Chapter two

What are the 4 major steps of the data processing cycle?

Data input → Data processing/storage → Information output

What data must be collected about every business activity?

Each activity of interest, the resources used, and the people involved

What are source documents used for?

to collect data about their business activities and/or support the validity of the business activities.

What is a general ledger?

contains summary-level data for every asset, liability, equity, revenue, and expense account of the organization.

What is a subsidiary ledger?

records all the detailed data for any general ledger account that has many individual subaccounts.(Ex: A/R)

What is sequence coding?

items are numbered consecutively to ensure that there will be no gaps in the sequence

What is block coding?

Blocks of numbers within a numerical sequence are reserved for categories

having meaning to the user. (Ex: 1000-1999 means its a fridge)

What is group coding?

The spot within the code tells you what type it is (Ex: 3rd would tell you the color)

What is mnemonic coding?

are letters and numbers used in a combination to identify an item. The code is derived from the description

What type of information is stored in a master file?

Statice information

What type of information is stored in a transactional file?

Individual business activities

What is a general journal used for?

to record infrequent or nonroutine transactions

What is a specialized journal used for?

to record large numbers of repetitive transactions.

What is a chart of accounts?

a list of all general ledger accounts an organization uses with each general ledger account being assigned a specific number

What are the four types of file processing?

Creating, Reading, Updating, and Deleting (CRUD)

What is batch processing?

Periodic updating of data

What is an ERP System?

Enterprise resource planning systems are designed to overcome problems as they integrate all aspects of a company’s operations with its traditional AIS.