Solutions Manual For Accounting Information Systems The Crossroads of
Accounting and IT 2e Donna Kay Ali Ovlia
Active Review
1.1 Refer to the chapter opener, Meet Business Intelligence. In your opinion, how can business i
ntelligence create value using the accounting system?
Students’ opinion may differ. However, their opinion should include: Increase profitability, impr
ove customer relationship, increase sales by targeting the right customer category, and in general
improving all aspects of business activities.
1.2 Refer to the chapter opener, Meet Business Intelligence. Discuss the importance of sal
es data in creating business intelligence for an organization.
Business intelligence allows organization to continuously monitor their sales transaction. By mo
nitoring sales, enterprise can fine-
tune other business processes such as purchasing, production, advertising, and customer servic
e.
1.3 Pick your favorite Accounting Insight from Chapter 1. Discuss why it’s your favorite.
The answer to this question depends on the student selection and his/her reason for selecting it.
1.4 What are the modules in the baseline accounting system model? Discuss the purposes and tr
ansactions associated with each module.
1. Vendors. This module encapsulates all data and business processes related to vendors. The tra
nsactions associated with Vendors module are: Create purchase Order, Receive Items, and Ent
er Bills.
2. Customers. This module encapsulates all data and business processes related to customers. The
processes associa ted with Customers module are: Create Invoice, and Receive Customer Pay
ments.
3. Employees. This module encapsulates all data and business processes related to employees. Th
e processes associated with Vendor module are: Enter Time and Calculate Payroll.
4. Banking. This module encapsulates all data and business processes related to organization ban
king. The processes associated with Banking module are: Pay Bills, Make Deposit, Pay Empl
oyees, and Pay Payroll Liabilities.
5. Financials. This module encapsulates all data and business processes related to the organizatio
n financia ls. The processes associated with Financia l module are: Adjusting Entries, Correcting
Entries, Closing, and ad-hoc financial activities.
6. Reports. This module encapsula tes all data and business processes related to the accounting re
ports. The processes associa ted with Reports module are: Management Reports, Tax Reports,
External Financial Reports, and Sustainability Reports.
1.5 Discuss how the features of a spreadsheet and a database are similar and how they are different.
A spreadsheet shows rows and columns of a table and that is same as database table’s recor
ds and fields features. Actually, a spreadsheet row is a record and a column is a field in a
database table
1.6 Discuss the potential risks if a company’s accounting system is not well secured.
Unauthorized access to the accounting data and softwa re could result in valuable information bei
ng stolen or damaged and virus or other malicious software damage accounting systems softw
are.
1.7 Discuss the benefits of an integrated enterprise system.
,An integrated enterprise system allows data to be shared among various enterprise departments.
For example, a n a dvertising department can use data collected about sales to cluster customers
ww
into categories and target customers-categories with different adverting methods.
1.8 Discuss how value chain activities are related to accounting transaction cycles.
The value chain facilitates coordination of activities with suppliers and customers, including purch
asing and sales transactions.
1.9 Discuss the significance of information technology to the accounting professional.
Today, most accounting systems are computerized systems. These accounting systems are installe
d on the enterprise computers and used on the enterprise internal networks as well as the Inte
rnet. To effectively work with computers and use accounting systems, accountants must know
enough about computers and networks to be able to use computerized accounting systems.
1.10 Discuss problems that enterprises may experience with shadow data.
Shadow data little or lack of documentation and lack or inadequate security and control are two
major problems experienced by enterprises.
Key Terms Check
d 1.- An- organizing- framework- for- business- process-
1.11 Match the following terms and definiti
es,- beginning- with- vendors- and- ending- with- custome- rs
ons.
- - h- - 2. - Exchanges - or- transactions - between- an - enterpris -e-
a. enterprise system and- its- customers
b. integrated enterprise system e 3.- Accounting- transactions- related- to- specific- bus-
c. business processes iness- processes
d. value chain b 4.- Shares- data- across- functional- areas- within- the-
e. transaction- - cycles enterprise
f. purchasing- - cycle g 5.- Transactions- with- - employees
g. payroll- cycle c 6.- Related- activities- performed- by- an- enterprise-
h. sales- cycle to- create- value- by- transforming- input- into- output
i. baseline- - accounting- - system a 7.- A- system- that- - supports- business- activities- thro
ughout- the- enterprise,- including- inputs,- processing,- a-
nd- outputs
f 8.- Transactions- related- to- purchasing- items- - from w
vendors
i- - 9.- A- model- that- provides- an- enterprise-
wide- view- of- the- firm’s- accounting- system
, f 1.-A-module- that-relates-to-output-from-the-ac-counting-
1.12 Match- the- following- terms- and- definiti-
system.
