Learning Objectives - Chptrs 14-17 Flashcards
14.1 Distinguish between data and information and discuss the role of information systems in business
Data - raw facts that may or may not be meaningful to a business decision
Information - knowledge gained from processing data
Information systems - an organized method of collecting, storing and communicating past, present, and projected information on internal operations and external intelligence
14.2 Describe the components and types of information systems
Computer based information system - information systems that use computer and related technologies to store information electronically in an organized, accessible manner
Components
- computer hardware
- computer software
- telecommunications and computer networks
- data resource management
Types of information systems
Operational Support Systems - designed to produce a variety of information on an organization’s activities for both internal and external users
Management Support Systems - systems that are designed to provide support for effective decision making
14.3 Outline how computer hardware and software are used to manage information
Hardware consists of all tangible physical elements of a computer system including output and input devices.
Software provides the instructions that tell the hardware what to do. The operating system is the is the software that controls the basic workings of the computer.
14.4 Describe networking and telecommunications technology and the types of computer networks
Local area networks connect computers within a limited area. Wide area networks tie larger geographical regions together.
Wireless networks allow computers to communicate through radio waves.
Intranets allow employees to share information on a company network
14.5 Outline the security and ethical issues affecting information systems
Security
- Malware - malicious software that is designed to infect computer systems
- Cyber crimes - hacking, theft of hardware
Ethical issues
- Proper use of the system by users
- Organization’s obligation to protect employee’s, vendor and customers confidentiality
14.6 Explain how companies plan for, and recover from, information system disaster
- Routinely back up software and data
- Back up at an off-site location
- Invest in extra hardware and software sites
14.7 Review the trends in information systems
- Increasing demands of the distributed workforce
- increasing use of application service providers
- on demand computing and grid computing
- virtual offices
15.1 Explain the functions of accounting and identify three basic accounting activities
Accountants measure, interpret and communicate financial information to people inside and outside the firm to support informed decision making
- Financing
- Investing
- Operating activities
15.2 Describe the various types of accounting proffesionals
- Public accountants provide accounting services to other firms or individuals for a fee. Perform auditing, tax returns, management consulting, etc
- Management accountants are employed by a firm, where they collect and record financial transactions, prepare financial statements and interpret financial data for managers.
- Government and not for profit accountants perform many of the same functions as management accountants but instead of looking for profits and losses they look for at how effectively the organization is operating
15.3 Discuss the foundation of the accounting system
In Canada it is GAAP (generally accepted accounting principles) a set of guidelines and standards that accountants follow.
Basic characteristics of the financial statements are consistency, relevance, representational faithfulness, reliability, timeliness, understandability, verifiability and comparability
15.4 Outline the steps in the accounting cycle
- Recording transactions
- Classifying the transactions
- Summarizing the transactions
- Using the summaries to produce financial statements
15.5 Explain the functions and major components of the four principal financial statement
- Balance Sheet - assets, liabilities and owner’s equity
- The income statement - results of the firm’s operations over a specific time period. Focuses on revenues and expenditures and result profit and loss.
- The statement of changes in equity - Shows the change in the owner’s equity from the end of the previous year to the end of the current year
- The statement of cash flow - shows the firm’s cash receipts and cash payments during an accounting period
15.6 Discuss how financial ratios are used to analyze a company’s financial strengths and weaknesses
Just put the whole answer in because I didn’t quite understand what is important and what is not.
Liquidity ratios measure a firms ability to meet its short term obligations. Examples are the current ratio and the quick ratio, also called the acid test ratio. Activity ratios such as the inventory turnover ratios, the accounts receivable turnover ratio and the total asset turnover ratio, measure how effectively a firm uses it resources. Probability ratios assess the overall financial performance of the business. Examples re the gross profit margin, the net profit margin, and the return on on owners equity. Leverage ratios, such as the total liabilities to total assets ratio and the long term debt to equity ratio, measure the extent to which the firm relies on debt to finance its operations. Financial ratios help managers and outside evaluators compare. A firms current financial information twitch that of previous years and with the results for their firms in the same industry.
15.7 Describe the role of budgets in business
Budgets are financial guidelines for future periods. The show the firm’s expected sales revenue, operating expenses, cash receipts and cash expenses.
They provide standards against which actual performance can be measured.
15.8 Outline the accounting issues facing global business
- Exchange rates - daily changes in rates affect the accounting entires
