Ain2601 – Exam Preparation 2022

AIN2601 – EXAM PREPARATION 5. TIA is not familiar with database terminology. Below are 2 extracts from the database: QUESTION 3 This is Africa Taxidermy (TIA) is a taxidermy that prepares, stufs and mounts the skins of animals. Their head office is located in Pretoria and they have several branches across South Africa. No services are rendered t the general public, TIA only deals with registered professional hunters (PH) who take individual hunters on hunting expeditions. TIA receives an average of 2 000 trophies per year from 30 PHs. Before doing a transaction with a PH, TIA requires the PH to supply them with a valid registration number. Every branch keeps an individual spreadsheet with the PH’s details and registration number. The branches send these spreadsheets to head office twice a year. At head office the individual spreadsheets are copied and pasted onto one spreadsheet to consolidate the information. In the past year a couple of transactions have been done with PHs without registration numbers or with valid registration numbers. When the matter was investigated TIA realized that the branches did not have access to all the information and that the information was not always up to date. Upon your recommendation, TIA considers creating a relational database to solve this issue. The management and accounting staf do not have knowledge of databases and therefore have a number of questions. Required: Refer to the case study information above and answer the following questions: 1. Explain the garbage-in-garbage-out principle to TIA. The quality of information is directly linked to the quality of raw data entered – in other words, inaccurate data will lead to inaccurate information and incomplete data will lead to incomplete information, which in turn will result in inefective decisions. 2. Define a database. A database can be defined as an organised collection of related data that is managed and stored electronically and can provide data to diferent application software in the organisation. 3. List 4 benefits associated with the relational database model. - Data can be assessed, inserted and/or deleted without changing the database structure - The database structure can be easily customised for most types of data storage - Data does not need to be duplicated - Most users easily understand the structure - It is easy to search for and extract data from the database 4. TIA wants to develop a new chart of accounts (CoA) and has already taken the following into consideration: - The organisation’s business operations and industry - The organisation’s structure - Reporting detail required - Plan for the future List and briefly explain 3 guidelines (apart from those already considered) which should be taken into account when developing a new chart of accounts (CoA). - Logical – The CoA must have a logical flow in the major categories, subcategories and the related account number blocks and individual account numbers. For example, the balance sheet accounts will be first, followed by the income statement accounts. The categories, subcategories and the related GL accounts will not be mixed, but follow each other logically - Consistent – The account number structure and format must be consistent between accounts used - Account description – The account description should clearly but briefly explain the nature of the GL account - Draft – Create a draft structure on paper first before implementing it in the AIS. It is easier to change the draft than the implemented CoA - Feedback – Obtain feedback from the diferent role players on the draft CoA. They may have insights you have not yet considered and which could influence the CoA materially - Sign-of – Obtain sign-of from applicable management on the final CoA before implementing i