ons.
e 2.- A- module- that- includes- adjusting- and- correct-ing-
a. vendors- module entries.
b. customers- - module a 3.- A- module- related- to- purchasing- goods- and- services.- d-
c. employees- - module - - 4. - A- module- that- involves- cash - received- and- cash- paid.-c- - -
d. banking- module 5.- A- module- related- to- the- payroll- cycle.
e. financial- module b 6.- A- module- related- to- selling- the- customer- a-
f. reports- module product- or- service.
g. adjusting- - entries m 7.- Reports- used- - to- - evaluate- an- enterprise’s- sus
h. correcting- entries tainability- performance.
i. closing- entries k 8.- Reports- used- when- filing- federal,- state,- and-
j. financial- - reports local- returns.
k. tax- reports l 9.- Reports- prepared- to- assist- managers- in- maki - ng-
l. management- - reports decisions.
m. sustainability- - reports j 10.- Reports- that- include- a- company’s- income-
statement,- balance- sheet,- and- statement- of- cash- flows.
g 11.- Entries- to- - bring- accounts- up- - to- date- at- year- end.
i 12.- Zeros- out- income- and- expense- accounts- at-
year- end.
h 13.- Entries- to- correct- errors.
, c 1.- A- unique- identifier- for- each- record.
1.13 Match- the- following- terms- and- definiti-
g 2.- An- online- application- that- permits- users- to-
ons.
view- data- in- a- multidimensional- way.
a. field b 3.- A- collection- - of- - related- - database- fields.- f
b. record 4.Data- analytics- and- predictive- modeling- used
c. primary- - key to- gain- insights- from- data- to- improve- the- quality- o-f-
d. relational- - database business- decisions.
e. operational- - database a 5.- A- piece- of- information.
f. business- intelligence e 6.- A- database- that- stores- transactions- related- t-o-
g. OLAP- cubes business- operations.
d 7.- A- collection- - of- - related- - database- tables.
g 1.- A- framework- for- organizing- the- complex,-
1.14 Match- the- following- terms- and- definiti-
multifaceted- undertaking- of- developing- a- system.
ons.
k 2.- Includes- testing- databases- and- computer- prog-
a. people rams- for- the- new- system.
b. processes h 3.- Includes- scheduling,- budgeting,- and- staffing-
c. technology a- project.
d. information- - technology- - (IT) i 4.- Includes- evaluating- new- system- - requirements.
e. IT- architecture m 5.- Using- the- new- system- on- an- ongoing- basis - w
f. IT- infrastructure and- maintaining- and- updating- it- as- necessary.
g. system- development- life- cycle- (SDLC) l 6.- Setting- up- new- IT- hardware,- software,- and
h. plan databases.
i. analyze j 7.- Prepare- models- for- business- processes- and- d-
j. design atabases- for- the- new- system.
k. build/buy b 8.- One- of- the- three- keys- of- opportunity- that- f-
l. install ocuses- on- how- business- activities- are- impacted.
m. deploy c 9.- One- of- the- three- keys- of- opportunity- that- f-
ocuses- on- software,- hardware,- and- networks.
a 10.- One- of- the- three- keys- of- opportunity- that
focuses- on- how- employees,- customers,- and- vendors-are-
impacted.
d 11.- Consists- of- software,- hardware,- - and- - networ
k technology- - used- by- an- organization.
f 12.- How- specific- software,- hardware- and- netwo-
rks- are- used- to- build- IT- architecture- for- an- enterpri-se.
e 13.- The- design- or- blueprint- for- an- enterprise’s
information- - technology.
Practice Test -
1.15 In- addition- to- - accounting- systems,- which- of- the- following- are- member- of- enterprise- - systems?
a. SCM- and- OPS
b. CRM- and- - SCM
c. HRM- and- - Financial
d. SCM,- OPS,- CRM,- and- HR- (Correct- Answer)
1.16 The- value- chain- is- useful- for:
a. Coordinating- - accounting- - system- - activities.
b. Coordinating- activities- with- suppliers- and- customers- (Correct- Answer)
Accounting and IT 2e Donna Kay Ali Ovlia
Active Review
1.1 Refer to the chapter opener, Meet Business Intelligence. In your opinion, how can business i
ntelligence create value using the accounting system?
