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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
Q

Client-Server Computing

A

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
Q

What are the characteristics of Client Server Systems

A

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
Q

Tasks Assigned to Client/Server

A

Client - edit subsets of data; present in user friendly way

server - manage large database and extracting data from data base

28
Q

Cloud Computing

A

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
Q

Advantages of Cloud Computing

A 
access information from virtually anywhere
no need for extra software/hardware
reduced costs
scalability 
expanded access
Infrastructure is reduced
30
Q

Software as a Service (SaaS)

A

software in the cloud-pays a fee

31
Q

Database as a Service (DaaS)

A

database in the cloud

32
Q

Platform as a Service (PasS)

A

database with an operating system in the cloud

33
Q

Infrastructure as a Service (IaaS)

A

infrastructure in the cloud

Infrastructure - computer servers, data storage devices, & networking components

34
Q

Service Level Agreement (SLA)

A

an agreement to buy cloud computing services

35
Q

Difference between Cloud Computing & Client-Server Computing

A

where information/software is stored

36
Q

4 AIS Market Segments

A

small company $250k or less revenue
midmarket $250k-$100 million
beginning ERP 100 million-500 million
tier 1 ERP $500 mil or more

37
Q

Input Methods Used in Business Processes

A

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
Q

Processing in AIS/Methods of Processing

A

calculations, classifications, summarization & consolidation

batch processing
online processing
real-time processing

39
Q

batch processing

A

processing similar transactions together; for routine transactions & high volume
payroll processing is an example

40
Q

Advantages of Batch Processing

A

efficient for large volumes
audit trail maintained
less costly software/hardware
processing can take place when system is not busy

41
Q

Disadvantages of Batch Processing

A 
master files take longer to process
legacy systems take longer
duplication can occur
integration is difficult
batch systems have time lag
42
Q

Online Processing

A

Processing one transaction at a time individually

43
Q

Real time processing

A

data is processed immediately thus out put is available now

44
Q

Advantages of Real Time Processing

A

errors corrected immediately
information provided on a timely basis
files always up to date
integrated in a single database

45
Q

Disadvantages of Real Time Processing

A

more expensive hard/software
more susceptible to unauthorized user
difficult to audit complex system

46
Q

Outputs of AIS to Business Processes

A 
trading documents (checks, invoices, statements)
internal documents
internal reports
external reports
47
Q

Methods to Document Processes & Systems

A 
process maps
system flowchart
document flow chart
data flow diagrams
entity relationship diagrams
48
Q

Process maps & Associated picitures

A

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
Q

system flowchart

A

do not show details, but show each step (manual, computerized, inputs)

50
Q

data flow diagram

A

show logical design of a system; explode - more detail to describe each step in process

51
Q

entity relationship diagrams

A

pictorial representation of logical structure of databases

52
Q

entities

A

nouns that represent items of the accounting system (customers, vendors, inventory items)

53
Q

attributes

A

characteristics of an entity

employee’s attributes - last name, first name

54
Q

cardinality & 3 ways to describe entities

A

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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