Chapter 1 - Accounting Information Systems: An Overview

Question 1

What is a system?

Answer 1

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

see Ch. 1 - Introduction

Question 2

What is goal conflict?

Answer 2

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

see Ch. 1 - Introduction

Question 3

What is goal congruence?

Answer 3

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

see Ch. 1 - Introduction

Question 4

What is data?

Answer 4

Facts that are collected, recorded, stored, and processed by an information system.

Question 5

What is information?

Answer 5

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

Question 6

What is machine-readable?

Answer 6

Data that can be read and processed by a computer?

Question 7

In what format are public companies required to upload their financial statements?

Answer 7

XBLR (eXtensible Business Reporting Language)

Question 8

What is information overload?

Answer 8

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.

Question 9

What is information technology?

Answer 9

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

Question 10

What is the value of information?

Answer 10

The benefit provided by information minus the cost of producing it.

Question 11

What are the components of an information system?

Answer 11

People, technology, and organization.

Question 12

What are the 14 characteristics of useful information?

Answer 12

Access restricted, accurate, available, reputable, complete, concise, consistent, current, objective, relevant, timely, useable, understandable, verifiable.

Question 13

What is a business process?

Answer 13

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

Question 14

What is a transaction?

Answer 14

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

Question 15

What is transaction processing?

Answer 15

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

Question 16

What is a give-get exchange?

Answer 16

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.

Question 17

What are transaction cycles?

Answer 17

The major give-get exchanges that occur frequently in most companies.

Question 18

What are the five major business processes or transaction cycles?

Answer 18

Revenue cycle, expenditure cycle, production cycle or conversion cycle, human resources and payroll cycle, financing cycle.

Question 19

What is the revenue cycle?

Answer 19

The selling of goods and services for cash or a promise of future cash.

Question 20

What is the expenditure cycle?

Answer 20

The purchase of inventory for resale or raw materials to use in producing products in excahge for cash or a future promise to pay cash.

Question 21

What is the production or conversion cycle?

Answer 21

The process where raw materials are transformed into finished goods.

Question 22

What is the human resources and payroll cycle?

Answer 22

The process where employees are hired, trained, compensated, evaluated, promoted, and terminated.

Question 23

What is the financing cycle?

Answer 23

The process where companies sell shares in the company to investors and borrow from creditors, and pay interest and dividend.

Question 24

What is an accounting information system?

Answer 24

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.

Question 25

What are the six components of an AIS?

Answer 25

People, procedures and instructions, data, software, IT infrastructure, and internal controls and security measures.

Question 26

What three business functions do AIS fulfill?

Answer 26

Collect and store data, transform data into information, and provide adequate controls to safeguard assets and data.

Question 27

What are the 6 ways an AIS can add value to an organization?

Answer 27

Improve the quality and reduce the costs of products or services, improve efficiency, share knowledge, improve efficiency and effectiveness of the supply chain, improve internal control structure, and improve decision making.

Question 28

What is artificial intelligence?

Answer 28

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

Question 29

What are data analytics?

Answer 29

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

Question 30

What is a data dashboard?

Answer 30

Interactive, real-time display of key indicators of operating performance; display of important data points, metrics, and key performance indicators in easily understood data visualizations such as line or bar charts, tables, or gauges.

Question 31

What is the blockchain?

Answer 31

Individual digital records, called blocks, linked together using cryptography in a single list, called a chain. Stored in a distributed ledger of hashed documents that functions as a decentralized database.

Question 32

What is virtualization?

Answer 32

Running multiple systems simultaneously on one physical computer.

Question 33

What is cloud computing?

Answer 33

Using a browser to remotely access software, data storage, and applications.

Question 34

What is the Internet of Things?

Answer 34

Embedding sensors in devices so they can connect to the Internet.

Question 35

What is the value chain?

Answer 35

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

Question 36

What is a primary activity?

Answer 36

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

Question 37

What are the five primary activities?

Answer 37

Inbound logistics, operations, outbound logistics, marketing and sales, and service.

Question 38

What are support activities?

Answer 38

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

Question 39

What are the four support activities?

Answer 39

Firm infrastructure, human resources, technology, and purchasing.

Question 40

What is the supply chain?

Answer 40

An extended system that includes an organization’s value chain as well as its supplier’s, distributor’s, and customer’s.