Students’ opinion may differ. However, their opinion should include: Increase profitability, impr
ove customer relationship, increase sales by targeting the right customer category, and in general
improving all aspects of business activities.
1.2 Refer to the chapter opener, Meet Business Intelligence. Discuss the importance of sal
es data in creating business intelligence for an organization.
Business intelligence allows organization to continuously monitor their sales transaction. By mo
nitoring sales, enterprise can fine-
tune other business processes such as purchasing, production, advertising, and customer servic
e.
1.3 Pick your favorite Accounting Insight from Chapter 1. Discuss why it’s your favorite.
The answer to this question depends on the student selection and his/her reason for selecting it.
1.4 What are the modules in the baseline accounting system model? Discuss the purposes and tr
ansactions associated with each module.
1. Vendors. This module encapsulates all data and business processes related to vendors. The tra
nsactions associated with Vendors module are: Create purchase Order, Receive Items, and Ent
er Bills.
2. Customers. This module encapsulates all data and business processes related to customers. The
processes associa ted with Customers module are: Create Invoice, and Receive Customer Pay
ments.
3. Employees. This module encapsulates all data and business processes related to employees. Th
e processes associated with Vendor module are: Enter Time and Calculate Payroll.
4. Banking. This module encapsulates all data and business processes related to organization ban
king. The processes associated with Banking module are: Pay Bills, Make Deposit, Pay Empl
oyees, and Pay Payroll Liabilities.
5. Financials. This module encapsulates all data and business processes related to the organizatio
n financia ls. The processes associated with Financia l module are: Adjusting Entries, Correcting
Entries, Closing, and ad-hoc financial activities.
6. Reports. This module encapsula tes all data and business processes related to the accounting re
ports. The processes associa ted with Reports module are: Management Reports, Tax Reports,
External Financial Reports, and Sustainability Reports.
1.5 Discuss how the features of a spreadsheet and a database are similar and how they are different.
A spreadsheet shows rows and columns of a table and that is same as database table’s recor
ds and fields features. Actually, a spreadsheet row is a record and a column is a field in a
database table
1.6 Discuss the potential risks if a company’s accounting system is not well secured.
Unauthorized access to the accounting data and softwa re could result in valuable information bei
ng stolen or damaged and virus or other malicious software damage accounting systems softw
are.
1.7 Discuss the benefits of an integrated enterprise system.
,An integrated enterprise system allows data to be shared among various enterprise departments.
For example, a n a dvertising department can use data collected about sales to cluster customers
ww
into categories and target customers-categories with different adverting methods.
1.8 Discuss how value chain activities are related to accounting transaction cycles.
The value chain facilitates coordination of activities with suppliers and customers, including purch
asing and sales transactions.
1.9 Discuss the significance of information technology to the accounting professional.
Today, most accounting systems are computerized systems. These accounting systems are installe
d on the enterprise computers and used on the enterprise internal networks as well as the Inte
rnet. To effectively work with computers and use accounting systems, accountants must know
enough about computers and networks to be able to use computerized accounting systems.
1.10 Discuss problems that enterprises may experience with shadow data.
Shadow data little or lack of documentation and lack or inadequate security and control are two
major problems experienced by enterprises.
Key Terms Check
d 1.- An- organizing- framework- for- business- process-
1.11 Match the following terms and definiti
es,- beginning- with- vendors- and- ending- with- custome- rs
ons.
- - h- - 2. - Exchanges - or- transactions - between- an - enterpris -e-
a. enterprise system and- its- customers
b. integrated enterprise system e 3.- Accounting- transactions- related- to- specific- bus-
c. business processes iness- processes
d. value chain b 4.- Shares- data- across- functional- areas- within- the-
e. transaction- - cycles enterprise
f. purchasing- - cycle g 5.- Transactions- with- - employees
g. payroll- cycle c 6.- Related- activities- performed- by- an- enterprise-
h. sales- cycle to- create- value- by- transforming- input- into- output
i. baseline- - accounting- - system a 7.- A- system- that- - supports- business- activities- thro
ughout- the- enterprise,- including- inputs,- processing,- a-
nd- outputs
f 8.- Transactions- related- to- purchasing- items- - from w
vendors
i- - 9.- A- model- that- provides- an- enterprise-
wide- view- of- the- firm’s- accounting- system
, f 1.-A-module- that-relates-to-output-from-the-ac-counting-
1.12 Match- the- following- terms- and- definiti-
system.
