accounting information systems unit 2 done

The primary input to the transaction processing system is

a financial transaction

The major difference between the financial reporting system (FRS) and the management reporting system (MRS) is the

FRS provides information to external users; the MRS provides information to internal users.

The author distinguishes between the accounting information system and the management information system based on

whether the transactions are financial or nonfinancial that directly affect the processing of financial transactions.

An example of a financial transaction is

the purchase of computer.

An example of a nonfinancial transaction is

log of customer calls.

The transaction processing system includes which of the following?

the conversion cycle

The goal of data processing is

the production of useful information.

Which of the following is an external end user?

tax authorities

An appraisal function housed within the organization that performs a wide range of services for management is

internal auditing.

What factor conceptually distinguishes external auditing and internal auditing?

constituencies

Which system is part of the expenditure cycle?

cash disbursements

Both the revenue and the expenditure cycle can be viewed as having two key parts. These key parts are

physical and financial.

System flowcharts do which one of the following?

represent relationships between key elements of both manual and computer systems

Which symbol is used to represent a data source or destination of documents and reports in a system flowchart?

oval

Which accounting application is least suited to batch processing?

sales order processing

 In contrast to a real-time system, in a batch processing system

there is a lag between the time when the economic event occurs, and the financial records are updated.

In contrast to a batch processing system, in a real-time system

processing takes place when the economic event occurs.

The coding scheme most appropriate for a chart of accounts is

block code

When a firm wants its coding system to convey meaning without reference to any other document, it would choose

a mnemonic code

The most important advantage of sequential coding is that

missing or unrecorded documents can be identified.

Li has implemented a new accounting information system (AIS) to help him manage his construction company. Li uses the information captured by the system to plan each project, forecasting the requirements for raw materials and the cash flow expected.

Which AIS subsystem helps Li in planning?

Management reporting system (MRS)

Which information does the management reporting system (MRS) provide?

variance reports

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization.

What happens if the information is untimely?

The decision maker wastes resources analyzing outdated information.

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization.

What happens if the information is inaccurate?

The decision maker receives materially wrong information.

Which important information does external feedback about the level of uncollected customer accounts indicate to the management information system?

The organization needs to review its credit-granting policies.

What is a type of data source for the accounting information system (AIS)?

Raw material is moved into work-in-process.

Why would an organization decide to develop its own custom information system?

It has unique information needs.

An objective of internal control is to mitigate the risk from errors and fraud.

What is the primary risk associated with revenue cycle transactions?

Inaccurately recording sales and cash receipt transactions in journals and accounts

What does the letter N in an inverted triangle mean in a system flowchart?

It is a temporary file using a numeric filing system.

Which digital computer file contains account data that are updated by transactions and includes the general ledger and subsidiary ledgers?

master file

How would shipping logs be depicted in a system flowchart?

parallelogram symbol

What is the circular symbol labeled A in the system flowchart?

This is an on-page connector used to replace flow lines that otherwise would cause excessive clutter on the page.

What is an advantage of sequential codes?

Sequential coding supports the reconciliation of a batch of transactions at the end of processing.

Why is there no lag time with real-time systems?

Real-time systems process transactions individually when the events occur.

What does efficiency mean in the data collection process?

Collecting data only once

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization.

What happens if the information is incomplete?

The decision maker does not have enough information in order to act.

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization.

What happens if the information lacks summarization?

The decision maker is overwhelmed by the amount of detail in the information.

An office manager receives the following marketing fax from a current supplier: "Our company is having a promotion this month for all our main products. Please call for more information."

Which characteristic of useful information is missing from this scenario?

complete

Why are accountants involved in the information system development team?

They are the domain experts, determining the nature of the information required, its source, its destination, and the rules that need to be applied.

What is the main difference between centralized data processing (CDP) and distributed data processing (DDP)?

CDP uses a common data center for all the processing needs of the organization; in DDP, every department has its own processing capabilities.

Sara has started a very successful online company selling custom-made jewelry. One of her competitive advantages is a state-of-the-art information system that promotes visibility within the supply chain.

Which one of the information system's subsystems helps Sara manage the customer orders she receives?

Transaction processing system (TPS)

A system flowchart is a graphical representation of the physical relationships among key elements of a system.

What do these elements include?

Organizational departments

What does the letter C in an inverted triangle mean in a system flowchart?

It is a temporary file using a chronological filing system.

Which digital computer file contains account data that are updated by transactions and includes the general ledger and subsidiary ledgers?

master file

 How would shipping logs be depicted in a system flowchart?

Parallelogram symbol

In a system flowchart, how would a clerk’s tasks of entering sales orders be depicted?

Bucket-shaped symbol

What is an advantage of sequential codes?

Sequential coding supports the reconciliation of a batch of transactions at the end of processing.

It is a standard and a necessity to maintain the master file integrity of an organization so that if the current master files become corrupt, destroyed, or plagued with errors, the organization has a recourse.

What should the organization have in place in case of such an event?

Master file backup