Key Concepts in Accounting Information Systems

What is it called when a subsystem achieves its goal while contributing to the organization's overall goal?

Goal congruence

What activities constitute inbound logistics?

Receiving, storing, and distributing the materials used as inputs by the organization to create goods and/or services.

How is information best described?

Data that has been organized and processed so that it is meaningful to the user.

What characteristic of information is represented when it is free from error or bias and accurately represents events or activities?

Accurate.

What pieces of information are typically needed to hire and train employees?

Job description.

In which transaction cycle would information for paying dividends most likely pass between internal and external accounting information systems?

The financing cycle.

What occurs when a subsystem's goals are inconsistent with the goals of another subsystem or the system as a whole?

Goal conflict.

Which party is not external to the firm?

CEO.

In the context of Clementa Santiago's business, what function in the value chain is Joe performing?

Service.

Which party is not internal to the firm?

Customer.

In which transaction cycle would information from inventory purchases most likely pass between internal and external accounting information systems?

The expenditure cycle.

What is not considered a transaction cycle?

General ledger and reporting cycle.

What do the activities that help to provide post-sale support to customers represent in the value chain?

Service.

What do the activities that help customers buy the organization's products or services represent in the value chain?

Marketing and sales.

What tasks must an accounting information system be able to perform?

Collect transaction data, provide adequate controls, and process transaction data.

In Clementa Santiago's business, what function in the value chain is Jane performing?

Inbound logistics.

What do the activities that help transform inputs into final products or services represent in the value chain?

Operations.

What does the bi-directional arrow between organizational culture and AIS in Figure 1-5 represent?

The organization's culture influences the AIS, and likewise, the AIS influences the organization's culture by controlling the flow of information.

1. Inventory information for Sun Corp. is provided in real time by a firm's accounting information system. However, the accuracy of this information is questionable. Many store managers often report stocks out of components that the system indicates are in stock. Which of the following characteristics of useful information is absent in the situation described above

Reliable

What characteristic of useful information is absent when store managers report stocks out of components that the system indicates are in stock?

Reliable

What characteristic of useful information is lacking when employees cannot get all the information they need from the new system?

Complete

How is the value of information determined?

By the benefits associated with obtaining the information minus the cost of producing it.

What does it mean for information to be accurate?

It is free from error or bias and accurately represents the events or activities of the organization.

In which transaction cycle would customer sales transaction information most likely pass between internal and external accounting information systems?

The revenue cycle.

What function in the value chain is performed by Mary, who manages the carving process?

Operations.

What does arranging delivery of products to customers represent in value chain analysis?

Outbound logistics.

Which activity is not a common activity in an Accounting Information System (AIS)?

Record sales calls for marketing purposes.

Wisconsin Dells, Wisconsin, is a popular tourist destination. During the winter months, the population dwindles to a meager few, but when summer comes, the size of the town surges. Hunter Jackson is the town sanitation engineer. When the size of the town surges, so do his responsibilities. Among them is management of the sewage processing volume. In an interview with the local paper, Hunter complained that a report on tourist population that he uses to adjust processing volume refers to data that was not always accurate and it is really giving him a hard time to make adjustments. Which of the following characteristics of useful information is absent in the situation described above?What characteristic of useful information is absent when Hunter Jackson complains about inaccurate reports on tourist population?

Reliable.

What issue does Hunter Jackson face regarding the data he uses for sewage processing volume adjustments?

The data was collected four days ago, and it takes him a week to make adjustments.

Wisconsin Dells, Wisconsin, is a popular tourist destination. During the winter months, the population dwindles to a meager few, but when summer comes, the size of the town surges. Hunter Jackson is the town sanitation engineer. When the size of the town surges, so do his responsibilities. Among them is management of the sewage processing volume. In an interview with the local paper, Hunter complained that a report on tourist population that he uses to adjust processing volume refers to data that was collected four days ago and it takes him a week to make adjustments.

What characteristic of useful information is absent in the described situation?

Timeliness

What must data be converted into to be considered useful for decision making?

Information

What characteristic of information helps reduce uncertainty and improves decision making?

Relevance

What is created when a subsystem's goals are inconsistent with another subsystem's goals?

Goal conflict

Who would not be involved in the expenditure cycle?

Cashier

What is a primary activity in the value chain?

Marketing and sales

What is not a common activity in an AIS?

Record sales calls for marketing purposes

What does an AIS that increases information accessibility likely increase pressure for?

Centralization and defined procedures

When is information considered verifiable?

When two knowledgeable people independently produce the same information.

Updating accounts receivable is part of which cycle?

Revenue cycle

In which transaction cycle would employee benefits information pass between internal and external systems?

Human resource/payroll cycle

What is the primary objective of accounting?

To provide useful information to decision makers.

What type of accounting record is used for making payments to a vendor with an established credit line?

