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Accounting Systems Module 1 Exam Prep
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- 1What is an AIS?An AIS is a system that performs a number of activities to transform data into information for users. More specifically, an AIS is a system that collects, records, stores and processes data to assist users in decision making.
- 2What are the key Component's on an AIS?• People: without people who would use the AIS
• Procedures
• Data: about business activities
• Software: used to produce/process data
• IT infrastructure: computers
• Internal controls: without security an AIS cannot provide correct information or give assurance about the transparency of information. - 3What are the qualitative characteristics of information?Relevance: Important in decision making as irrelevant information leads to poor predictions and decisions
Reliability: Quality information that is free from bias or material error
Completeness: Necessary data has been included and all material information has been reported
Timeliness: Available before it loses its ability to influence decision making
Understandability: provides adequate information and detailed disclosure of accounting method used to users
Verifiability: measured used without error or bias because unethical accountants can produce deceitful information.
Accessibility: available when needed and in a useful format - 4How can an AIS add value?• Improving quality and reducing the costs of product and services
• A well designed AIS can make operations more efficient by providing more timely information
• A well-designed AIS can make it easier to share knowledge and expertise, perhaps thereby improving operations and even providing a competitive advantage.
• Information systems can improve efficiency & effectiveness of supply chain
• Can drastically improve decision making - 5What is the value chain?Value chain refers to the activities necessary until the products or services are sold but even after this there are some activities. An AIS can generate/provide information and help decision making in relation to the value chain.
- 6In regards to the value chain, what are activities split into?They are split into primary activities which are:
• Inbound logistics: ordering, receiving, and temporarily storing merchandise or materials
• Operations: Manufacturing and repackaging/displaying merchandise or protecting from theft (for non manufacturing firms)
• Outbound Logistics: Distribution and shipping
• Marketing and sales: Advertising and selling
• Service: Repairs and maintenance (companies provide services after the sale)
AND SUPPORT ACTIVITIES
which are firm infrastructure, human resources, technology and purchasing (without these the company cannot run well) - 7How can an AIS help with the value chain?An AIS processes, records and provides information about these activities. The value chain tells us about the business activities categorized into primary activities and support activities and thus this is why it has a vital role in recording data and then information.
- 8List some business processes.• The Revenue Cycle – Good and services are sold either for cash or future promise to receive cash (Accounts Receivable)
• Expenditure Cycle – Purchase for cash or a promise to pay cash in the future (Accounts Payable)
• The Production or Conversion Cycle – Raw materials are converted into finished goods
• The Human Resource/Payroll Cycle – Employees are haired, training, compensated, evaluated, promoted, and terminated
• The Financing Cycle – Acquiring capital by selling shares or borrowing money and where investors are paid dividends or interest - 9Why is an AIS important to business processes?AIS is essential for all five types of business processes. There are many calculates and cost consequences of these activities and thus accountants need to produce, store and provide information about this; which is role an AIS can do excellently.
- 10Distinguish between data and information.Data are facts that are collected, recorded, stored, and processed by an information system. Businesses must collect data about activities that take place, the resources affected by these activities and the people who participate in the activity.
Information is data that has been organized and processed to provide meaning to a user. When you get more information that you can affectively assimilate, you suffer from information overload. - 11What are the different phases of data processing cycle?1) Data Input
2) Data Storage
3) Data Processing
4) Information Output
The first step in processing transactions is to capture the data for each transaction that takes place and enter them into the system. - 12What is an ERP?A ERP system integrates all aspects of a company's operations with its tradition AIS. Furthermore, An Enterprise Resource Planning system is designed to process transactions and provide information.
- 13What is the key feature and benefits of an ERP?A key feature of ERP is the integration of financial with other nonfinancial operating data. Other benefits of ERP is:
Data is captured once
Greater management visibility/increased monitoring
Better Access Controls
Standardizs business operating procedures
Improved customer service
More efficient manufacturing
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- Skills for Life Accounting Systems Fichas sobre Accounting Systems Module 1 Exam Prep , creado por tusken13 el 25/05/2016.
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