AIS EXAM 1 | 2023 WITH COMPLETE SOLUTION

AIS EXAM 1 | 2023 WITH COMPLETE SOLUTION What is the difference between info and data? - info is data that has been organized and processed to provide meaning and improve the decision-making process (output) Difference b/w goal congruence and goal conflict? - Goal congruence is when a sub system achieves its goals while contributing to the organization overall goal Goal Conflict is when a subsystem's goals are inconsistent with the goals of another subsystem or the system as a whole Value of information? - value of information is the benefit produced by the information minus the cost of producing it what is a transaction? - a transaction is an agreement b/w two entities to exchange goods or services what is the business cycle - : set of related, coordinated, and structured activities and task that are performed by a person or a computer and that help accomplish a specific organizational goal Name 3 or the 6 components of an accounting information system? - 1) people 2) pricedures 3) data 4) software 5) information technology infrastructure 6) internal controls and security measures overall objective of an AIS - to produce information for decision makers relationship b/w corporate strategy and the AIS? - organizational culture ---> business strategy ---> information technology = AIS Do all companies use the same module on an AIS - No. different industries need different modules as of companies of different sizes Who owns the AIS in an organization? - Accounting department. Difference between reliable and relevant information? - Relevant- reduces uncertainty, improves decision making, or confirms or corrects prior expectations Reliable- free from error or bias, accurate. Difference between complete and verifiable - Complete- doesn't omit aspects of events Verifiable- 2 independent. Knowledgeable people produces the same info. Difference b/w timely and understandable? - Timely-provided in time for decision makers to make decisions Understandable- presented in a useful intelligible format What does it mean if information is accessible? - Info available in a format that can be used. Most data captured in an AIS for internal external use? - Internal- think of all reports management used to run the business External- 3 ways, balance sheet, income statement, statement of cash flow Give-get in the revenue cycle? - give- goods/services Get- cash Give-get expenditure cycle? - Give- cash Get- goods/services Give-get payroll? - Give- cash Get- labor Give-get production? - Give- labor, raw materials Get- finished goods Give-get financing cycle? - Give- cash Get- cash Supply chain Value chain? - • Inbound logistics • Operations • Outbound logistics • Marketing and sales • Service Support Activities in an organizations value chain? - • Organization infrastructure • Purchasing • Human resources • Technology How can AIS improve decision making? - • Identify situations requiring management action • Recue uncertainty and thereby provide a basis for choosing among alternative actions • Store information about the results of previous decisions, which provides valuable feedback that can be used to improve future decisions • Provide accurate information in a timely manner • Analyze data Basic supply chain? - • Raw material supplier • Manufacturer • Distributor • Retailor • Consumer What data needs to be collected about each business activity? - • Types of activity (sales of inventory) • Resources affected by the activity (cash and inventory) • People/entities participating in activity (salespersons and customer) List what data would be captured on a sales transaction in a grocery store. - • Date and time of day the sale • Store number • Employee who made the sale and the cashier who processed the sale • Checkout register where the sale was processed • Item(s) sold • Quantity of each item sold • List price and actual price of each item sold • Total amount of the sale What is the difference between a source document and a turnaround document and give an example of each? - Source document- document used to capture transaction data at its source when the transaction takes place • W4 • Time sheet Turnaround document- document sent to an external party and then returned by the external party • Remittance (bottom of the bill) Data Process - •Capture transaction •Verify captured data are accurate and complete •Ensure company policies are followed What is CRUD? - •Create, such as adding a new employee •Read data previously stored •Update data, such as changing a customer's credit limit when their financial situation changes •Delete data, such as purging the inventory file of items no longer offered for sale What is batch processing? - Accumulating source documents into groups or batches for processing at a regular internal such as daily or weekly. Documents are all entered at one time. Ex. Bank lockbox What is online real-time processing? - Processing individual transactions as they occur and immediately updating all related files. Ex. Customer address changes With today's faster computers, why would a company still use batch processing? - •Efficiency- companies do not want to process and print one payroll check at a time as a time sheet is entered. •Control- by counting all customer payments before posting them to the customer accounts, the clerk is assured that all payments have been posted. What is the normal high level order of accounts in a chart of accounts? - •Current assets (1) •Noncurrent assets (2) •Liabilities (3) •Equity (4) •Revenue (5) •Expenses (6,7) •Summary accounts (8) What is the difference in use of the general ledger and a subsidiary ledger? - General ledger contains summary-level data for every asset, liability, equity, revenue, and expense account of the organization Subsidiary ledger records all the detailed data for any general ledger account that has many individual subaccounts (generally one per cycle) •Revenue- customers •Expenditures- vendors •Production- inventory, items •Payroll/HR- employees What is the difference in use of the general journal and a specialized journal? - General Journal- infrequent non-routine trxs (loan pmts, adjusting and closing entries) Specialized Journal