Richie’s Diner is a 1950s style restaurant chain with locations throughout south

Question

Richie’s Diner is a 1950s style restaurant chain with locations throughout southern California; you can learn more about them at www. richiesdiner.com/. Richie’s has a fairly standard process for serving food that goes something like this:

1. Seat customers.

2. Give each customer a menu.

3. Take the customer’s drink order.

4. Take the customer’s food order.

5. Prepare the food.

6. Deliver the food to the table.

7. Present the bill at the end of the meal.

8. Collect payment.

Servers record drink and food orders on paper; the kitchen uses those orders to prepare the

food. Servers use copies of the orders to prepare the bill. Customers are supposed to pay

at the cash register, but many give their credit card or cash to the server for processing.

a. Consider the five business processes described in the chapter. Which one best applies to the

activities described? Why?

b. Does Richie’s need an accounting information system? Why or why not?

c. If you were an accountant for Richie’s, how might you demonstrate the AICPA core competencies discussed in the chapter in your interaction with management?

d. Suggest one example of each generic AIS element within the context of Richie’s. The

generic elements are input, process, output, storage, and internal control.

e. Do a Google search on “operating a successful restaurant.” Pick one of the articles it produces and evaluate it using the UMUC criteria.

Explanation / Answer

Answer

Answer (a)

AIS study will also help you understand business processes from an accounting

point of view; business processes are a very common way of organizing AIS courses.

here’s a brief overview of a few:

Sales/collection process : This process comprises activities from taking a customer’s

order to collecting payment from the customer. It involves documents such as a remittance

advice and customer invoice; common transactions include sales on account and

collecting cash on account.

Acquisition/payment process: This process can apply to just about any resource an

organization needs, but is most commonly discussed in the context of inventory.Common transactions include purchasing inventory on account and paying vendor invoices.

Conversion process : When an organization manufactures a product, it has a conversion

process. You may recall from previous study that product costs come in three groups:

direct material, direct labor, and overhead. In the conversion process, organizations

combine these three resources to create a finished product; they then sell that product

through their sales/collection process.

Financing process : Virtually no organization can obtain all the cash it needs to operate

simply by selling goods and services; most periodically need to acquire external financing

in the form of debt (such as bonds payable) and equity (such as capital stock). The

financing process deals with that aspect of the company.

Human resources process : The human resource process encompasses activities such as

hiring new employees, evaluating employee performance, paying employees, and managing

their separation from the company. This process is heavily regulated by federal

and state law.

From above five processes, Sales/collection process best applies to the activities described. Because business process of Richie’s Diner starts with taking the customer’s drink & food order and finishes with Collection of payment.

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