ACTG 474 STUDY GUIDE
Data - Answers - Raw facts collected, recorded, and stored (numbers, dates, names).
Information - Answers - Data organized into a meaningful context so it becomes useful
(example: a sales invoice, not just numbers).
Decision quality - Answers - How good a decision is; useful information improves it, but
too much information can reduce it.
Information overload - Answers - When too much information overwhelms decision
makers and lowers decision quality.
Information technology (IT) - Answers - Technology used to collect, store, process, and
deliver information for decisions.
Value of information - Answers - Net benefit of information: benefits from better
decisions minus the costs to gather, maintain, and store data.
Relevant (useful info) - Answers - Information that directly relates to the decision (no
unnecessary noise).
Reliable (useful info) - Answers - Information that is dependable and free from bias.
Complete (useful info) - Answers - Information that includes all important aspects; it
does not leave out key facts.
Timely (useful info) - Answers - Information that arrives in time to be used for the
decision.
Understandable (useful info) - Answers - Information presented clearly so users
interpret it correctly.
Verifiable (useful info) - Answers - Independent people can check the data and reach
the same conclusion.
Accessible (useful info) - Answers - Information is available to authorized users when
needed.
Business process - Answers - A coordinated set of related activities performed by
people and/or machines to achieve an organizational goal.
, Transaction - Answers - An agreement/event between two entities to exchange goods,
services, or other measurable economic events.
Transaction processing - Answers - Capturing and processing transaction data so it can
produce accounting outputs (records, statements).
Give-get exchange - Answers - Basic pattern of many business processes: the
organization gives something and receives something in return.
Revenue cycle - Answers - Provide goods/services and receive cash (or a promise of
cash).
Expenditure cycle - Answers - Acquire goods/services and pay cash (or commit to pay).
Production (conversion) cycle - Answers - Turn inputs (labor + raw materials) into
finished goods.
Payroll (HR/payroll) cycle - Answers - Pay cash to employees in exchange for labor.
Financing cycle - Answers - Obtain or repay capital (cash) such as loans, investments,
and dividends—cash in/cash out decisions.
Accounting Information System (AIS) - Answers - A system that collects, records,
stores, and processes data to produce information for decision makers; includes people,
processes, technology, and controls.
Corporate strategy (AIS link) - Answers - The organization's overall goal/approach; it
determines what information the AIS must provide to measure progress.
Value chain - Answers - All internal activities that add value for customers; includes
primary activities and support activities.
Primary activities - Answers - Activities that directly create value for customers (e.g.,
operations, sales).
Support activities - Answers - Activities that help primary activities run efficiently (e.g.,
HR, IT, procurement).
Supply chain - Answers - The broader network that includes the company plus
suppliers, distributors, and customers.
Data processing cycle - Answers - Steps that transform transaction data into outputs:
input, storage, processing, and output.
Data input - Answers - Capturing transaction data, checking accuracy/completeness,
and ensuring approvals/policies are followed.
Data - Answers - Raw facts collected, recorded, and stored (numbers, dates, names).
Information - Answers - Data organized into a meaningful context so it becomes useful
(example: a sales invoice, not just numbers).
Decision quality - Answers - How good a decision is; useful information improves it, but
too much information can reduce it.
Information overload - Answers - When too much information overwhelms decision
makers and lowers decision quality.
Information technology (IT) - Answers - Technology used to collect, store, process, and
deliver information for decisions.
Value of information - Answers - Net benefit of information: benefits from better
decisions minus the costs to gather, maintain, and store data.
Relevant (useful info) - Answers - Information that directly relates to the decision (no
unnecessary noise).
Reliable (useful info) - Answers - Information that is dependable and free from bias.
Complete (useful info) - Answers - Information that includes all important aspects; it
does not leave out key facts.
Timely (useful info) - Answers - Information that arrives in time to be used for the
decision.
Understandable (useful info) - Answers - Information presented clearly so users
interpret it correctly.
Verifiable (useful info) - Answers - Independent people can check the data and reach
the same conclusion.
Accessible (useful info) - Answers - Information is available to authorized users when
needed.
Business process - Answers - A coordinated set of related activities performed by
people and/or machines to achieve an organizational goal.
, Transaction - Answers - An agreement/event between two entities to exchange goods,
services, or other measurable economic events.
Transaction processing - Answers - Capturing and processing transaction data so it can
produce accounting outputs (records, statements).
Give-get exchange - Answers - Basic pattern of many business processes: the
organization gives something and receives something in return.
Revenue cycle - Answers - Provide goods/services and receive cash (or a promise of
cash).
Expenditure cycle - Answers - Acquire goods/services and pay cash (or commit to pay).
Production (conversion) cycle - Answers - Turn inputs (labor + raw materials) into
finished goods.
Payroll (HR/payroll) cycle - Answers - Pay cash to employees in exchange for labor.
Financing cycle - Answers - Obtain or repay capital (cash) such as loans, investments,
and dividends—cash in/cash out decisions.
Accounting Information System (AIS) - Answers - A system that collects, records,
stores, and processes data to produce information for decision makers; includes people,
processes, technology, and controls.
Corporate strategy (AIS link) - Answers - The organization's overall goal/approach; it
determines what information the AIS must provide to measure progress.
Value chain - Answers - All internal activities that add value for customers; includes
primary activities and support activities.
Primary activities - Answers - Activities that directly create value for customers (e.g.,
operations, sales).
Support activities - Answers - Activities that help primary activities run efficiently (e.g.,
HR, IT, procurement).
Supply chain - Answers - The broader network that includes the company plus
suppliers, distributors, and customers.
Data processing cycle - Answers - Steps that transform transaction data into outputs:
input, storage, processing, and output.
Data input - Answers - Capturing transaction data, checking accuracy/completeness,
and ensuring approvals/policies are followed.
