Solutions Manual For Accounting Information Systems The Crossroads of
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Accounting and IT 2e Donna Kay Ali Ovlia
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ActiveReviewj
1.1 Referjtojthejchapterjopener,jMeetjBusinessjIntelligence.jInjyourjopinion,jhowjcanjbusinessjintelligencejcre
atejvaluejusingjthejaccountingjsystem?
Students’jopinionjmayjdiffer.jHowever,jtheirjopinionjshouldjinclude:jIncreasejprofitability,jimprovejcustome
rjrelationship,jincreasejsalesjbyjtargetingjthejrightjcustomerjcategory,jandjinjgeneraljimprovingjalljaspectsjofjb
usinessjactivities.
1.2 Referjtojthejchapterjopener,jMeetjBusinessjIntelligence.jDiscussjthejimportancejofjsalesjdatajinjcre
atingjbusinessjintelligencejforjanjorganization.
Businessjintelligencejallowsjorganizationjtojcontinuouslyjmonitorjtheirjsalesjtransaction.jByjmonitoringjsal
es,jenterprisejcanjfine-
tunejotherjbusinessjprocessesjsuchjasjpurchasing,jproduction,jadvertising,jandjcustomerjservice.
1.3 PickjyourjfavoritejAccountingjInsightjfromjChapterj1.jDiscussjwhyjit’sjyourjfavorite.
Thejanswerjtojthisjquestionjdependsjonjthejstudentjselectionjandjhis/herjreasonjforjselectingjit.
1.4 Whatjarejthejmodulesjinjthejbaselinejaccountingjsystemjmodel?jDiscussjthejpurposesjandjtransactionsjass
ociatedjwithjeachjmodule.
1. Vendors.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojvendors.jThejtransactionsjasso
ciatedjwithjVendorsjmodulejare:jCreatejpurchasejOrder,jReceivejItems,jandjEnterjBills.
2. Customers.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojcustomers.jThej processesjas
sociatedjwithjCustomersjmodulejare:jCreatejInvoice,jandjReceivejCustomerjPayments.
3. Employees.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojemployees.jThejprocessesja
ssociatedjwithjVendorjmodulejare:jEnterjTimejandjCalculatejPayroll.
4. Banking.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojorganizationjbanking.jThejpro
cessesjassociatedjwithjBankingjmodulejare:jPayjBills,jMakejDeposit,jPayjEmployees,jandjPayjPayrolljLiabi
lities.
5. Financials.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojthejorganizationjfinancials.jT
hejprocessesjassociatedjwithjFinancialjmodulejare:jAdjustingjEntries,jCorrectingjEntries,jClosing,jandjad-
hocjfinancialjactivities.
6. Reports.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojthejaccountingjreports.jThejpro
cessesjassociatedjwithjReportsjmodulejare:jManagementjReports,jTaxjReports,jExternaljFinancialjReports,j
andjSustainabilityjReports.
1.5 Discussjhowjthejfeaturesjofjajspreadsheetjandjajdatabasejarejsimilarjandjhowjtheyjarejdifferent.
Ajspreadsheetjshowsjrowsjandjcolumnsjofjajtablejandjthatjisjsamejasjdatabasejtable’sjrecordsjandjfieldsjfeatu
res.jActually,jajspreadsheetjrowjisjajrecordjandjajcolumnjisjajfieldjinjajdatabasejtable
1.6 Discussjthejpotentialjrisksjifjajcompany’sjaccountingjsystemjisjnotjwelljsecured.
Unauthorizedjaccessjtojthejaccountingjdatajandjsoftwarejcouldjresultjinjvaluablejinformationjbeingjstolenjorjd
amagedjandjvirusjorjotherjmaliciousjsoftwarejdamagejaccountingjsystemsjsoftware.
1.7 Discussjthejbenefitsjofjanjintegratedjenterprisejsystem.
,Anjintegratedjenterprisejsystemjallowsjdatajtojbejsharedjamongjvariousjenterprisejdepartments.jForjexample,j
anjadvertisingjdepartmentjcanjusejdatajcollectedjaboutjsalesjtojclusterjcustomersjintojcategoriesjandjtargetjcust
omers-categoriesjwithjdifferentjadvertingjmethods.