ons.
e 2.- A- module- that- includes- adjusting- and- correct-ing-
a. vendors- module entries.
b. customers- - module a 3.- A- module- related- to- purchasing- goods- and- services.- d-
c. employees- - module - - 4. - A- module- that- involves- cash - received- and- cash- paid.-c- - -
d. banking- module 5.- A- module- related- to- the- payroll- cycle.
e. financial- module b 6.- A- module- related- to- selling- the- customer- a-
f. reports- module product- or- service.
g. adjusting- - entries m 7.- Reports- used- - to- - evaluate- an- enterprise’s- sus
h. correcting- entries tainability- performance.
i. closing- entries k 8.- Reports- used- when- filing- federal,- state,- and-
j. financial- - reports local- returns.
k. tax- reports l 9.- Reports- prepared- to- assist- managers- in- maki - ng-
l. management- - reports decisions.
m. sustainability- - reports j 10.- Reports- that- include- a- company’s- income-
statement,- balance- sheet,- and- statement- of- cash- flows.
g 11.- Entries- to- - bring- accounts- up- - to- date- at- year- end.
i 12.- Zeros- out- income- and- expense- accounts- at-
year- end.
h 13.- Entries- to- correct- errors.
, c 1.- A- unique- identifier- for- each- record.
1.13 Match- the- following- terms- and- definiti-
g 2.- An- online- application- that- permits- users- to-
ons.
view- data- in- a- multidimensional- way.
a. field b 3.- A- collection- - of- - related- - database- fields.- f
b. record 4.Data- analytics- and- predictive- modeling- used
c. primary- - key to- gain- insights- from- data- to- improve- the- quality- o-f-
d. relational- - database business- decisions.
e. operational- - database a 5.- A- piece- of- information.
f. business- intelligence e 6.- A- database- that- stores- transactions- related- t-o-
g. OLAP- cubes business- operations.
d 7.- A- collection- - of- - related- - database- tables.
g 1.- A- framework- for- organizing- the- complex,-
1.14 Match- the- following- terms- and- definiti-
multifaceted- undertaking- of- developing- a- system.
ons.
k 2.- Includes- testing- databases- and- computer- prog-
a. people rams- for- the- new- system.
b. processes h 3.- Includes- scheduling,- budgeting,- and- staffing-
c. technology a- project.
d. information- - technology- - (IT) i 4.- Includes- evaluating- new- system- - requirements.
e. IT- architecture m 5.- Using- the- new- system- on- an- ongoing- basis - w
f. IT- infrastructure and- maintaining- and- updating- it- as- necessary.
g. system- development- life- cycle- (SDLC) l 6.- Setting- up- new- IT- hardware,- software,- and
h. plan databases.
i. analyze j 7.- Prepare- models- for- business- processes- and- d-
j. design atabases- for- the- new- system.
k. build/buy b 8.- One- of- the- three- keys- of- opportunity- that- f-
l. install ocuses- on- how- business- activities- are- impacted.
m. deploy c 9.- One- of- the- three- keys- of- opportunity- that- f-
ocuses- on- software,- hardware,- and- networks.
a 10.- One- of- the- three- keys- of- opportunity- that
focuses- on- how- employees,- customers,- and- vendors-are-
impacted.
d 11.- Consists- of- software,- hardware,- - and- - networ
k technology- - used- by- an- organization.
f 12.- How- specific- software,- hardware- and- netwo-
rks- are- used- to- build- IT- architecture- for- an- enterpri-se.
e 13.- The- design- or- blueprint- for- an- enterprise’s
information- - technology.
Practice Test -
1.15 In- addition- to- - accounting- systems,- which- of- the- following- are- member- of- enterprise- - systems?
a. SCM- and- OPS
b. CRM- and- - SCM
c. HRM- and- - Financial
d. SCM,- OPS,- CRM,- and- HR- (Correct- Answer)
1.16 The- value- chain- is- useful- for:
a. Coordinating- - accounting- - system- - activities.
b. Coordinating- activities- with- suppliers- and- customers- (Correct- Answer)
