Appendix B
Accounting Information Systems
Review Questions
1. What is an accounting information system (AIS)?
An accounting information system (AIS) is a system that collects, records, stores, and processes
accounting data to produce information that is useful for decision makers.
2. What does an effective accounting information system provide?
An effective accounting information system provides control, compatibility, flexibility, relevance,
and a positive cost/benefit relationship.
3. Explain the three basic components of an accounting information system.
The three basic components of an accounting information system are source documents and input
devices, processing and storage, and outputs.
Source documents provide the evidence for accounting transactions. In a computerized system, the
data is transferred into the AIS by keyboard and computer or computerized scanning equipment.
Processing of data includes journalizing transactions and posting to the accounts. Computerized
systems use software to process transactions. Computerized systems store data on a server or in the
cloud.
The outputs are the reports used for decision making, including financial statements.
4. What is a special journal?
A special journal is an accounting journal designed to record a specific type of transaction.
5. What is the purpose of a subsidiary ledger?
A subsidiary ledger holds individual accounts that support a general ledger account. The sum of the
balances of the accounts in the subsidiary ledger equals the balance in the control account. Common
examples include Accounts Receivable and Accounts Payable. The subsidiary ledger provides
details about a general ledger account. For example, the accounts receivable subsidiary ledger
provides details about the accounts receivable for each customer as far as amount paid, amount
unpaid, amount purchased on credit, and so on.
6. What is a control account?
A control account is a general ledger account whose balance equals the sum of the balances in a
group of related accounts in a subsidiary ledger.
B-1
Accounting Information Systems
Review Questions
1. What is an accounting information system (AIS)?
An accounting information system (AIS) is a system that collects, records, stores, and processes
accounting data to produce information that is useful for decision makers.
2. What does an effective accounting information system provide?
An effective accounting information system provides control, compatibility, flexibility, relevance,
and a positive cost/benefit relationship.
3. Explain the three basic components of an accounting information system.
The three basic components of an accounting information system are source documents and input
devices, processing and storage, and outputs.
Source documents provide the evidence for accounting transactions. In a computerized system, the
data is transferred into the AIS by keyboard and computer or computerized scanning equipment.
Processing of data includes journalizing transactions and posting to the accounts. Computerized
systems use software to process transactions. Computerized systems store data on a server or in the
cloud.
The outputs are the reports used for decision making, including financial statements.
4. What is a special journal?
A special journal is an accounting journal designed to record a specific type of transaction.
5. What is the purpose of a subsidiary ledger?
A subsidiary ledger holds individual accounts that support a general ledger account. The sum of the
balances of the accounts in the subsidiary ledger equals the balance in the control account. Common
examples include Accounts Receivable and Accounts Payable. The subsidiary ledger provides
details about a general ledger account. For example, the accounts receivable subsidiary ledger
provides details about the accounts receivable for each customer as far as amount paid, amount
unpaid, amount purchased on credit, and so on.
6. What is a control account?
A control account is a general ledger account whose balance equals the sum of the balances in a
group of related accounts in a subsidiary ledger.
B-1
