Accounting Information Systems 2e Vernon Richardson Janie Chang Rodney Smith (Solutions Manual All Chapters, 100% Original Verified, A+ Grade) All Chapters Solutions Manual

Accounting Information Systems 2e Vernon Richardson Janie
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Chang Rodney Smith (Solutions Manual All Chapters, 100%
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Original Verified, A+ Grade) All Chapters Solutions Manual
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Supplement files download link at the end of this file.
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Chapter 1 – Accounting Information Systems and Firm Value
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Multiple Choice Questions
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1. c
2. d
3. a
4. c
5. d
6. b
7. d
8. a
9. d
10. b
11. b
12. c
13. a
14. c
15. a

Discussion Questions hi




1. Brainstorm a list of discretionary information that might be an output of an
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accounting information system and be needed by Starbucks. Prioritize which
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items might be most important and provide support.
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Answers will vary. Here are some potential answers:
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The cost of a cup of coffee, by type: Breakfast blend, Cafe estima, caffe Verona, espresso
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hiroast, hiEthiopia hisidamo, hifrench hiroast, hiGold hicoast hiblend, hiGuatemala hiAntigua, hihouse hiblend,
hiItalian hiroast, hiKenya hicoffee, hikomodo hidragon hiblend, hiorganic hiSerena hiblend, hiorganic hishade


higrown h i Mexico, hisumatra, hidecaf hicaffe hiVerona, hidecaf hiespresso hiroast, hidecaf hihouse hiblend,


hiand hidecaf hiSumatra!




Monthly Sales per square foot of retail space.
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hi Employee cost for each operating hour.
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Advertising expenditures per dollar of sales.
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The cost of condiments per dollar sales of coffee. Condiments might include sweeteners, liquid
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creamers, cream canisters, sugar packets, sugar canisters, stir sticks!
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The cost of electricity per operating hour each month of the year.
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, Richardson, Chang, Smith – Accounting Information Systems, 2nd Edition – Chapter 1



2. Explain the information value chain. How do business events turn into data then into
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information and then into knowledge? Give an example starting with the business event
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of the purchase of a DVD at Best Buy all the way to useful information for the CEO and
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other decision makers.
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The information value chain represents the overall transformation from a business need and
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business event (like each individual sale of U.S. flag) to an ultimate decision. The
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information value chain might be represented considering the purchase of a DVD at Best Buy
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in the following way:
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The DVD will be recorded as sales revenue and then after deducting its costs will add to or
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subtract from corporate income. The cash from the DVD sale will also add to the operating
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cash flows.
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The specific DVD will be recorded in the information as a sale to monitor which DVDs are
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selling within Best Buy. This will help Best Buy and its suppliers know which DVDs are
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selling and which type of DVDs should be reordered. The type of DVD will also help the
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marketing department better understand its customers and their respective demographic
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profile to better market to them.
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In addition, knowing the location of the DVD sale will also help decision makers know where
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its sales are occurring.
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The CEO can look at the profitability of DVDs overall, the specific types of DVDs that are
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selling and the location of those sales all due to the information value chain.
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3. Give three examples of types of discretionary information at your college or university
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and explain how the benefits of receiving that information outweigh the costs.
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Answers will vary. This represents a potential answer.
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Universities are often interested in their freshmen retention (the percentage of sophomores
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that return after their freshman year). They also quite interested in their four- or five-
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year graduation rates.
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Universities are also interested in their production of research grants. This is often used to
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monitor the success of their research and their ability to get interested sponsors (such as
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the National Institute of Health or the National Science Foundation).
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Information for each of these three examples can be gained by the information system at
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the university. However, a university generic information system does not usually offer
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this information as a standard report or standard output of the system. Therefore, work
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must be done to capture (and potentially digitize) this information, ensure its validity and
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then report it in an appropriate useful format. The cost of getting useful information will
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depend on the university and its technology. However, since these represent three keys
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metrics of a university
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, Richardson, Chang, Smith – Accounting Information Systems, 2nd Edition – Chapter 1



and will likely be used as a key input to manage the university, the benefits will potentially
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outweigh those costs.
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4. After a NBA basketball game a box score is produced detailing the number of points scored,
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assists made and rebounds retrieved (among other statistics). Using the characteristics of
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useful information discussed at the beginning of the chapter, please explain how this box
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score meets (or does not meet) the characteristics of useful information.
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A box score of a NBA basketball game (or other sports) produces overall team statistics by
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half and quarter and details player performance including minutes played, shots taken, shots
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made, free throw shots taken and made, assists, rebounds, steals, blocks and fouls.
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To be relevant, the information must potentially impact a decision that a decision maker
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must make. Relevant information is usually characterized by having predictive value,
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feedback value and receiving it on a timely basis. This information provides feedback
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value to explain how players performed in the game. The box score provides predictive
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value to the extent that prior performance (as reflected in the box score) is predictive of
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future performance. Since box scores are available immediately following the game, it is
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also received on a timely enough basis to make decisions for a subsequent game.
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To be reliable, the information must be verifiable, be representationally faithful and be
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neutral. There are often some allegations that the statistics included in a box score is
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affected by the bias of the scorekeeper. While the actual points scored by the team is
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verified by the officials, more minute details are not verified and may be subject to bias,
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thus limiting their reliability.
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The information is potentially relevant to the coach in helping to figure out which players
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are most efficient and productive. Which players play well against different teams and
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which players are good at particular aspects of offense and defense, among others.
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5. Some would argue that the role of accounting is simply as an information provider.
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Will a computer ultimately completely take over the job of the accountant? As part of
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your explanation, explain how the role of accountants in information systems continues
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to evolve.
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Accountants have a role as a business analyst. That is, they gather information to solve
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business problems or address business opportunities. They determine what information is
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relevant in solving business problems, then create or extract that information and finally
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analyze the information to solve the problem. An AIS provides a systematic means for
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accountants to get needed information and solve a problem.
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While a computer is very good at reliably collecting, processing and producing information,
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the role of the accountant when serving as a business analyst will continue to be able to
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, Richardson, Chang, Smith – Accounting Information Systems, 2nd Edition – Chapter 1
hi assess the problems the business is facing and work to provide information that will
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hi address it.hi




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