1.8 Discussjhowjvaluejchainjactivitiesjarejrelatedjtojaccountingjtransactionjcycles.
Thejvaluejchainjfacilitatesjcoordinationjofjactivitiesjwithjsuppliersjandjcustomers,jincludingjpurchasingjandjsa
lesjtransactions.
1.9 Discussjthejsignificancejofjinformationjtechnologyjtojthejaccountingjprofessional.
Today,jmostjaccountingjsystemsjarejcomputerizedjsystems.jThesejaccountingjsystemsjarejinstalledjonjthejente
rprisejcomputersjandjusedjonjthejenterprisejinternaljnetworksjasjwelljasjthejInternet.jTojeffectivelyjworkjwithj
computersjandjusejaccountingjsystems,jaccountantsjmustjknowjenoughjaboutjcomputersjandjnetworksjtojbeja
blejtojusejcomputerizedjaccountingjsystems.
1.10 Discussjproblemsjthatjenterprisesjmayjexperiencejwithjshadowjdata.
Shadowjdatajlittlejorjlackjofjdocumentationjandjlackjorjinadequatejsecurityjandjcontroljarejtwojmajorjproblems
jexperienced jbyjenterprises.
Key Terms Check
j j
dj 1.jAnjorganizingjframeworkjforjbusinessjprocesses,jbegin
1.11 Matchjthejfollowingjtermsjandjdefinitions.
j
ningjwithjvendorsjandjendingjwithjcustomers
a. enterprisejsystem
j hj 2.jExchangesjorjtransactionsjbetweenjanjenterprisejandjitsjc
b. integratedjenterprisejsystem
ustomers
c. businessjprocesses
j ej 3.jAccountingjtransactionsjrelatedjtojspecific jbusinessjpro
d. valuejchain
cesses
e. transactionjcycles
j bj 4.jSharesjdatajacrossjfunctionaljareasjwithinjthejenterprise
f. purchasingjcycle
j gj 5.jTransactionsjwithjemployees
g. payrolljcycle
j cj 6.jRelated jactivitiesjperformedjbyjanjenterprisejtojcreatejv
h. salesjcycle
aluejbyjtransformingjinputjintojoutput
i. baselinejaccountingjsystem
j aj 7.jAjsystemjthatjsupportsjbusinessjactivitiesjthroughout jth
ejenterprise,jincludingjinputs,jprocessing,jandjoutputs
j fj 8.jTransactionsjrelatedjtojpurchasingjitemsjfromjvendors
j ij 9.jAjmodeljthatjprovidesjanjenterprise-
widejviewjofjthejfirm’sjaccountingjsystem
, f 1.jAjmodulejthatjrelatesjtojoutputjfromjthejaccountingjsyst
1.12 Matchjthejfollowingjtermsjandjdefinitions.
j jj
em.
a. vendorsjmodule
j ej j2.jAjmodulejthatjincludesjadjustingjand jcorrectingjentries.
b. customersjmodule
j aj j3.jAjmodulejrelatedjtojpurchasingjgoodsjand jservices.
c. employeesjmodule
j dj j4.jAjmodulejthatjinvolvesjcashjreceivedjand jcashjpaid.
d. bankingjmodule
j cj j5.jAjmodulejrelatedjto jthejpayrolljcycle.
e. financialjmodule
j bj j6.jAjmodulejrelatedjtojsellingjthejcustomerjajproductjorjs
f. reportsjmodule
ervice.
g. adjustingjentries
j mj j7.jReportsjusedjtojevaluate janjenterprise’s jsustainabilityj
h. correctingjentries
performance.
i. closingjentries
j kj j8.jReportsjusedjwhenjfilingjfederal,jstate, jandjlocaljreturns
j. financialjreports
.
k. taxjreports
j lj j9.jReportsjpreparedjtojassistjmanagersjinjmakingjdecisions
l. managementjreports
.
m. sustainabilityjreports
j jj j 10.jReportsjthatjinclude jajcompany’s jincomejstatement,jb
alancejsheet,jandjstatementjofjcashjflows.
j gj j11.jEntriesjtojbringjaccountsjup jtojdate jatjyear jend.
j ij j12.jZerosjoutjincomejandjexpensejaccountsjatjyearjend.
j hj j13.jEntriesjtojcorrectjerrors.