Cash disbursements journal; expenditure cycle.

What three facets of each business activity must data be collected about?

The business activity, the resources it affects, and the people who participate.

What are the four parts of the transaction processing cycle?

Data input, data storage, data processing, information output.

What is true about online batch processing?

It is a combination of real-time and batch processing.

What coding technique is most likely used for sales orders?

Sequence code.

Where would changing a customer's credit limit be recorded?

Customer master file.

What is assumed when the sum of all entities in the subsidiary ledger equals the general ledger account balance?

The recording processes were accurate.

What type of information does the quality assurance department enter into the AIS?

Internal non-financial information.

What module in an ERP system is used to record marketing data?

Customer relationship management.

What might an ERP system not facilitate in the purchase of direct materials?

Selecting the best supplier by comparing bids.

What is not considered a source document?

A copy of the company's financial statements.

How would a delivery of inventory from a vendor be recorded in a retail business?

Purchases journal; expenditure cycle.

What process does Pacific Power use to manage customer billing?

Mails bills to households and processes payments as they are received.

What is the best way for a business to ensure that payment data entry is efficient and accurate?

Using turnaround documents.

What file is updated when an employee's hourly pay changes?

The employee master file.

What is true about master files?

Individual master file records may change frequently.

What is a chart of accounts an example of?

Block codes or group codes.

What module in an ERP system records data about transactions in the revenue cycle?

Order to cash.

What is a common reason for ERP implementation failure?

ERP's may require procedures and reports to be standardized across business units.

What does an ERP system not facilitate in purchasing direct materials?

Selecting the best supplier by comparing bids.

What is a typical source document?

Both a paper document and a computer data entry screen.

What are common source documents for the revenue cycle?

Receiving report.

What is the final step in the data processing cycle?

Output.

In transaction processing, which activity generally comes first?

Capturing data on source documents.

What is a false statement regarding effective coding practices?

Codes should be customized for each division of an organization.

What might Catalina Boards use to keep cumulative information about the company?

A master file.

How can the efficiency of recording numerous business transactions be improved?

By using specialized journals.

What is a false statement regarding AIS?

Traditionally, most AIS have been designed so that both financial and operational data are stored in a manner that facilitates their integration in reports.

What module in an ERP system records data about transactions in the production cycle?

Manufacturing.

Which of the following is not an ERP vendor?

Dell.

What cycle includes John Pablo's responsibilities in accounts payable?

The expenditure cycle.

Which transaction cycle involves the collection of customer payments?

The revenue cycle.

What transaction cycle includes issuing a purchase order?

The expenditure cycle.

What type of journal would be used to record monthly depreciation entries?

A general journal.

What must the chart of accounts contain to be effective?

Sufficient detail.

What is an example of an ERP system?

Charlie keeps records of all his business records in a shoe box and enters data into spreadsheets.

How is a delivery of inventory from a vendor recorded initially?

In the purchases journal as part of the expenditure cycle.

What cycle includes the collection of employee time sheets?

The human resources cycle.

What is the most frequent revenue transaction?

Sale to customer.

What is the best way for a t-shirt seller at an event to ensure sales data entry is efficient and accurate?

Using a systematic data entry process.

What is Antia Carmie's business known for?

Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area.

How does Antia Carmie enhance customer service?

Antia uses computer technology to provide superior customer service.

1. Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area Antia uses computer technology to provide superior customer service. The store’s database system was designed to make detailed information about each Japanese fan easily accessible to her customers. Accordingly, the fan price and condition are provided for each fan, along with many pictures of each fan. In Antia’s database, the Japanese fans (as a whole) represent a(n)

In Antia's database, what do Japanese fans represent?

Entity

What is conceptually similar to a journal in a manual AIS?

Transaction file

What is referred to as hard copy in data output?

When printed on paper.

What is one advantage of an ERP system?

An ERP provides an integrated view of the organization's data.

How do ERP vendors simplify configuration for customers?

They develop built-in configuration tools to address most of their customers' needs for system changes.

Which step is not part of the data processing cycle?

Feedback from external sources.

What is the first step in the data processing cycle?

Input.

What does data processing include?

All activities except verifying subsidiary ledger balances.

What is a false statement about a master file?

A master file's individual records are rarely, if ever, changed.

What type of transactions would a specialized journal most likely be used for?

Sales transactions.

In Antia's database, what does the price of the Japanese fans represent?

Attribute.

What is not true about program flowcharts?

Program flowcharts are a high-level overview of all business processes.

Which symbol represents a connection to another part of the flowchart on a different page?

Symbol #15.

Which symbol represents the flow of data or documents in a flowchart?

Symbol #12.

Which symbol represents mentally prepared control totals in a flowchart?

Symbol #4.

What type of flowchart should Carly Jackson ask for?

Program flowchart.

How are graphical representations of information often supplemented?

By narrative descriptions.