BUSACT702 · Accounting Information Systems
Data Flow Diagrams
Data-flow diagrams (DFDs) are the logical backbone underneath a systems flowchart in University of Auckland BUSACT 702. You learn the difference between a logical and a physical DFD, how a single-bubble context diagram decomposes into a Level-0 and then a Level-1 diagram, and the discipline of balancing so the levels stay consistent. A systems flowchart is really a logical-plus-physical DFD merged, so getting DFDs right makes the flowchart on the secure test far easier to draw.
What this chapter covers
- 01Logical vs physical DFD: logical = the process activities plus the data needed and generated; physical = the people, functional areas and physical resources
- 02The context diagram: the whole system as one process, with the external entities and the net data flows in and out
- 03Level-0 decomposition: the major processes (numbered 1.0, 2.0, ...) with data flows to external entities and data stores
- 04Level-1 decomposition: exploding one Level-0 process into its sub-processes (1.1, 1.2, ...)
- 05Balancing: the data flows into and out of a process must match between the parent level and the exploded child level
- 06Data stores, external entities and processes as the three building blocks; numbered data flows connect them
- 07Reading a DFD: e.g. capture requisition -> review POs pending -> generate purchase documents -> match purchase data
- 08How the DFD feeds the systems flowchart (logical + physical combined)
From context diagram to a balanced Level-0
- +1Context diagram: one process bubble 'Purchasing system' with the external entity Supplier. Net flows: a requisition/purchase order goes OUT toward the supplier side of the system, and purchase data (e.g. an invoice) comes IN. The context diagram shows only the net inflows and outflows to external entities — no data stores yet.
- +1Level-0: explode the single bubble into the major processes, numbered: 1.0 Capture requisition -> 2.0 Review purchase orders pending -> 3.0 Generate purchase documents -> 4.0 Match purchase data. Draw the two data stores (Supplier master list, Purchase-orders-pending) and connect the numbered data flows between processes, stores and the Supplier.
- +1Balancing check: the data flows crossing the boundary of the context diagram (to/from the Supplier) must appear, unchanged in net terms, on the Level-0 diagram. If a flow exists at Level-0 to/from an external entity that isn't on the context diagram (or vice versa), the diagram is unbalanced and must be fixed.
Key terms
- Logical DFD
- A data-flow diagram showing the process activities and the data they need and generate, independent of who performs them or where — the 'what', not the 'who/where'.
- Physical DFD
- A data-flow diagram showing the people, functional areas and physical resources that carry out the process — the 'who and where'. A systems flowchart combines the logical and physical views.
- Context diagram
- The top-level DFD: the entire system as a single process, showing only the external entities and the net data flows in and out. Data stores are not shown at this level.
- Level-0 / Level-1 decomposition
- Level-0 explodes the context bubble into the major numbered processes (1.0, 2.0, ...); Level-1 explodes one of those into its sub-processes (1.1, 1.2, ...).
- Balancing
- The consistency rule that the data flows entering and leaving a process must match between a parent level and the exploded child level, so no data appears or disappears between levels.
- External entity
- A source or destination of data that sits outside the system boundary (e.g. a Supplier or Customer); it appears on the context diagram and connects via data flows.
Data Flow Diagrams FAQ
What is the difference between a logical and a physical DFD?
A logical DFD shows what activities happen and what data flows, independent of who or where; a physical DFD adds the people, functional areas and physical resources. A systems flowchart is essentially the two merged.
What is 'balancing' and why does it matter?
Balancing means the data flows into and out of a process are consistent between levels — what crosses the boundary on the context diagram must reappear on Level-0, and a Level-0 process's flows must match its Level-1 explosion. It is the main correctness check on a DFD.
Why don't data stores appear on the context diagram?
The context diagram shows the whole system as one process interacting only with external entities. Data stores are internal to the system, so they first appear when you decompose to Level-0.
How do DFDs connect to the flowchart on the test?
A DFD gives you the logical structure — the processes and data flows — which you then render, with the physical detail (people, documents, computer processes), as the systems flowchart the test asks for. Getting the DFD straight makes the flowchart faster to draw.
Exam move
Practise the decomposition ladder on a couple of processes: draw the context diagram (one bubble, external entities, net flows, no data stores), then Level-0 (numbered major processes plus data stores), then explode one process to Level-1. Every time, run the balancing check — the boundary flows must match across levels. Keep the logical/physical distinction sharp, because the systems flowchart you draw on the secure test is the logical DFD rendered with physical detail. Confirm on Canvas how much DFD notation your quarter expects versus straight flowcharting.
Working through Data Flow Diagrams in BUSACT 702? Sia is AskSia’s AI Accounting tutor — ask any BUSACT 702 Data Flow Diagrams question and get a clear, step-by-step explanation grounded in how BUSACT 702 is taught and assessed. Read this chapter free, then take your hardest questions to Sia.
