AIS Chapter 2 Flashcards
Data Processing Cycle
The operations performed on data to generate meaningful and relevant information
1) Capture transaction data and enter them into the system
2) Make sure captured data are accurate and complete
3) Make sure company policies are followed, such as approving or verifying a transaction
Data must be collected about 3 facets of each business activity. They are:
1) Each activity of interest
2) The resource(s) affected by each activity
3) The people who participate in each activity
Turnaround documents
Company output sent to an external party, who often adds data to the document, and then are returned to the company as an input document
Source data automation devices
capture transaction data in machine-readable form at the time and place of their origin
General Ledger
Contains summary-level data for every asset, liability, equity, revenue, and expense account
Subsidiary ledger
contains detailed data for any general ledger account with many individual subaccounts
Control Account
the general ledger account corresponding to a subsidiary ledger
Coding
the systematic assignment of numbers of letters to items to classify and organize them
sequence codes
items are numbered consecutively to account for all items
block code
blocks of numbers are reserved for specific categories of data
group codes
which are two or more subgroups of digits used to code items, are often used in conjunction with block codes
mnemonic codes
letters and numbers are interspersed to identify an item
Guidelines for a better coding system
1) Be consistent with its intended use
2) Allow for growth
3) Be as simple as possible to minimize costs, facilitate memorization and interpretation and ensure employee acceptance
4) Be consistent with the company’s organizational structure and across the company’s divisions
Chart of Accounts
List of the numbers assigned to each general ledger account
General Journal
Used to record infrequent or nonroutine transactions
