...(Romney/Steinbart) Chapter 1 Accounting Information Systems: An Overview 1.1 Distinguish data from information, discuss the characteristics of useful information, and explain how to determine the value of information. 1) Which of the following statements below shows the contrast between data and information? A) Data is the output of an AIS. B) Information is the primary output of an AIS. C) Data is more useful in decision making than information. D) Data and information are the same. Answer: B Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic 2) Information is best described as A) raw facts about transactions. B) data that has been organized and processed so that it is meaningful to the user. C) facts that are useful when processed in a timely manner. D) the same thing as data. Answer: B Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic 3) The value of information can best be determined by A) its usefulness to decision makers. B) its relevance to decision makers. C) the benefits associated with obtaining the information minus the cost of producing it. D) the extent to which it optimizes the value chain. Answer: C Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic 4) An accounting information system (AIS) processes ________ to provide users with ________. A) data; information B) data; transactions C) information; data D) data; benefits Answer: A Objective: Learning Objective 1 Difficulty:...
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...Accounting Information Systems, 12e (Romney/Steinbart) Chapter 1 Accounting Information Systems: An Overview 1) Which of the following statements below shows the contrast between data and information? A) Data is the output of an AIS. B) Information is the primary output of an AIS. C) Data is more useful in decision-making than information. D) Data and information are the same. Answer: B Page Ref: 4 Objective: Learning Objective 1 Difficulty : Easy AACSB: Analytic 2) Information is A) basically the same as data. B) raw facts about transactions. C) potentially useful facts when processed in a timely manner. D) data that has been organized and processed so that it's meaningful. Answer: D Page Ref: 4 Objective: Learning Objective 1 Difficulty : Easy AACSB: Analytic 3) The value of information can best be defined as A) how useful it is to decision makers. B) the benefits produced by possessing and using the information minus the cost of producing it. C) how relevant it is. D) the extent to which it maximizes the value chain. Answer: B Page Ref: 4 Objective: Learning Objective 1 Difficulty : Moderate AACSB: Analytic 4) An accounting information system (AIS) processes ________ to provide users with ________. A) data; information B) data; transactions C) information; data D) data; benefits Answer: A Page Ref: 10 Objective: Learning Objective 1 Difficulty : Easy AACSB: Analytic 5) Information that reduces uncertainty...
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...Accounting cycle can be defined as a sequence or process that is involved in completing the accounting process. Accounting cycle also refers to traditional procedures that performed by the company in order to record all the business transactions during the accounting periods. There are several sequences includes in the accounting cycle such as identifying, collecting and analyzing documents and business transactions, records the process in journals, posting the journalized amounts to ledger, preparing the trial balances and financial statements. Usually, an accounting cycle of the company begins when a business transaction take place and finishes the accounting cycle when the financial statements are prepared. The period of the accounting...
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...Chapter 1 - Accounting Information Systems: An Overview A system is a set of two or more interrelated components that interact to achieve a goal. Most systems are composed of smaller subsystems that support the larger system. For example, a college of business is a system composed of various departments, each of which is a subsystem. Moreover, the college itself is a subsystem of the university. Each subsystem is designed to achieve one or more organizational goals. Changes in subsystems cannot be made without considering the effect on other subsystems and on the system as a whole. Goal conflict occurs when a subsystem is inconsistent with the goals of another subsystem or with the system as a whole. Goal congruence occurs when a subsystem achieves its goals while contributing to the organization’s overall goal. Data are facts that are collected, recorded, stored, and processed by an information system. For example, the business needs to collect data about a sale (date, total amount), the resource sold (good or service, quantity sold, unit price), and the people who participated (customer, salesperson). Information is data that have been organized and processed to provide meaning and improve the decision-making process. However, there are limits to the amount of information the human mind can absorb and process. Information overload occurs when those limits are passed, resulting in a decline in decision-making quality and an increase in the cost of providing that information...
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... ACCOUNTING __________________________________________________________________________ 1. SYNOPSIS This course introduces students to the important concepts of Accounting Information Systems (AIS). The course contents are divided into three main sections. The first section introduces the basic concepts of AIS including its objectives, components, and subsystems. The concept of E-business as an emerging trend of conducting business in the new era of information technology (IT) is also covered in this section. The second section discusses in depth the common features of transaction processing systems such as revenue and accounts receivable, purchase and accounts payable, manufacturing and inventory, human resource as well as general ledger and reporting system. Integration of selected accounting software will also take place at this stage to enable students apply the AIS concepts into practice. This section also introduces students to the techniques of documenting accounting systems and database modeling tools. The final section discusses the emerging issues in computer crimes, computer ethics and concept of internal controls in organization. Application of internal controls concept into transaction cycles is later discussed. 2. COURSE OBJECTIVES Upon completion of the course, students are expected to 1. Understand the concepts of data processing technology, documentation techniques, infrastructure for e-business...
