Chapter 1 Accounting Information Systems Flashcards
What is a system?
A set of two or more interrelated components interacting to achieve a goal.
What is goal conflict?
Occurs when components act in their own interest without regard for the overall goal.
What is goal congruence?
Occurs when components acting in their own interest contribute toward the overall goal.
What is data?
Facts that are collected, recorded, stored, and processed by a system.
What is information?
Data that have been organized and processed to provide meaning and improve decision-making.
What is information overload?
Exceeding the amount of information a human mind can absorb and process, resulting in a decline in decision-making quality.
What is information technology?
The computers and other electronic devices used to store, retrieve, transmit, and manipulate data.
What is the value of information?
It is the benefit produced by the information minus the cost of producing it.
What are the benefits of information?
Reduce uncertainty, improve decisions, improve planning, improve scheduling.
What are the characteristics of useful information?
Relevant, Reliable, Complete, Timely, Understandable, Verifiable, Accessible.
What is a business process?
A set of related, coordinated, and structured activities and tasks that help accomplish a specific organizational goal.
What is a transaction?
An agreement between two entities to exchange goods or services or any other event that can be measured in economic terms.
What is transaction processing?
Process of capturing transaction data, processing it, storing it for later use, and producing information output.
What is a give-get exchange?
Transactions that happen frequently, such as giving up cash to get inventory from a supplier.
What are the major business processes of transaction cycles?
Revenue cycle, expenditure cycle, production cycle, human resources/payroll cycle, financing cycle.
What is an accounting information system (AIS)?
A system that collects, records, stores, and processes data to produce information for decision makers.
What are the six components of AIS?
People, procedures, data, software, IT infrastructure, internal controls.
What are the business functions of AIS?
Collect and store data, transform data into information, provide adequate controls.
How can a well-designed AIS add value to an organization?
Improving quality, reducing costs, improving efficiency, sharing knowledge, improving internal control, improving decision making.
How can AIS help improve decision making?
Identify situations requiring action, reduce uncertainty, store information for feedback, provide timely information.
What are the roles of AIS in the value chain?
Inbound logistics, operations, outbound logistics, marketing and sales, service activities.
What are support activities in a business?
Firm infrastructure, human resources, technology activities, purchasing activities.
What is the data processing cycle?
The four operations performed on data to generate meaningful information: data input, data storage, data processing, information output.
What is data input?
The first step in processing input, capturing transaction data and entering them into the system.
What are source documents?
Documents used to capture transaction data at its source.
What are turnaround documents?
Company output sent to an external party, who adds data and returns it as an input document.
What is source data automation?
The collection of transaction data in machine-readable form at the time and place of origin.
What are ledgers?
Cumulative accounting information stored in general and subsidiary ledgers.
What is a general ledger?
A ledger that contains summary-level data for every asset, liability, equity, revenue, and expense account.
What is a subsidiary ledger?
A ledger used to record detailed data for a general ledger account with many individual subaccounts.
What is a control account?
A title given to a general ledger account that summarizes the total amounts recorded in a subsidiary ledger.
What is coding?
The systematic assignment of numbers or letters to items to classify and organize them.
What is a chart of accounts?
A list of the numbers assigned to each general ledger account.
What is an audit trail?
A path that allows a transaction to be traced through a data processing system.
What is a file?
A set of logically related records.
What is a master file?
A permanent file of records that stores cumulative data about an organization.
What is a transaction file?
A file that contains individual business transactions that occur during a specific fiscal period.
What is a database?
A set of interrelated, centrally controlled data files stored with minimal redundancy.
What are the CRUD activities?
Creating, Reading, Updating, Deleting data.
What is batch processing?
When updating is done at a certain period.
What is a query?
A request for the database to provide the information needed to deal with a problem.
What is an ERP system?
A system that integrates all aspects of an organization’s activities into one system.
What are typical ERP modules?
Financial, human resources, order to cash, purchase to pay, manufacturing, project management, customer relationship management.
What are the advantages of an ERP system?
Integrated data view, single data input, greater visibility, better access control, standardized procedures, improved customer service.
What are the disadvantages of an ERP system?
Cost, time required, changes to processes, complexity, resistance.
What are attributes in a database?
The properties and characteristics of interest of an entity stored in a database.
What is a field?
The portion of a data record where the data value for a particular attribute is stored.
What is a record?
A set of fields whose data values describe specific attributes of an entity.
What is a data value?
The actual value stored in a field, describing a particular attribute of an entity.