, cj j1.jAjuniquejidentifierjforjeachjrecord.
1.13 Matchjthejfollowingjtermsjandjdefinitions.
j
j gj j2.jAnjonlinejapplicationjthatjpermitsjusersjtojviewjdatajin
a. field
jajmultidimensional jway.
b. record
j bj j3.jAjcollectionjofjrelatedjdatabasejfields.
c. primaryjkey
j fj j4.Datajanalyticsjandjpredictivejmodelingjusedjtojgainjins
d. relationaljdatabase
ightsjfromjdatajtojimprovejthejqualityjofjbusinessjdecisions
e. operationalj database
.
f. businessjintelligence
j aj j5.jAjpiece jofjinformation.
g. OLAPjcubes
j ej j6.jAjdatabasejthatjstoresjtransactions jrelated jtojbusinessj
operations.
j dj j7.jAjcollectionjofjrelatedjdatabasejtables.
gj j1.jAjframeworkjforjorganizingjthejcomplex,jmultifacetedj
1.14 Matchjthejfollowingjtermsjandjdefinitions.
j
undertakingjofjdevelopingjajsystem.
a. people
j kj j2.jIncludesjtestingjdatabasesjandjcomputer jprogramsjforjt
b. processes
hejnewjsystem.
c. technology
j hj j3.jIncludesjscheduling,jbudgeting,jandjstaffingjajproject.
d. informationjtechnologyj(IT)
j ij j4.jIncludesjevaluatingjnewjsystemjrequirements.
e. ITjarchitecture
j mj j5.jUsingjthejnewjsystemjonjanjongoingjbasisjand jmaintai
f. ITjinfrastructure
ningjandjupdatingjitjasjnecessary.
g. systemjdevelopmentjlifejcyclej(SDLC)
j lj j6.jSettingjupjnewjIT jhardware,jsoftware,jandjdatabases.
h. plan
j jj j7. jPreparejmodelsjforjbusinessjprocessesjandjdatabasesjforj
i. analyze
thejnewjsystem.
j. design
j bj j8.jOnejofjthejthreejkeysjofjopportunityjthatjfocusesjonjho
k. build/buy
wjbusinessjactivitiesjarejimpacted.
l. install
j cj j9.jOnejofjthejthreejkeysjofjopportunityjthatjfocusesjonjsoft
m. deploy
ware,jhardware,jandjnetworks.
j aj j10.jOnejofjthejthreejkeysjofjopportunityjthatjfocusesjonjh
owjemployees,jcustomers,jandjvendorsjarejimpacted.
j dj j11.jConsistsjofjsoftware,jhardware,jandjnetworkjtechnolo
gyjusedjbyjanjorganization.
j fj j12.jHowjspecificjsoftware,jhardwarejandjnetworksjarejuse
djtojbuildjITjarchitecturejforjanjenterprise.
j ej j13.jThejdesignjorjblueprintjforjanjenterprise’s jinformationj
technology.
Practice Test j
1.15 Injadditionjtojaccountingjsystems,jwhichjofjthejfollowingjarejmemberjofjenterprisejsystems?
a. SCMjandjOPS
b. CRMjandjSCM
c. HRMjandjFinancial
d. SCM,jOPS,jCRM,jandjHRj(CorrectjAnswer)
1.16 Thejvaluejchainjisjusefuljfor:
a. Coordinatingjaccountingj systemjactivities.
b. Coordinatingjactivitiesjwithjsuppliersjandjcustomersj(CorrectjAnswer)
c. Linkingjbusinessjvaluesjlikejajchain.
d. Everythingjwejdojinjajbusiness.
j j j j j j j j j
Accounting and IT 2e Donna Kay Ali Ovlia
j j j j j j j
ActiveReviewj
1.1 Referjtojthejchapterjopener,jMeetjBusinessjIntelligence.jInjyourjopinion,jhowjcanjbusinessjintelligencejcre
atejvaluejusingjthejaccountingjsystem?
