ACCT 307 MT1 WEI JIANG

What is an Accounting Information System (AIS)?

A system that collects, records, stores, and processes data to produce useful information for decision makers.

What are the three major components of an AIS?

Input, processing, and output.

What is data?

Raw and unprocessed transaction facts, such as individual sales orders.

What is information?

Processed data that is useful for decision-making, such as management reports or financial statements.

What is the main difference between data and information?

Data is raw and unprocessed; information has been processed and organized to make it useful.

Why do accountants study AIS?

To understand where accounting information comes from, understand business processes, design systems, and evaluate internal controls.

What is a source document?

A paper or electronic document that initially captures data about a business transaction.

What is source data automation?

Capturing transaction data directly in machine-readable form to improve accuracy and efficiency, such as barcodes or POS systems.

What is a journal?

A chronological record of transactions.

What is the purpose of a special journal?

To simplify the recording of large numbers of repetitive transactions.

What are the four common special journals?

Sales, purchases, cash receipts, and cash disbursements journals.

What types of transactions are normally recorded in the general journal?

Non-routine transactions, adjusting entries, and summaries of routine transactions.

What is a general ledger?

A collection of accounts that records beginning balances, increases, decreases, and ending balances for assets, liabilities, revenues, expenses, and other accounts.

What is a subsidiary ledger?

A ledger containing detailed individual records that support a particular general ledger account.

What is a control account?

A general ledger account whose balance should equal the total of the related subsidiary ledger accounts.

What relationship should exist between a subsidiary ledger and its control account?

The sum of all subsidiary account balances should equal the balance of the general ledger control account.

What are the three end-of-period trial balances?

Pre-adjusting trial balance, adjusted trial balance, and post-closing trial balance.

When is a pre-adjusting trial balance prepared?

After entries have been posted but before adjusting entries are recorded.

When is an adjusted trial balance prepared?

After adjusting entries have been recorded and posted.

When is a post-closing trial balance prepared?

After closing entries have been recorded and posted.

What are the four coding systems covered in class?

Sequence codes, block codes, group codes, and mnemonic codes.

What is a sequence code?

A coding system in which items are numbered consecutively so missing or duplicate numbers can be detected.

Give examples of items commonly assigned sequence codes.

Checks, invoices, and purchase orders.

What is a block code?

A coding system in which different numerical ranges are reserved for different categories.

What is a group code?

A coding system in which each digit or group of digits represents a different characteristic of the item being coded.

Which coding scheme is commonly used to design a chart of accounts?

Group coding.

What is a mnemonic code?

A code using letters or abbreviations that provide a visible clue about what the item represents.

What is a business process?

A collection of activities performed by an organization that creates value.

What are the two major business processes emphasized in this course?

The sales or revenue cycle and the purchasing or expenditure cycle.

What is a document flowchart?

A graphical representation that traces the physical flow of documents through an organization.

What should the columns in a document flowchart represent?

The departments, individuals, or organizational groups involved in the process.

Where should department names appear on a document flowchart?

In the column headings.

What does a keying-operation symbol represent?

Manually entering data into a computerized system.

What does a filing symbol in a document flowchart represent?

A physical document being stored or filed.

What do A, N, and D mean next to a manual file symbol?

A means alphabetically, N means numerically, and D means chronologically.

What rule should be followed when using connectors in a flowchart?

Matching connectors should use the same letter or number.

What is a system flowchart?

A flowchart showing the electronic flow of data and the relationships among inputs, computer processing, storage, and outputs.

What is the sandwich rule in system flowcharting?

A processing symbol should appear between an input and an output.

In a system flowchart, what does an arrow from a process into a data store mean?

The process updates or writes information to the data store.

In a system flowchart, what does an arrow from a data store toward a process mean?

The process accesses, reads, or retrieves information from the data store.

What are the four basic elements of a logical data flow diagram (DFD)?

Data source or destination, process, data store, and data flow.

What does a rectangle represent in a logical DFD?

An external data source or data destination.

What does a circle or bubble represent in a logical DFD?

A process or task performed by the system.

What do two horizontal lines represent in a logical DFD?

A data store or file.

What does an arrow represent in a logical DFD?

The direction of data flow.

What is a context diagram?

The highest-level DFD that provides an overall picture of the entire system.

What is decomposition in a DFD?

Breaking a high-level process into increasingly detailed lower-level processes.

What is the correct sequence of the revenue cycle?

Take the customer order, ship the goods or services, and collect payment.

After checking a customer's credit for a credit sale, what should be checked next before approving the order?

Inventory availability.

What is EDI?

Electronic Data Interchange; the computer-to-computer exchange of business documents in standardized formats.