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...throughout the audit, including establishing materiality, considering appropriateness, and designing audit procedures that can facilitate the growth of Apollo Shoes. Before the auditor can begin the process of conducting the audit of the inventory and warehousing cash cycles, the auditor must prepare the audit plan and program for Apollo Shoes. Developing the audit strategy and plan aids the auditor in determining the necessary resources to perform the engagement. The auditor must develop a plan in mind that will reduce audit risk to an acceptable level for the inventory and warehousing cash cycle. The audit plan should include a description of nature, timing, and extent of the planned risk assessment procedures. The audit plan and program significantly affects the types and extent of further audit procedures to be used by the auditor in determining whether the financial statements are fairly stated in accordance with the US GAAP. The auditor should consider audit risk in relation to the individual account balances, classes of transactions, and disclosures and relevant assertions of the overall level of the financial statements. These further audit procedures include test of controls, substantive tests of transactions and analytical procedures with the evidence collected from these procedures forming part of the auditor’s sufficient and appropriate evidence to support his audit opinion and report in accordance with the US generally...
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...Topic 1: Overview of AIS & Business Processes Characteristics that make information useful: 1. Relevant: Reduces uncertainty, improves decision making, or confirms or corrects prior expectations 2. Reliable: Information free from bias 3. Completeness: Does not omit important aspects of events or activities 4. Timely: Information needs to be provided in time to make the decision 5. Understandable: Information must be presented in a meaningful manner 6. Verifiable: Two independent people can produce the same conclusion 7. Accessible: Available to users when when they need it Business processes (“All cycles are related”): 1. Revenue - Goods & services are sold for cash or a future promise to receive cash. Transactions in Revenue cycle: Handle customer inquiries | Update sales & A/R for sales | Take customer orders | Receive customer payments | Approve credit sales | Update A/R for collections | Check inventory availability | Handle sales returns, discounts & bad debts | Initiate back orders | Prepare management reports | Pick and pack orders | Send info to other cycles | Ship goods | | Bill customers | | 2. Expenditure - Companies purchase inventory for resale or raw materials to use in producing products in exchange for cash or a future promise to pay cash. Transactions in expenditure cycle: Requisition goods and services | Approve invoices for payment | Process purchase...
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...Design Part II The purpose of this part of the audit process for Apollo Shoes is to design tests of controls, substantive tests of transactions, and analytical procedures for the sales, collection, payroll, personnel, acquisition, and payment cycles. These test and procedures are with intent to attest operating effectiveness of internal controls of Apollo Shoes on the basis of documentation provided. It is with the understanding that with the performing of test and procedures an opinion can be formed but management of Apollo shoes is responsible for the maintenance and assessment internal controls of over financial reporting. The design of test of controls of the sales and collection cycle follows. Sales and Collection Cycle Tests of Controls Sales Cycle: The review of the revenue and collection cycle manual of Apollo Shoes provides the improper record keeping of sales orders and that sales orders are not numbered which may affect the accuracy of pricing on invoices so steps. The test of controls for sale cycle to determine accuracy will be: 1. Examine sample 1004345 for Anglonesia Rehabilitation and Reprogramming Institute invoice to review unit prices of merchandise listed. 2. Compare unit prices on invoice for merchandise to these shoe types from inventory status report of 2007. 3. Verify unit prices on invoices are correct. Collection Cycle: A review of balance confirmation from customers provides a customer of Apollo Shoes Neutralizer’s account balance was understated...
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...the size of the business and its specialty in the industry. For example, Peachtree complete accounting 2012 software for a small business costs $299.99. However, Peachtree Premium Accounting for Distribution 2010 will cost a company $1199.99. This does not include any extras added in; this is just the base price for if a company purchased the software online and no installation costs have been added as well. All Peachtree products can be viewed on websites to include amazon.com, bizrate.com and simply by searching Peachtree in a search engine. In order for Peachtree software to work properly on business computers, there are a few requirements for the operating system. “All versions except Peachtree Quantum require the minimum of a 1 GHz Intel Pentium III or equivalent for both single and multiple users. The Peachtree Quantum, however, requires the minimum of a 1.8 GHz Intel Pentium 4 or equivalent...
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...1. Question 1: * Proficient: * Describe the steps in recording and posting the effects of a business transaction and provide some examples of source documents used in these steps. Some examples of accounting source documents include: Bank statements, cash register tape, credit card receipts and supplier invoices. When recording and posting the effects of a business transaction the following steps apply: 1. Identifying and analyzing business transactions to determine the accounts effected and the amounts to be recorded. A business document is a basis for recording a transaction. 2. Recording in the journals which are electronic or paper books where transactions are recorded using T-accounts process. This is when 2 accounts are entered in chronological order showing debits on the left and credits on the right. 3. Posting all transactions to the ledger which is a collection of accounts that shows the changes made to each account as a result of past transactions and the current balances of those transactions. Once the transactions are posted to the ledger the balances of each account can be determined. 4. Unadjusted trial balance is conducted when the recorded debits and credits need to be reviewed on a report for equality of the debits and credits. 5. Adjusting entries are prepared to update accounts before they are finalized in the financial statements by making entries of the expenses that may have been incurred but not entered. ...