Students’jopinionjmayjdiffer.jHowever,jtheirjopinionjshouldjinclude:jIncreasejprofitability,jimprovejcustome
rjrelationship,jincreasejsalesjbyjtargetingjthejrightjcustomerjcategory,jandjinjgeneraljimprovingjalljaspectsjofjb
usinessjactivities.
1.2 Referjtojthejchapterjopener,jMeetjBusinessjIntelligence.jDiscussjthejimportancejofjsalesjdatajinjcre
atingjbusinessjintelligencejforjanjorganization.
Businessjintelligencejallowsjorganizationjtojcontinuouslyjmonitorjtheirjsalesjtransaction.jByjmonitoringjsal
es,jenterprisejcanjfine-
tunejotherjbusinessjprocessesjsuchjasjpurchasing,jproduction,jadvertising,jandjcustomerjservice.
1.3 PickjyourjfavoritejAccountingjInsightjfromjChapterj1.jDiscussjwhyjit’sjyourjfavorite.
Thejanswerjtojthisjquestionjdependsjonjthejstudentjselectionjandjhis/herjreasonjforjselectingjit.
1.4 Whatjarejthejmodulesjinjthejbaselinejaccountingjsystemjmodel?jDiscussjthejpurposesjandjtransactionsjass
ociatedjwithjeachjmodule.
1. Vendors.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojvendors.jThejtransactionsjasso
ciatedjwithjVendorsjmodulejare:jCreatejpurchasejOrder,jReceivejItems,jandjEnterjBills.
2. Customers.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojcustomers.jThej processesjas
sociatedjwithjCustomersjmodulejare:jCreatejInvoice,jandjReceivejCustomerjPayments.
3. Employees.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojemployees.jThejprocessesja
ssociatedjwithjVendorjmodulejare:jEnterjTimejandjCalculatejPayroll.
4. Banking.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojorganizationjbanking.jThejpro
cessesjassociatedjwithjBankingjmodulejare:jPayjBills,jMakejDeposit,jPayjEmployees,jandjPayjPayrolljLiabi
lities.
5. Financials.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojthejorganizationjfinancials.jT
hejprocessesjassociatedjwithjFinancialjmodulejare:jAdjustingjEntries,jCorrectingjEntries,jClosing,jandjad-
hocjfinancialjactivities.
6. Reports.jThisjmodulejencapsulatesjalljdatajandjbusinessjprocessesjrelatedjtojthejaccountingjreports.jThejpro
cessesjassociatedjwithjReportsjmodulejare:jManagementjReports,jTaxjReports,jExternaljFinancialjReports,j
andjSustainabilityjReports.
1.5 Discussjhowjthejfeaturesjofjajspreadsheetjandjajdatabasejarejsimilarjandjhowjtheyjarejdifferent.
Ajspreadsheetjshowsjrowsjandjcolumnsjofjajtablejandjthatjisjsamejasjdatabasejtable’sjrecordsjandjfieldsjfeatu
res.jActually,jajspreadsheetjrowjisjajrecordjandjajcolumnjisjajfieldjinjajdatabasejtable
1.6 Discussjthejpotentialjrisksjifjajcompany’sjaccountingjsystemjisjnotjwelljsecured.
Unauthorizedjaccessjtojthejaccountingjdatajandjsoftwarejcouldjresultjinjvaluablejinformationjbeingjstolenjorjd
amagedjandjvirusjorjotherjmaliciousjsoftwarejdamagejaccountingjsystemsjsoftware.
1.7 Discussjthejbenefitsjofjanjintegratedjenterprisejsystem.
,Anjintegratedjenterprisejsystemjallowsjdatajtojbejsharedjamongjvariousjenterprisejdepartments.jForjexample,j
anjadvertisingjdepartmentjcanjusejdatajcollectedjaboutjsalesjtojclusterjcustomersjintojcategoriesjandjtargetjcust
omers-categoriesjwithjdifferentjadvertingjmethods.
