EXAM 1 STUDY GUIDE - AIS

System

A set of detailed methods, procedures, and routines that carry out specific activities, perform a duty, achieve goals or objectives, or solve problems.

Goal conflict

Occurs when a subsystem’s goals are inconsistent with the goals of another subsystem or the system as a whole.

Goal congruence

Achieved when a subsystem achieves its goals while contributing to the organization’s overall goal.

Data

Facts collected, recorded, and stored in a system.

Information

Data that have been organized and processed to provide meaning and context which can improve the decision-making process.

Information Overload

When too much information impairs decision-making quality.

Value of Information

The benefits exceed the costs of gathering, maintaining, and storing the data.

Machine-readable

Data is most useful when it is in a __ format that can be read and processed by a computer.

XBRL

eXtensible Business Reporting Language - a taxonomy that structures business information for communication between business systems.

Business Process

A set of related, coordinated, and structured activities and tasks performed by people, machines, or both to achieve a specific organizational goal.

Business Transaction

An agreement between two entities to exchange goods, services, or any other event that can be measured in economic terms by an organization.

Transaction Processing

Transaction data is used to create financial statements and is called

Revenue Cycle

Give goods / give service - get cash.

Expenditure Cycle

Get goods / get service - give cash.

Production Cycle

Give labor and give raw materials - get finished goods.

Human Resources/Payroll Cycle

Give cash - get labor.

Financing Cycle

Give cash - get cash

Accounting Information System (AIS)

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

Artificial Intelligence (AI)

The use of computer systems to simulate human intelligence processes such as learning, reasoning, and self-improvement.

Data Analytics

The use of software and algorithms to find and solve problems and improve business performance.

Blockchain

Individual digital records, called blocks, linked together using cryptography in a single list, called a chain.

Cloud Computing

The use of a browser to remotely access software, data storage, hardware, and applications.

Virtualization

Running multiple systems simultaneously on one physical computer.

Internet of Things (IoT)

Embedding of sensors in a multitude of devices so that those devices can connect to the Internet.

Value Chain

Links together the different activities within an organization that provide value to the customer.

Primary Activities

Provide direct value to the customer.

Support Activities

Enable primary activities to be efficient and effective.

Supply Chain

An extended system that includes the organization’s value chain as well as its suppliers, distributors, and customers.

attributes

the properties, identifying numbers, and characteristics of interest of an entity stored in a database. examples are employee number, pay rate, name, and address

audit trail

a path that allows a transaction to be traced through a data processing system from point of origin to output or backwards from output to point of origin. it is used to check the accuracy and validity of ledger postings and to trace changes in gl accounts from their beginning balance to their ending balance.

batch processing

accumulating transaction records into groups or batches for processing at a regular interval such as daily or weekly. the records are usually sorted into some sequence (such as numerically or alphabetically) before processing

block code

blocks of numbers reserved for specific categories of data, thereby helping to organize the data. an example is a chart of accounts.

chart of accounts

a listing of all the numbers assigned to balance sheet and income statement accounts. the numbers allow transaction data to be coded, classified, and entered into the proper accounts. they also facilitate financial statement and report preparation.

coding

the systematic assignment of numbers or letters to items to classify and/or organize them. writing program instructions that direct a computer to perform specific data processing tasks

control account

a title given to a gl account that summarizes the total amounts recorded in a subsidiary ledger. for example, the accounts receivable ______ in the gl represents the total amount owned by all customers. the balances in the account receivable subsidiary ledger indicate the amount owed by each specific customer.

data base

a set of interrelated, centrally controlled data files stored with as little data redundancy as possible. a database consolidates records previously stored in separate files into a common pool and serves a variety of users' data processing applications

data processing cycle

the four operations (data input, data storage, data processing, and information output) performed on data to generate meaningful and relevant information.

data value

the actual value stored in a field. it describes a particular attribute of an entity. for example, the customer name field would contain “zyx company” if that company were a customer.

document

records of transactions or other company data. examples include checks, invoices, receiving reports, and purchase requisitions.

enterprise resource planning systems

help integrate all aspects of an organization's activities—such as accounting, finance, manufacturing, human resources, and marketing—into one management information system and is modularized; companies can purchase only certain modules (such as finance or human resources) or an entire system. it is adverse among the company's various business functions and manages communications with outside stakeholders.

field

the portion of a data record where the data value for a particular attribute is stored. for example, in a spreadsheet, each cell might represent a customer, and each column an attribute of the customer. each cell in a spreadsheet is a field.

file

a set of logically related records, such as the payroll records of all employees.

general journal

a special journal to record infrequent or nonroutine transactions, such as loan payments and end-of-period adjusting and closing entries.

general ledger

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

group codes

two or more subgroups of digits used to code an item. a group code is often used in conjunction with a block code.

master file

a permanent file of records that stores cumulative data about an organization. as transactions take place, individual records within a master file are updated to keep them current.

mnemonic codes

letters and numbers interspersed to identify an item. is derived from the description of the item and is usually easy to memorize. for example, dry 300w could represent a dryer (dry), model number 300, that is white (w).

query

a request for the database to provide the information needed to deal with a problem or answer a question. the information is retrieved, displayed or printed, and/or analyzed as requested.

