracks which employees perform which of these
functions on specific jobs, since they pay employees according to the work
performed on each landscaping job. Customers must pay a 10% deposit when the
job begins, another 50% when the job is half completed, and the final 40% within
two weeks after the job is fully completed. Customer payments are made by check
or credit card and processed for daily deposit by a PGC cashier.
PGC keeps all employee information together (your model should show one
Employee class). They track each employee's qualifications according to category:
purchasing agent, cashier, landscaping laborer, truck driver, supervisor, etc. An
employee is considered qualified when he or she reaches the number of training
hours required for that category. However, each employee can hold qualifications
for several categories, for example an employee qualified as a purchasing agent
could also be qualified as a truck driver.

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You may assume that all agent, resource, and type image information is entered
into the database before any process activity takes place. You may also assume
that PGC only receives cash from landscaping jobs.
REQUIRED: 1) use the information above and the list of attributes below to draw a
UML class diagram showing the classes, associations, and multiplicities, 2) prepare
a listing of the tables necessary to support PGC's process using all the attributes.
Name each table and clearly identify primary keys with PK and foreign keys with
FK. List your tables in the following order: RESOURCES, EVENTS, AGENTS, TYPE
IMAGES, and LINKING. Use only the following list of attributes (remember that
there should be no entities without attributes).
Attributes:

Diagram:

5-15
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McGraw-Hill Education.

Table listing:
Resources
Cash = cash account # (PK), cash account balance
Plants = plant scientific name (PK), plant common name, quantity on hand, plant
category name (FK)
Trucks = truck VIN (PK), truck make, truck acquired year, truck mileage to date,
truck type (FK)
Events
Cash receipt = cash receipt # (PK), cash receipt date, cash receipt amount, cash
account # (FK) employee # (FK), customer # (FK), landscaping job # (FK)
Landscaping job = landscaping job # (PK), start date, price, customer#,
landscaping quote # (FK), employee # (supervisor) (FK)
Landscaping quote = landscaping quote # (PK), quote date, quote expiration date,
quote amount, customer # (FK), employee # (FK)
Agents
Employee = employee # (PK), employee name, employee hire date
Customer = customer # (PK), customer name, YTD sales $ to this customer
Type Images
Employee type = employee type (PK), number of training hours to qualify, number
of employees qualified
Plant category = plant category name (PK), expected maximum size of plants in
5-16
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McGraw-Hill Education.

this category, light required for plants in this category, average cost of plants in
this category
Truck type = truck type (PK), truck type use, truck type hauling capacity, average
daily cost to use trucks of this type
Linking Tables
Quote - Plant Categories = landscaping quote # + plant category name (PK),
number of plants in this category bid on this quote
Quote - Truck Types = landscaping quote # + truck type (PK), number of trucks of
this type bid on this quote
Job - Trucks = landscaping job # + truck VIN (PK), hours this truck used on this job
Job - Plants = landscaping job # + plant scientific name (PK), count of this plant
used on this job
Truck Drivers = landscaping job # + employee # (PK), hours this truck driver
worked on this job
Landscape Laborers = landscaping job # + employee # (PK), hours this landscape
laborer worked on this job
Employee - Employee Types = employee # + employee type (PK), date this
employee qualified for this type

AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-05 Develop UML Class Diagrams for the sales and collection process.
Source: Original
Topic: Sales and Collections

5-17
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McGraw-Hill Education.

5-18
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McGraw-Hill Education.

25.

Pacific Green Company (PGC) provides landscaping services to individual and

corporate customers in southern California. Heather F originally founded PGC as a
lawn mowing service while she attended graduate school. It became so successful
that she delayed her teaching career to concentrate on building the company. This
case describes PGC's landscaping jobs (sales) process.
After the customer contacts PGC about a landscaping project, a PGC manager
prepares a quote describing the scope of service and the price. After reviewing the
quote and comparing PGC's quote to other landscapers, customers may 1) accept
the quote, 2) notify PGC that they did not get the job, or 3) request that the quote
be modified. If the customer accepts the quote, they sometimes request that the
project be completed in a series of jobs. Each job is handled separately. Jobs are
then performed according to an agreed upon schedule until the overall project is
complete.
Each landscaping job generally proceeds as follows after the contract for the job is
signed. The PGC manager responsible for the quote assigns the trucks and selects
the plants for the job. Then, the manager assigns the job team: the job supervisor,
truck drivers, and landscaping laborers, to the job. At that point, the PGC job team
performs the job. Customers must pay a 10% deposit when the job begins (that
payment is made when they sign the job contract) and the final 90% is due when
the job is completed. Customer payments are made by check or credit card and
processed for daily deposit by a PGC cashier. After PGC starts the job, the cashier
bills the customer for remaining 90% due. Customers either make the final
payment or demand rework to bring the job up to the contract requirements. When
the job is completed satisfactorily, the customers then pay the amount due.
Occasionally, some deadbeat customers withhold further payment for unknown
reasons. In that case, PGC either refers the debt to a collection agency or writes off
the remainder of the amount due. Of course, PGC does not perform the remainder
of the jobs in the project when the customer fails to pay.
REQUIRED: Using the description above, prepare a BPMN activity diagram with
pools (customer and PGC) and swimlanes that accurately depicts the PGC sales
process.

The activity is a slightly more complicated version of the diagrams shown for
Sunset in chapter 6. Here is a simple activity diagram with the basic steps.

The use of pools and addition of different paths make the solution more

5-19
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McGraw-Hill Education.

complicated. The solution should look something like this, although a variety of
solutions are possible.

AACSB: Analytic
AICPA BB: Leveraging Technology
AICPA FN: Leveraging Technology
Blooms: Apply
Difficulty: 3 Hard
Learning Objective: 05-03 Understand and apply different activity modeling options.
Source: Original
Topic: Sales and Collections

5-20
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McGraw-Hill Education.