1.8 Discussjhowjvaluejchainjactivitiesjarejrelatedjtojaccountingjtransactionjcycles.
Thejvaluejchainjfacilitatesjcoordinationjofjactivitiesjwithjsuppliersjandjcustomers,jincludingjpurchasingjandjsa
lesjtransactions.
1.9 Discussjthejsignificancejofjinformationjtechnologyjtojthejaccountingjprofessional.
Today,jmostjaccountingjsystemsjarejcomputerizedjsystems.jThesejaccountingjsystemsjarejinstalledjonjthejente
rprisejcomputersjandjusedjonjthejenterprisejinternaljnetworksjasjwelljasjthejInternet.jTojeffectivelyjworkjwithj
computersjandjusejaccountingjsystems,jaccountantsjmustjknowjenoughjaboutjcomputersjandjnetworksjtojbeja
blejtojusejcomputerizedjaccountingjsystems.
1.10 Discussjproblemsjthatjenterprisesjmayjexperiencejwithjshadowjdata.
Shadowjdatajlittlejorjlackjofjdocumentationjandjlackjorjinadequatejsecurityjandjcontroljarejtwojmajorjproblems
jexperienced jbyjenterprises.
Key Terms Check
j j
dj 1.jAnjorganizingjframeworkjforjbusinessjprocesses,jbegin
1.11 Matchjthejfollowingjtermsjandjdefinitions.
j
ningjwithjvendorsjandjendingjwithjcustomers
a. enterprisejsystem
j hj 2.jExchangesjorjtransactionsjbetweenjanjenterprisejandjitsjc
b. integratedjenterprisejsystem
ustomers
c. businessjprocesses
j ej 3.jAccountingjtransactionsjrelatedjtojspecific jbusinessjpro
d. valuejchain
cesses
e. transactionjcycles
j bj 4.jSharesjdatajacrossjfunctionaljareasjwithinjthejenterprise
f. purchasingjcycle
j gj 5.jTransactionsjwithjemployees
g. payrolljcycle
j cj 6.jRelated jactivitiesjperformedjbyjanjenterprisejtojcreatejv
h. salesjcycle
aluejbyjtransformingjinputjintojoutput
i. baselinejaccountingjsystem
j aj 7.jAjsystemjthatjsupportsjbusinessjactivitiesjthroughout jth
ejenterprise,jincludingjinputs,jprocessing,jandjoutputs
j fj 8.jTransactionsjrelatedjtojpurchasingjitemsjfromjvendors
j ij 9.jAjmodeljthatjprovidesjanjenterprise-
widejviewjofjthejfirm’sjaccountingjsystem
, f 1.jAjmodulejthatjrelatesjtojoutputjfromjthejaccountingjsyst
1.12 Matchjthejfollowingjtermsjandjdefinitions.
j jj
em.
a. vendorsjmodule
j ej j2.jAjmodulejthatjincludesjadjustingjand jcorrectingjentries.
b. customersjmodule
j aj j3.jAjmodulejrelatedjtojpurchasingjgoodsjand jservices.
c. employeesjmodule
j dj j4.jAjmodulejthatjinvolvesjcashjreceivedjand jcashjpaid.
d. bankingjmodule
j cj j5.jAjmodulejrelatedjto jthejpayrolljcycle.
e. financialjmodule
j bj j6.jAjmodulejrelatedjtojsellingjthejcustomerjajproductjorjs
f. reportsjmodule
ervice.
g. adjustingjentries
j mj j7.jReportsjusedjtojevaluate janjenterprise’s jsustainabilityj
h. correctingjentries
performance.
i. closingjentries
j kj j8.jReportsjusedjwhenjfilingjfederal,jstate, jandjlocaljreturns
j. financialjreports
.
k. taxjreports
j lj j9.jReportsjpreparedjtojassistjmanagersjinjmakingjdecisions
l. managementjreports
.
m. sustainabilityjreports
j jj j 10.jReportsjthatjinclude jajcompany’s jincomejstatement,jb
alancejsheet,jandjstatementjofjcashjflows.
j gj j11.jEntriesjtojbringjaccountsjup jtojdate jatjyear jend.
j ij j12.jZerosjoutjincomejandjexpensejaccountsjatjyearjend.
j hj j13.jEntriesjtojcorrectjerrors.
