Chapter 1 and 2

Question 1

What is AIS?

Answer 1

structural, repeatable approach to collecting and storing relevant data about financial transactions AND processing and aggregating the data to create info. for users and decision makers

Question 2

AIS transactions must be effective and efficient (2)

Answer 2

internal control activities

efficient design

Question 3

internal control activities

Answer 3

ensure accurate and appropriate accounting records

Question 4

efficient design

Answer 4

reduces time and labor (cost) or enhance customer experience (revenue)

Question 5

business process

Answer 5

a set of related, coordinated, and structured activities and tasks that are performed by a person or computer, or machine and that helps accomplish a specific organizational goal

Question 6

Transaction processing

Answer 6

the process that begins with capturing transaction data and ends with informational output, such as financial statements

Question 7

accountant events

Answer 7

ship goods
receive goods
receive cash
pay employees

Question 8

ship goods

Answer 8

revenue

Question 9

receive goods

Answer 9

liability

Question 10

receive cash

Answer 10

reduce receivable

Question 11

pay employees

Answer 11

expense

Question 12

5 transaction cycles FERPH

Answer 12

1. financing cycle
2. expenditure cycle
3. revenue cycle
4. production or conversion cycle
5. human resources/payroll cycle

Question 13

revenue cycle

Answer 13

where goods and services are sold for cash or a future promise to receive cash

Question 14

expenditure cycle

Answer 14

companies purchase inventory for resale or raw materials to use in producing products in exchange for cash or a future promise to pay cash

Question 15

production or conversion cycle

Answer 15

where raw materials are transformed to finished goods

Question 16

human resourcing/payroll cycle

Answer 16

where employees are hired, trained, compensated, evaluated, promoted, and terminated

Question 17

financing cycle

Answer 17

where companies sell shares in the company to investors and borrow money and where investors are paid dividends and interest is paid on loans.

Question 18

general ledger and reporting system

Answer 18

used to generate for both management and external parties.

Question 19

6 components to AIS (IIDSPP)

Answer 19

1. information technology infrastructure
2. Internal controls and security measures
3. Data
4. software
5. People
6. Procedures and instructions

Question 20

3 important AIS business functions

Answer 20

1. collect and store data about organizational activities, resources, and personnel
2. Transform data into information so management can plan, execute, control, and evaluate activities, resources, and personnel
3. provide adequate controls to safeguard the organization’s assets and data

Question 21

data

Answer 21

facts about processes (events), resources or people (agents). Data is collected, processed and stored.

Question 22

information

Answer 22

data that is aggregated and organized to provide basis for decision making or general knowledge

Question 23

Characteristics of useful information RRUCAVT

Answer 23

1. relevant
2. reliable
3. understandable
4. complete
5. accessible
6. verifiable
7. timely

Question 24

How AIS can value to an organization

Answer 24

1. improving the quality and reducing the costs of products or services
2. improving efficiency
3. sharing knowledge
4. improving the efficiency and effectiveness of its supply chain
5. improving the internal control structure
6. improving decision making

Question 25

3 factors that influence the design of an AIS

Answer 25

1. developments in IT 2. business strategy 3. organizational culture

Question 26

Value Chains 5 primary activities that directly provide value to customers

Answer 26

1. inbound logistics 2. outbound logistics 3. operations 4. marketing and sales 5. Service

Question 27

Inbound logistics

Answer 27

consists of receiving, storing, and distributing the materials an organization uses to create the services and products it sells

Question 28

outbound logistics

Answer 28

activities distribute finished products or services to customers

Question 29

operations

Answer 29

activities transform inputs into final products

Question 30

Marketing and sales

Answer 30

activities help customers buy the organizations products and services (advertising).

Question 31

Service

Answer 31

activities provide post sale support to customers (repairs and maintenance services)

Question 32

4 supporting activities

Answer 32

``` allow primary activities to be performed efficiently and effectively: firm infrastructure human resources technology purchasing ```

Question 33

firm infrastructure

Answer 33

the accounting, financing, legal, and general admin. activities that allow an organization to function.

Question 34

human resources

Answer 34

recruiting, hiring, training, and compensating employees

Question 35

technology

Answer 35

activities improve a product or service

Question 36

purchasing

Answer 36

procure raw materials, supplies, machinery, and buildings used to carry out the primary activities

Question 37

Supply chain

Answer 37

``` RM supplier Manufacturer distributor retailer customer ```

Question 38

Data processing cycle

Answer 38

when operations performed on data to generate meaningful and relevant information are referred

