Chapter 1

Question 1

two or more interrelated components that interact to achieve a goal, often composed of subsystems that support the larger system

Answer 1

system

Question 2

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

Answer 2

goal conflict

Question 3

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

Answer 3

goal congruence

Question 4

facts that are collected, recorded, stored, and processed by a system

Answer 4

data

Question 5

data that have been organized and processed to provide meaning and improve decision making

Answer 5

information

Question 6

exceeding the amount of information a human mind can absorb and process, resulting in a decline in decision making quality and an increase in the cost of providing information

Answer 6

information overload

Question 7

the computers and other electronic devices used to store, retrieve, transmit and manipulate data.

Answer 7

information technology (IT)

Question 8

the benefit provided by information less the cost of producing it

Answer 8

value of information

Question 9

seven characteristics that make information useful

Answer 9

1. Relevant
2. Reliable
3. Complete
4. Timely
5. Understandable
6. Verifiable
7. Accessible

Question 10

reduces uncertainty, improves decision asking or confirms or corrects prior expectations

Answer 10

Relevant information

Question 11

free from error or bias; accurately represents organization events or activities

Answer 11

Reliable information

Question 12

Does not omit important aspects of the events or activities it measures

Answer 12

Complete information

Question 13

Provided in time for decision makers to make decisions

Answer 13

Timely information

Question 14

Presented in a useful and intelligible format.

Answer 14

Understandable information

Question 15

Two independent, knowledgeable people produce the same information

Answer 15

Verifiability

Question 16

Available to users when they need it and in a format they can use

Answer 16

Accessible Information

Question 17

a set of relate, coordinated, and structured activities and tasks that are performed by a person, a computer, or a machine that help accomplish a specific organizational goal

Answer 17

business process

Question 18

an agreement between two entities to exchange goods or services, such as selling inventory in exchange for cash; any other event that can be measured in economic terms by an organization

Answer 18

transaction

Question 19

process of capturing transaction data, processing it, storing it for later use, and producing information output, such as a managerial report or a financial statement

Answer 19

transaction processing

Question 20

transactions that happen a great many times, such as giving up cash to get inventory from a supplier and giving employees a paycheck in exchange for their labor.

Answer 20

give-get exchange.

Question 21

the major get-give exchanges that occur frequently in most companies

Answer 21

business processes or exchange cycles

Question 22

activities associated with selling goods and services in exchange for cash or a future promise to receive cash

Answer 22

revenue cycle

Question 23

activities associated wit purchasing inventory for resale or raw materials in exchange for cash or a future promise to pay cash.

Answer 23

expenditure cycle

Question 24

activities associated with using labor, raw materials and equipment to produce finished goods

Answer 24

production or conversion cycle

Question 25

activities associated with hiring, training, compensating, evaluating, promoting, and terminating employees

Answer 25

human resources/payroll cycle

Question 26

activities associated with raising money by selling shares in the company to investors and borrowing money as well as paying dividends and interest

Answer 26

financing cycle

Question 27

information processing operations involved in pdating the general ledger and preparing reports for both management and external parties

Answer 27

general ledger and reporting system.

Question 28

a system that collects, records, stores, and processes data to produce information for decision makers. It includes people, procedures and instructions, data, software, information technology infrastructure, and internal controls and security measures.

Answer 28

accounting information systems

Question 29

Six components of an AIS

Answer 29

1. The People who use the system
2. the Procedures and Instructions used to collect, process, and store data
3. the Data about the organization and its business activities
4. the Software used to process the data
5. The Information Technology Infrastructure, including computers, peripheral devices, and network communications devices used in AIS
6. the Internal Controls and Security Measures that safe guard AIS data

Question 30

Those 6 components of AIS enable three important business functions

Answer 30

1. Collect and store data about organizational activities, resources and personnel
2. Transform data into information so management can plan, execute, control and evaluate number 1.
3. Provide adequate controls to safeguard the organization’s assets and data.

Question 31

six ways AIS adds value to an organization

Answer 31

1. Improves quality and reduces costs of products and services
2. Improves efficiency
3. Shares knowledgable
4. Improves the efficiency and effectiveness of its supply chain
5. Improves internal control structure
6. Improves decision making

Question 32

the use of data warehouses and complex algorithms to forecast future events, based on historical trends and calculated probabilities.

Answer 32

predictive analysis

Question 33

linking together of all the primary and support activities in a business. Value is added as a product passes through the chain

Answer 33

value chain

Question 34

value chain activities that produce, market, and deliver products and services to customers and provide post delivery service and support.

Answer 34

primary activities

Question 35

value chain activities such as firm infrastructure, technology, purchasing, and human resources that enable primary activities to be performed efficiently and effectively.

Answer 35

support activities

Question 36

and extended system that includes an organization’s value chain as well as its suppliers, distributors, and customer.s

Answer 36

supply chain