Unit 2 - Module 1 Flashcards
Accounting Information Systems (AIS)
Specialized subset of information systems that processes financial transactions.
End users
User for whom the system is built.
External Users
They include creditors, stockholders, potential investors, regulatory agencies, tax authorities, suppliers, and customers.
Internal users
- They include management at all levels of the organization as well as operations personnel.
- Characterized by characterized by frequent changes in the information needs of internal users.
Data
Facts, which may or may not be processed (edited, summarized, or refined) and which have no direct effect on the user.
Information
It is defined simply as processed data, which cause the user to take an action that he or she otherwise could not, or would not, have taken, and determined by the effect it has on the user, not by its physical form.
Data sources
Financial transactions that enter the information system from both internal and external sources.
Data Collection
First operational stage in the information system.
Data Processing
Group that manages the computer resources used to perform the day-to-day processing of transactions.
Data Attribute
An attribute is a logical and relevant characteristic of an entity about which the firm captures data.
Record
A record is a complete set of attributes for a single occurrence within an entity class.
File
A file (or table) is a complete set of records of an identical class. For example, all the AR records of the organization constitute the AR file.
Database Management
involves three fundamental tasks: storage, retrieval, and deletion. The storage task assigns keys to new records and stores them in their proper location in the database. Retrieval is the task of locating and extracting an existing record from the database for processing. After processing is complete, the storage task restores the updated record to its place in the database. Deletion is the task of permanently removing obsolete or redundant records from the database.
Information Generation
is the process of compiling, arranging, formatting, and presenting information to users. Information can be an operational document such as a sales order, a structured report, or a message on a computer screen. Regardless of physical form, useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization.
Accuracy
Information must be free from material errors. Materiality is, however, a difficult concept to quantify. It has no absolute value; it is a problem-specific concept. This means that, in some cases, information must be perfectly accurate. In other instances, the level of accuracy may be lower. A material error exists when the amount of inaccuracy in information causes the user to make poor decisions or to fail to make necessary decisions.
Completeness
No piece of information essential to a decision or task should be missing. For example, a report should provide all necessary calculations and present its message clearly and unambiguously.
Summarization
Information should be aggregated in accordance with the user’s needs. Lower-level managers tend to need information that is highly detailed. As information flows upward through the organization to top management, it becomes more summarized.
Feedback
is a form of output that is sent back to the system as a source of data. Feedback may be internal or external and is used to initiate or alter a process.
Functional Segments
Segmentation by business function is a common method of organizing a business entity. Functional segments derive from the flow of resources through the firm.
Materials Management Sub-Functions
- Purchasing
- Receiving
- Stores
Materials Management Sub-Function: Purchasing
Purchasing is responsible for ordering inventory from vendors when inventory levels fall to their reorder points. The nature of this task varies among organizations. In some cases, purchasing requires no more than sending a purchase order to a designated vendor. In other cases, this task involves soliciting bids from a number of competing vendors. The nature of the business and the type of inventory determine the extent of the purchasing function.
Materials Management Sub-Function: Receiving
Receiving is the task of accepting the inventory previously ordered by purchasing. Receiving activities include counting and checking the physical condition of these items. This is an organization’s first, and perhaps only, opportunity to detect incomplete deliveries and damaged merchandise before they move into the production process.
Materials Management Sub-Function: Stores
Stores takes physical custody of the inventory received and releases these resources into the production process as needed.
Production Planning
involves scheduling the flow of materials, labor, and machinery to efficiently meet production needs. This requires information about the status of sales orders, raw materials inventory, finished goods inventory, and machine and labor availability.
Quality Control
monitors the manufacturing process at various points to ensure that the finished products meet the firm’s quality standards. Effective quality control detects problems early to facilitate corrective action. Failure to do so may result in excessive waste of materials and labor.
Maintenance
monitors the manufacturing process at various points to ensure that the finished products meet the firm’s quality standards. Effective quality control detects problems early to facilitate corrective action. Failure to do so may result in excessive waste of materials and labor.
Marketing
The marketing function deals with the strategic problems of product promotion, advertising, and market research. On an operational level, marketing performs such daily activities as sales order entry.
Distribution
Distribution is the activity of getting the product to the customer after the sale.
