Exam 1

Question 1

What is a system?

Answer 1

A set of interrelated components that interact to achieve a goal.

Question 2

What is goal conflict?

Answer 2

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

Question 3

What is goal congruence?

Answer 3

When a subsystem’s goals align with the organization’s overall objectives.

Question 4

What is an Accounting Information System (AIS)?

Answer 4

A system that collects, records, stores, and processes data to produce information for decision-makers.

Question 5

Why study AIS?

Answer 5

Fundamental to accounting, critical for career success, complements other systems courses, tested on CPA exam, impacts corporate strategy.

Question 6

What is data?

Answer 6

Raw facts collected, recorded, and stored by an information system.

Question 7

What is information?

Answer 7

Data that has been processed and organized to provide meaning and improve decision-making.

Question 8

What is information overload?

Answer 8

Occurs when too much information reduces decision-making quality.

Question 9

How is information value determined?

Answer 9

Benefits of information should exceed the cost of gathering, maintaining, and storing it.

Question 10

Name three characteristics of useful information.

Answer 10

Accurate, timely, relevant (others include verifiable, accessible, complete, and understandable).

Question 11

What is a business cycle?

Answer 11

A set of structured activities performed by people, machines, or both to achieve a specific goal.

Question 12

What are the five major business cycles?

Answer 12

Revenue, Expenditure, Production, Payroll, and Financing cycles.

Question 13

What is the major give-get in the revenue cycle?

Answer 13

Give goods or services, get cash.

Question 14

What is the major give-get in the expenditure cycle?

Answer 14

Get goods or services, give cash.

Question 15

What is the major give-get in the production cycle?

Answer 15

Give labor and raw materials, get finished goods.

Question 16

What is the major give-get in the payroll cycle?

Answer 16

Give cash, get labor.

Question 17

What is the major give-get in the financing cycle?

Answer 17

Give cash, get cash (loans, investments, dividends).

Question 18

How does an AIS add value?

Answer 18

Improves decision-making, efficiency, quality, knowledge sharing, and internal controls.

Question 19

What are the primary activities in the value chain?

Answer 19

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

Question 20

What are the support activities in the value chain?

Answer 20

Firm infrastructure, human resources, technology, and purchasing.

Question 21

What are the steps in processing data input?

Answer 21

Capture transaction data, ensure accuracy and completeness, follow company policies.

Question 22

What are source documents?

Answer 22

Documents that capture transaction data at the time of the event, such as invoices, purchase orders, and receipts.

Question 23

What is RFID?

Answer 23

Radio Frequency Identification, used to track items with small chips that store data.

Question 24

What is a general ledger?

Answer 24

A summary-level account that tracks all financial transactions of a business.

Question 25

What is a subsidiary ledger?

Answer 25

A detailed account that supports the general ledger, containing transaction specifics.

Question 26

What is the difference between a general journal and a special journal?

Answer 26

General journals record non-routine transactions, while special journals record routine transactions like sales or purchases.

Question 27

What is an audit trail?

Answer 27

A traceable path of a transaction from initiation to final records in the system.

Question 28

What is a chart of accounts?

Answer 28

A list of all accounts in a company’s general ledger.

Question 29

What are the four types of data processing (CRUD)?

Answer 29

Creating, Reading, Updating, Deleting.

Question 30

What is batch processing?

Answer 30

Processing transactions at scheduled times, rather than in real time.

Question 31

What is real-time processing?

Answer 31

Processing transactions immediately as they occur.

Question 32

What is an ERP system?

Answer 32

Enterprise Resource Planning system, integrates business processes across departments.

Question 33

What are advantages of ERP systems?

Answer 33

Improved efficiency, real-time data, reduced redundancy, standardization.

Question 34

What are disadvantages of ERP systems?

Answer 34

High cost, complexity, implementation time, user resistance.

Question 35

Why is documentation important?

Answer 35

Helps understand systems, supports audits, complies with regulations like SOX, and aids in development.

Question 36

What is a Data Flow Diagram (DFD)?

Answer 36

A graphical representation of data movement in a system, showing sources, processes, and storage.

Question 37

What are key elements of a DFD?

Answer 37

Processes, Data Flows, Data Stores, Sources/Destinations.

Question 38

What is a flowchart?

Answer 38

A diagram that shows system processes, inputs, outputs, and decision points.

Question 39

What are the three types of flowcharts?

Answer 39

Document flowcharts, System flowcharts, Program flowcharts.

Question 40

What is a business process diagram?

Answer 40

A standardized visual representation of business processes for easy understanding.

Question 41

How do DFDs and flowcharts differ?

Answer 41

DFDs focus on data movement, while flowcharts depict process flow and decision points.

Question 42

What is a context diagram?

Answer 42

A high-level DFD that shows system interactions with external entities.

Question 43

What are guidelines for creating flowcharts?

Answer 43

Use clear symbols, organize left to right/top to bottom, name processes descriptively, keep it readable.