Question 39

four steps of data processing

Answer 39

data input, data storage, data processing, information output

Question 40

Internal control

Answer 40

safeguards assets and ensures accurate and appropriate accounting records and financial statements: designed into transaction processes manual/automated balance cost vs. benefits (efficiency)

Question 41

Give get for revenue:

Answer 41

give product or service | get cash

Question 42

give get for expenditure

Answer 42

give cash | get product / service

Question 43

give get for HR/ payroll

Answer 43

give cash/ getlabor

Question 44

give get for production

Answer 44

give labor/material | get finished goods

Question 45

give get for financing

Answer 45

give cash | get cash

Question 46

most accounting is in....

Answer 46

transaction cycles

Question 47

for data input, data must be:

Answer 47

reliable relevant accurate timely

Question 48

source documents

Answer 48

forms and documents collect data for input. purchase order, check, invoice

Question 49

Turnaround document

Answer 49

sent to end user, who completes or adds data, then returns it. (bills, utility, credit card.

Question 50

Source data automation

Answer 50

devices that capture transaction data (atms, point of sale registers, bar code scanners)

Question 51

data storage in manuel

Answer 51

in ledgers and journals

Question 52

data storage in automated

Answer 52

in files and databases

Question 53

general ledger

Answer 53

contains summary level data for every asset, liability, equity, revenue, and expense account

Question 54

subsidiary ledger

Answer 54

detailed data for any general ledger account with many individual subaccounts

Question 55

coding

Answer 55

systematic assignment of numbers or letters to items to classify and organize them

Question 56

sequence codes

Answer 56

items numbered consecutively to account for all items

Question 57

block code

Answer 57

blocks of numbers are reserved for specific categories of data

Question 58

group codes

Answer 58

two or more subgroups of digits use to code items are often used in conjunction with block codes

Question 59

mnemonic codes

Answer 59

letters and numbers are interspersed to identify an item

Question 60

AIS use of coding:

Answer 60

organization structure, legal entity structure geographic locations inventory types, location, use customer location, type

Question 61

benefits of charto f accounts

Answer 61

helps users choose correct attributes and easier to create information from data

Question 62

General ledger

Answer 62

stores all transactions, entire chart of accounts. (manual)

Question 63

subsidiary ledgers

Answer 63

account details. customer receivables, vendor payables, fixed assets. Sum of individual details equals GL account total (control account)

Question 64

Journals

Answer 64

record individual accounting entries

Question 65

general journal

Answer 65

is for infrequent or non routine transactions

Question 66

Specialized journals

Answer 66

records large numbers of repetitive transactions such as sales, cash receipts, and cash disbursements

Question 67

Automated storage

Answer 67

will address in detail with database modeling, data stored in files, files are combined into databases.

Question 68

Entity

Answer 68

something about which data is stored such as employees, inventory items, and customers. (resources, activities, people)

Question 69

Attributes

Answer 69

characteristic of the entity. the data for each attribute are stored in fields

Question 70

Records

Answer 70

individual items, people or activities | entity = students; record = on student

Question 71

Master File

Answer 71

stores cumulative information about an organization. changes infrequently (similar to ledgers) stores data about resources and peoplle

Question 72

Transaction file

Answer 72

contains records of individual's business transactions that occur during a specific time (similar to a journal) stores data about activities

Question 73

Data Processing

Answer 73

transforms the stored data

Question 74

CRUD

Answer 74

Create - new record or data value Read - view only, no changes Update - change an existing data Delete - remove record

Question 75

Audit Trail

Answer 75

a traceable path of transaction through a data processing system form point of origin to final output, or backwards.

Question 76

Batch processing

Answer 76

collect data for defined time period, then process (payroll on friday nights)

Question 77

Real-time Processing

Answer 77

processes each new data input as received (stock brokerage account)

Question 78

online batch processing

Answer 78

combines batch processing and rel time processing

Question 79

best practice for data processing

Answer 79

real-time processing

Question 80

Information outputs

Answer 80

reports documents queries

Question 81

reports

Answer 81

standard formats used repeatedly (monthly income statement)

Question 82

documents

Answer 82

printed forms resemble manual system (purchase orders or invoices)

Question 83

queries

Answer 83

ad hoc searches of databases (create custom reports, results to excel or another tool)

Question 84

ERP - Enterprise resource planning

Answer 84

systems originally developed for functions/departments Integrate all aspects of a company's operations with traditional AIS One operating system, one application software, one database, common hardware