real-time processing

the computer system processes data immediately after capture and provides updated information to users on a timely basis.

record

a set of fields whose data values describe specific attributes of an entity, such as all payroll data relating to a single employee. an example is a row in a spreadsheet.

reports

system output organized in a meaningful fashion used by employees to control operational activities, by managers to make decisions and design strategies, and by investors and creditors to understand a company's business activities.

sequence codes

items are numbered consecutively so that gaps in it indicate missing items that should be investigated. examples include prenumbered checks, invoices, and purchase orders.

smart contract

a regular contract with the terms and agreed-upon details built into the blockchain. the organization using the blockchain establishes the rules that govern the blockchain's interaction with users. an organization can automate the execution of a smart contract based on external triggers.

source data automation

the collection of transaction data in machine-readable form at the time and place of origin. examples are point-of-sale terminals and atms.

source documents

documents used to capture transaction data as a source - when the transaction takes place. examples include sales orders, purchase orders, and employee timecards.

specialized journal

a journal used to record a large number of repetitive transactions such as credit sales, cash receipts, purchases, and cash disbursements.

subsidiary ledger

a ledger that records detailed data for a general ledger account with many individual subaccounts, such as accounts receivable, inventory, and accounts payable.

transaction file

a file that contains the individual business transactions that occur during a specific fiscal period. a transaction file is conceptually similar to a journal in a manual ais.

turnaround documents

records of company data sent to an external party and then returned to the system as input. turnaround documents are in machine-readable form to facilitate their subsequent processing as input records. an example is a utility bill.

Business Process Diagram (BPD)

visually represents the sequence of activities within a business process. It offers an easily understandable pictorial view of how a business process functions from start to finish.

Context Diagram

highest-level Data Flow Diagram (DFD). It provides a summary-level overview of a system, illustrating the system's boundaries, its inputs and outputs, and their respective sources and destinations.

Data Destination

an external entity or system that receives data produced by a system. It represents where the processed data ultimately ends up.

Data Flow

represents the movement of data between various components within a system, including processes, data stores, data sources, and data destinations. It illustrates how data travels through the system.

Data Flow Diagram (DFD)

a graphical representation of the flow of data within an organization. It includes data sources, data destinations, data flows, transformation processes, and data storage, providing a comprehensive view of how data is managed.

Data Source

an entity or location that provides the data used by a system. It represents where data originates before entering the system for processing.

Data Store

a repository or storage location where system data is held. It represents where data is stored within the system for later use or retrieval.

Documentation

narratives, flowcharts, diagrams, and other written materials that explain the workings of a system. It provides a comprehensive record of the system's design, functionality, and operation.

Document Flowcharts

illustrate the flow of documents and data among areas of responsibility within an organization. They trace documents from their origin to their final disposition, showing each step in their handling and processing.

Flowchart

an analytical technique that uses a standard set of symbols to pictorially describe aspects of an Information System (IS) in a clear, concise, and logical manner. It records how business processes are performed and how documents flow through an organization.

Internal Control Flowchart

used to describe, analyze, and evaluate internal controls within an organization. It helps identify system strengths, weaknesses, and inefficiencies in the control environment.

Narrative Description

a written, step-by-step explanation of system components and how they interact. It provides a detailed textual overview of the system's functionality and processes.

Processes

actions that transform data into other data or information. They represent the functional activities performed within a system to manipulate and convert data.

Program Flowchart

illustrates the sequence of logical operations performed by a computer in executing a program. It describes the specific logic to perform a process that is shown on a system flowchart.

System Flowchart

depicts the relationships among system input, processing, storage, and output. It provides a high-level overview of how data moves through the entire system.

SKIRT/BEGIN

The start or beginning of a process is represented by

a small circle.

END

An activity in process

_________ is represented by a rounded-

edge rectangle. An explanation of the activity is

placed inside the rectangle

DECISION

represented by a diamond

Flow

ANNOTATION

Information that helps explain a business process is

entered in the BPD and, if needed, a bolded dashed

arrow is drawn from the explanation to the symbol.

Document

An electronic or paper document or report

Multiple copies of one paper document

Illustrated by overlapping the document

symbol and printing the document number

on the face of the document in the upper

right corner

ELECTRONIC OUTPUT

Information displayed by _____ device such as a terminal, monitor,

or screen

Electronic Data Entry

ELECTRONIC INPUT AND OUTPUT DEVICE

The electronic data entry and output

symbols are used together to show a

device used for both

COMPUTER PROCESSING

A _______ function; usually

results in a change in data or information

Manual Operation

Database

Data stored electronically in o database

Magnetic Tape

PAPER DOCUMENT FILE

JOURNAL/LEDGER

Paper-based accounting journals and ledgers

Document for Processing Flow

Direction of processing or document flow; normal flow is

down and to the right

COMMUNICATION LINK

Transmission of data from one geographic location to

another via communication lines

ON PAGE CONNECTOR

Connects the processing flow on the same page; its

usage avoids lines crisscrossing a page

OFF PAGE CONNECTOR

An entry from, or an exit to, another page

TERMINAL

A beginning, end, or point of interruption in a process;

also used to indicate an external party

DECISION

Annotation - flow and miscellaneous

Addition of descriptive comments or explanatory notes as clarification

Data Sources and Destinations

DATA FLOW