, cj j1.jAjuniquejidentifierjforjeachjrecord.
1.13 Matchjthejfollowingjtermsjandjdefinitions.
j
j gj j2.jAnjonlinejapplicationjthatjpermitsjusersjtojviewjdatajin
a. field
jajmultidimensional jway.
b. record
j bj j3.jAjcollectionjofjrelatedjdatabasejfields.
c. primaryjkey
j fj j4.Datajanalyticsjandjpredictivejmodelingjusedjtojgainjins
d. relationaljdatabase
ightsjfromjdatajtojimprovejthejqualityjofjbusinessjdecisions
e. operationalj database
.
f. businessjintelligence
j aj j5.jAjpiece jofjinformation.
g. OLAPjcubes
j ej j6.jAjdatabasejthatjstoresjtransactions jrelated jtojbusinessj
operations.
j dj j7.jAjcollectionjofjrelatedjdatabasejtables.
gj j1.jAjframeworkjforjorganizingjthejcomplex,jmultifacetedj
1.14 Matchjthejfollowingjtermsjandjdefinitions.
j
undertakingjofjdevelopingjajsystem.
a. people
j kj j2.jIncludesjtestingjdatabasesjandjcomputer jprogramsjforjt
b. processes
hejnewjsystem.
c. technology
j hj j3.jIncludesjscheduling,jbudgeting,jandjstaffingjajproject.
d. informationjtechnologyj(IT)
j ij j4.jIncludesjevaluatingjnewjsystemjrequirements.
e. ITjarchitecture
j mj j5.jUsingjthejnewjsystemjonjanjongoingjbasisjand jmaintai
f. ITjinfrastructure
ningjandjupdatingjitjasjnecessary.
g. systemjdevelopmentjlifejcyclej(SDLC)
j lj j6.jSettingjupjnewjIT jhardware,jsoftware,jandjdatabases.
h. plan
j jj j7. jPreparejmodelsjforjbusinessjprocessesjandjdatabasesjforj
i. analyze
thejnewjsystem.
j. design
j bj j8.jOnejofjthejthreejkeysjofjopportunityjthatjfocusesjonjho
k. build/buy
wjbusinessjactivitiesjarejimpacted.
l. install
j cj j9.jOnejofjthejthreejkeysjofjopportunityjthatjfocusesjonjsoft
m. deploy
ware,jhardware,jandjnetworks.
j aj j10.jOnejofjthejthreejkeysjofjopportunityjthatjfocusesjonjh
owjemployees,jcustomers,jandjvendorsjarejimpacted.
j dj j11.jConsistsjofjsoftware,jhardware,jandjnetworkjtechnolo
gyjusedjbyjanjorganization.
j fj j12.jHowjspecificjsoftware,jhardwarejandjnetworksjarejuse
djtojbuildjITjarchitecturejforjanjenterprise.
j ej j13.jThejdesignjorjblueprintjforjanjenterprise’s jinformationj
technology.
Practice Test j
1.15 Injadditionjtojaccountingjsystems,jwhichjofjthejfollowingjarejmemberjofjenterprisejsystems?
a. SCMjandjOPS
b. CRMjandjSCM
c. HRMjandjFinancial
d. SCM,jOPS,jCRM,jandjHRj(CorrectjAnswer)
1.16 Thejvaluejchainjisjusefuljfor:
a. Coordinatingjaccountingj systemjactivities.
b. Coordinatingjactivitiesjwithjsuppliersjandjcustomersj(CorrectjAnswer)
c. Linkingjbusinessjvaluesjlikejajchain.
d. Everythingjwejdojinjajbusiness.
