The Information System

Question 1

What are the two varieties of internal information flows?

Answer 1

1. Horizaontal flows of information
2. Vertical flows of information
   a. downward flows
   b. upward flows

Question 2

_______________ is a business resource that needs to be appropriately managed and is vital to the survival of contemporary businesses.

Answer 2

INFORMATION

Question 3

_________________ is a group of interrelated multiple components or subsystems that serve a common purpose.

Answer 3

SYSTEM

Question 4

A system is called a ______________ when it is viewed as a component of a larger system.

Answer 4

SUBSYSTEM

Question 5

A subsystem is considered a _______________ when it is the focus of attention.

Answer 5

SYSTEM

Question 6

________________ is the process of dividing the system into smaller subsystem parts.

Answer 6

SYSTEM DECOMPOSITION

Question 7

A system wherein distinct parts are not self-contained, as they are reliant on the functioning of the other parts of the system.

Answer 7

SYSTEM INTERDEPENDENCY

Question 8

____________________ is the set of formal procedures by which data is collected, processed into information, and distributed to users.

Answer 8

INFORMATION SYSTEM

Question 9

A ___________ is a business event.

Answer 9

TRANSACTION

Question 10

What are the two different types of transactions?

Answer 10

1. Financial transactions
2. Nonfinancial transactions

Question 11

It is a system that identifies, collects, processes, and communicates economic information about a firm using a wide variety of technologies.

Answer 11

ACCOUNTING INFORMATION SYSTEMS

Question 12

An Accounting Information System processes financial and nonfinancial transactions that directly affect the processing of financial transactions. On the other hand, _________________ processes nonfinancial transactions that are not normally processed by traditional AIS.

Answer 12

MANAGEMENT INFORMATION SYSTEMS

Question 13

Name three AIS Subsystems.

Answer 13

1. Transaction processing system
2. General Ledger or Financial Reporting System
3. Management Reporting System

Question 14

This is an AIS subsystem that supports daily business operations.

Answer 14

Transaction processing system

Question 15

This is an AIS subsystem that produces financial statements and reports.

Answer 15

General Ledger or Financial Reporting System

Question 16

This is an AIS subsytem that produces special-purpose reports for internal use.

Answer 16

Management Reporting System

Question 17

_________________ are financial transactions that enter the information system from internal and external sources.

Answer 17

DATA SOURCES

Question 18

__________________are the most common source of data for most organizations.

Answer 18

EXTERNAL FINANCIAL TRANSACTIONS

Question 19

__________________ involve the exchange or movement of resources within the organization.

Answer 19

INTERNAL FINANCIAL TRANSACTIONS

Question 20

What are the four functions for transforming data into information according to the general AIS model?

Answer 20

1. Data Collection
2. Data Processing
3. Data Management
4. Information Generation

Question 21

This function includes capturing transaction data, recording data onto forms, and validating and editing the data.

Answer 21

DATA COLLECTION

Question 22

This function includes classifying, transcribing, sorting, batching, merging, calculating, summarizing, and comparing data.

Answer 22

DATA PROCESSING

Question 23

This function includes storing, retrieving, and deleting data.

Answer 23

DATA MANAGEMENT

Question 24

This function includes compiling, arranging, formatting and presenting data.

Answer 24

INFORMATION GENERATION

Question 25

What are the five characteristics of useful information?

Answer 25

1. Relevance 2. Timeliness 3. Accuracy 4. Completeness 5. Summarization

Question 26

What are the three goals of an information system?

Answer 26

To suport: 1. the stewardship function of management 2. management's decision making 3. the firm's day-to-day operations

Question 27

_____________________ is a very common method of organizing.

Answer 27

SEGMENTING BY BUSINESS FUNCTION

Question 28

Information reliabilty requires _______________________________

Answer 28

ACCOUNTING INDEPENDENCE

Question 29

There are two ranges of the computer services function. Most companies fall between these two ranges. What are these two ranges?

Answer 29

1. Distributed Data Processing 2. Centralized Data Processing

Question 30

This Computer Services Function involves reorganizing the computer services function into small information processing units that are distributed to end users and placed under their control.

Answer 30

DISTRIBUTED DATA PROCESSING

Question 31

This Computer Services Function involves all data processing being performed by one or more large computers housed at a central site that serves users throughout the organization.

Answer 31

CENTRALIZED DATA PROCESSING

Question 32

What are four potential advantages of a distributed processing system?

Answer 32

1. Cost reductions 2. Improved cost control responsibility 3. Improved user satisfaction 4. Backup of data

Question 33

What are the seven potential disadvantages of a distributed processing system?

Answer 33

1. Loss of control 2. Mismanagement of company resources 3. Hardware and software incompatibility 4. Redundant tasks and data 5. Consolidating tasks usually segregated 6. Difficulty attracting qualified personnel 7. Lack of standards

Question 34

____________________ is a model where transaction processing, information processing, and accounting are physically performed by people, usually using paper documents.

Answer 34

MANUAL PROCESSING MODEL

Question 35

What are five data redundancy problems?

Answer 35

1. Data storage 2. Data updating 3. Currency of information 4. Task-data dependency 5. Data integration

Question 36

____________________ is an accounting framework for modeling an organization's economic resources, events, agents, and interrelationships among these facets of the organization.

Answer 36

REA MODEL

Question 37

________________________ are often used to model interrelationships among resources, events, and agents as seen in the REA Model.

Answer 37

Entity-relationship diagrams

Question 38

The accounting function is responsible for the physical system, while the computer function is responsible for the conceptual system. True or False?

Answer 38

FALSE. The accounting function is responsible for the conceptual system, while the computer function is responsible for the physical system.

Question 39

The_______________________ determines the nature of the information required, its sources, its destination, and the accounting rules that must be applied. a. conceptual system b. physical system

Answer 39

conceptual system

Question 40

What are the three functions of accountants in the information system?

Answer 40

1. Information System Users 2. System Designers 3. System Auditors

Question 41

These accountants attest to fairness of financial statements.

Answer 41

EXTERNAL AUDITORS

Question 42

These accountants evaluate IT, often as part of external audit.

Answer 42

IT AUDITORS

Question 43

These accountants provide in-house IS and IT appraisal services.

Answer 43

INTERNAL AUDITORS