Flashcards in Chapter 1 (The Information System) Deck (51)
supports operations level tasks with highly detailed information about the business transactions that have occurred (sale, shipment of goods, use of labor and material, and transfer of resources)
horizontal flow of information
information down from senior management to through to operations and back up from operations to senior management
product-oriented work of the business (manufacturing, sales, distribution, billing)
controlling day to day operations
short term planning and coordination of activities
longer term planning and setting organizational objectives
Three fundamental objectives common to all organizations are:
1. support stewardship function of management
2. support management decision making
3. support day by day operations
manager's responsibility to properly manage the resources of the firm and to report on their activities
set of formal procedures by which data is collected, stored and processing into information & distributed to users
___ processes non-financial transactions that are not normally part of the ___:
- capital budgeting
- product analysis
- delivery scheduling
- employee benefits
The ___ accepts inputs known as ___ that are processed and turned into ___.
IS; transactions; information
an event that affects or is of interest to the organization and is processed by its information system as a unit of work.
economic events that effect the assets and equities of the organization is reflected in its accounts and is measured in monetary terms
- paying for products
- paying for service
- buy inventory
- all have debits and credits
- purchase of an airline ticket
- sale of a textbook
- wanting your new name on your diploma
- changing address
- adding a new customer
- changing a customer's address
all other events processed by the organization's information system
subsystem of the IS that processes financial transactions and non financial transactions that directly effect the processing of financial transactions
What are the three subsystems of the AIS:
1. transactions processing Subsystem
2. general ledger/financial reporting subsystem
3. management reporting system
supports daily business operations
Converts economic events into financial transactions, records financial transactions in the accounting records and distributed essential financial information to operations personnel to support daily activity.
Revenue cycle, expenditure cycle, and conversion cycle
transactions processing Subsystem
creation of the traditional financial statements
Input into the GL/FRS system is from the transaction system
Summarizes transactions and accounts for non-frequent transactions
FRS generates the output financial statements
FRS focuses on non-discretionary reporting due to the fact that the format and information is generally defined by GAAP, IRS, etc.
general ledger/financial reporting subsystem
special purpose reports used to make decisions
Aids in the decision making of management
Budgets, variance analysis, cost reports, trends, etc.
management reporting system
- Focus on financial reporting information
- Focus on processes and procedures that impact financial reports and information
- Controls around AIS
- may or may not be processed
- have no direct effect on user's actions
causes the user to take actions
financial transactions that enter the information system from internal and external sources.
the most common source of data for most organizations.
external financial transactions
involve the exchange or movement of resources within the organization.
internal financial transactions
sale of goods and services, purchase of inventory, receipt of cash, and disbursement of cash (including payroll)
movement of raw materials into work-in-process (WIP), application of labor and overhead to WIP, transfer of WIP into finished goods inventory, and depreciation of equipment