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Accounting Information Systems > CH2: FOUNDATIONAL CONCEPTS OF AIS > Flashcards

CH2: FOUNDATIONAL CONCEPTS OF AIS Flashcards

1
Q

Accounting information system

A

captures, records, & reports accounting info

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2
Q

business process

A

sequence of steps to get a desired result for the organization; initiated by an event

Examples: collect cash, hire employees, sell, produce

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3
Q

Interrelationships of Business Processes & the AIS

A

every time that a business process occurs, AIS must capture, processes, record & generate reports of financial data as it happens.

Example: Business processes among a restaurant from ordering a meal to paying the bill.

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4
Q

4 General Categories of Business Process

A

Revenue
Conversion
Expenditure
Administrative

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5
Q

3 types of AIS

A

Manual
Legacy
Modern, Integrated IT Systems

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6
Q

Manual Systems

A

source documents and paper-based recordkeeping; manual records into manual accounting system

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7
Q

Source Document/ 3 important Functions

A

recordkeeping captures info on key information of a transaction; captures date, quantity, $$ amount

  1. input data to record transaction
  2. triggers business process to begin
  3. Audit trail
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8
Q

Turnaround Document

A

the output of information from AIS that can be input into AIS.

Example: CC Stmt issued from CPU. Once payment is submitted, input to match your CC account number. No human error.

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9
Q

General Ledger

A

details on entire accounts used in org’s accounting systems

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10
Q

General journal

A

non routine transactions; adjusting and closing entries

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11
Q

Special Journals

A

record specific types of transactions

payroll journal, cash receipts journal, cash disbursements journal

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12
Q

subsidiary Ledgers

A

detailed information for routine transactions

AR Subsidiary ledger for each customer - should tie back to the AR General Ledger Account

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13
Q

What is an integral part of IT besides hardware and software?

A

the human capital required to capture, record and process information in AIS

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14
Q

What are modules in the accounting system

A

similar to the subsidiary ledgers of AR, AP, & payroll

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15
Q

Legacy Systems

A

existing older AIS systems within an organization; usually contracted by programming that is becoming obsolete;

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16
Q

Advantages of Legacy Systems

A

customized to organization
support unique business processes
contain historical data
well understood by staff

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17
Q

Disadvantages of Legacy Systems

A 
costly
lack supporting docs
can't run on old hardware
not user-friendly
to difficult to modify
difficult to integrate when acquiring new companies
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18
Q

screen scrapers & disadvantage of implantation

Legacy Systems-not to replace

A

front ware that is more user friendly;

disadvantage - may not run as smoothly on old hardware/software

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19
Q

enterprise application integration

Legacy systems - not replace)

A

software/hardware used to integrate software systems into legacy systems

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20
Q

Replacement of Legacy Sytems

A

decision to completely add a new system; benefits must outweigh the costs

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21
Q

3 Methods to Improve Legacy Systems

A

Screenscrapers
Enterprise application integration
replacement of legacy systems

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22
Q

Modern Integrated systems

A

user friendly; use the latest technology

23
Q

Advantages of Purchasing AIS vs Developing AIS

A

lower cost - can be absorbed b all parts of the company
shorter implementation - companies do not need to design
fewer bugs - sold fully developed and tested

24
Q

2 CPU Architectures that AIS runs on

A

client-server model

cloud computing

25
Client-Server Computing
two computers on the same network working together to do application processing; Client (PC) sends request for information needed to the server. The server houses the information needed and sends that information that it is trying to extract back to the client (PC) Example: Manager wants to know overdue accounts; sends request from PC (client) to server (information is stored) Information is sent back to PC (Client)
26
What are the characteristics of Client Server Systems
client/server systems on same network systems are integrated parts of processing is shared btw client/server client is used in processing the data
27
Tasks Assigned to Client/Server
Client - edit subsets of data; present in user friendly way | server - manage large database and extracting data from data base
28
Cloud Computing
virtual server; data is stored by a third party where client has access to it Example: Itunes - when you purchased a song, it was downloaded to your iPhone; Now it is stored on an Apple Server and iPhone/computer has access to the songs.
29
Advantages of Cloud Computing
``` access information from virtually anywhere no need for extra software/hardware reduced costs scalability expanded access Infrastructure is reduced ```
30
Software as a Service (SaaS)
software in the cloud-pays a fee
31
Database as a Service (DaaS)
database in the cloud
32
Platform as a Service (PasS)
database with an operating system in the cloud
33
Infrastructure as a Service (IaaS)
infrastructure in the cloud | Infrastructure - computer servers, data storage devices, & networking components
34
Service Level Agreement (SLA)
an agreement to buy cloud computing services
35
Difference between Cloud Computing & Client-Server Computing
where information/software is stored
36
4 AIS Market Segments
small company $250k or less revenue midmarket $250k-$100 million beginning ERP 100 million-500 million tier 1 ERP $500 mil or more
37
Input Methods Used in Business Processes
Source Docs/keying - prone to human error bar codes - printed code Point of Sales Systems - captures sales by bar code Electronic data interchange - intercompany transfer of docs E-Commerce/E-business - online business transactions; customer buying and selling; EDI uses dedicated networks where as E-comm uses internet
38
Processing in AIS/Methods of Processing
calculations, classifications, summarization & consolidation batch processing online processing real-time processing
39
batch processing
processing similar transactions together; for routine transactions & high volume payroll processing is an example
40
Advantages of Batch Processing
efficient for large volumes audit trail maintained less costly software/hardware processing can take place when system is not busy
41
Disadvantages of Batch Processing
``` master files take longer to process legacy systems take longer duplication can occur integration is difficult batch systems have time lag ```
42
Online Processing
Processing one transaction at a time individually
43
Real time processing
data is processed immediately thus out put is available now
44
Advantages of Real Time Processing
errors corrected immediately information provided on a timely basis files always up to date integrated in a single database
45
Disadvantages of Real Time Processing
more expensive hard/software more susceptible to unauthorized user difficult to audit complex system
46
Outputs of AIS to Business Processes
``` trading documents (checks, invoices, statements) internal documents internal reports external reports ```
47
Methods to Document Processes & Systems
``` process maps system flowchart document flow chart data flow diagrams entity relationship diagrams ```
48
Process maps & Associated picitures
pictorial representation of business processes; in sequence ``` oval - start/finish of process rectangle - shows task/activity diamond - yes/no decision needs to be made arrow - direction of the process circle - break in process ```
49
system flowchart
do not show details, but show each step (manual, computerized, inputs)
50
data flow diagram
show logical design of a system; explode - more detail to describe each step in process
51
entity relationship diagrams
pictorial representation of logical structure of databases
52
entities
nouns that represent items of the accounting system (customers, vendors, inventory items)
53
attributes
characteristics of an entity | employee's attributes - last name, first name
54
cardinality & 3 ways to describe entities
how entities relate to each instance of another entity one to one - one employee has one personnel file one to many - 1 supervisor has many employees many to many - each vendor sells many items

Accounting Information Systems (1 decks)

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