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...Program Design Part III Inventory and Warehouse Cycle The inventory and warehouse cycle can be divided into five sections: acquire and record raw materials, labor, and overhead, internally transfer assets and costs, ship goods and record revenue and costs, physically observe inventory, and price and compile inventory. The following will be the tests of control, substantive tests of transactions, and analytical procedures. 1. Acquire and record raw materials, labor, and overhead a. Tests of control i. Check to make sure that all materials ordered have been accounted for ii. Check to make sure that there are records for all orders iii. Check payroll from payroll and personnel cycle iv. Check to make sure that the inventory is not overstocked b. Substantive test of transactions i. Take a sample of the orders placed ii. Make sure that the sample reflects that all material were received iii. Sample the payroll to make sure there are no discrepancies iv. Sample the inventory to make sure that it is replenished and constantly moving c. Analytical procedures i. Compare the results to prior years to ensure that the data matches up ii. Determine if there any risks 2. Internally transfer assets and costs a. Tests of controls i. Check financial statements to ensure assets were transferred ii. Check for the costs related to the business b. Substantive tests of transactions i. Take a sample of the financial statements...
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...ACC 444 EXAM 1 Chapter 1 * Introduction * System: set of two or more interrelated components that interact to achieve a goal. (systems consist of subsystems that support the larger system) * Goal conflict: when subsystem is inconsistent with the goals of another subsystem or with the system as a whole * Goal congruence: when a subsystem achieves its goals while contributing to the organization’s overall goal * Data: facts that are collected, recorded, stored and processed by an information system (activities, resource, people) * Information: data that have been organized and processed to provide meanings and improve the decision-making process (better decisions quantity and quality of information increase) * Information overload: when limits to the amount of information human mind can absorb and process are passes, resulting in a decline in decision making quality and increase in cost of providing that information * Information technology(IT): information designers use to help decision makers more effectively filter and condense information * Value of information: the benefit produced by the information minus the cost of producing it * Seven characteristics of useful information: relevant, reliable, complete, timely, understandable, verifiable, accessible (RRCTUVA) * Information needs and business process * Business process: a set of related, coordinated and structured activities and tasks that are performed by a person or by...
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...LOVELY PROFESSIONAL UNIVERSITY HOME WORK: 3 School: Department CSE/IT Name of the faculty member: Course No: CSE301 Course Title: Database Management System Class: B.Tech (CSE) Term: 6th Section: D1803 Batch:2008 Max. Marks: 18+7=25 Date of Allotment: Date of Submission: Submitted By: Roll No: 25 PART-A Q-1 What is overlapping of Candidate keys? What are the problems incurred due to this overlap and how these problems can be rectified. Explain with Example. Overlap of candidate key is a type of candidate key which occur in BCNF(Boyce Codd Normal Form). In the difference between 3NF and BCNF example: a 3NF table which doesnot have multiple overlapping candidate keys is gurantted to be in BCNF. Depending on what its functional dependencies are . a 3NF table with two or more overlapping candidate keys may or maynot be in BCNF. Example: The original definition of 1NF was in adequate in some situations. It was not satisfactory for the table: • They had multiple candidate keys • Where the multiple candidate keys were composite • Where the multiple candidate keys overlapped Therefore, a normal form, the BCNF was introduced. We must understand it in tables where...
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...Chapter 1—AIS overview (3 Questions = 4.5 points) Purpose of/value provided by AIS 1. Improving the quality and reducing the costs of products or service 2. Improve efficiency and effectiveness of the value chain and supply chain 3. Share knowledge 4. Improve the internal control structure 5. Improve decision making Key Role if the AIS 1. Collecting and storing data 2. Providing information for decisions 3. Safeguarding assets Value Chain Activities 1. Inbound Logistics------ receiving and storage 2. Operations -------------- manufacturing and repackaging 3. Outbound Logistics---- distribution shipping 4. Marketing & Sales------ advertising, selling 5. Service-------------------- repair, maintenance Characteristic of Useful Information 1. Relevant 2. Reliable 3. Timely 4. Verifiable 5. Understandable 6. Accessible 7. Complete Chapter 2/SUA Purpose/use of general ledger, subsidiary ledgers, special journals and cash prelist General Ledger= contains summary level data for every asset, liability, equity and revenue, and expense account...(accounts receivable) Subsidiary Ledger= contains detailed data for any general ledger account with many individualized subaccounts.... (Separate account for each accounts receivable) General Journal= used to record infrequent or non-routine transaction, such as loan payments Specialized Journal= records large numbers of repetitive...
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...REVENUE CYCLES AUDIT OBJECTIVES, CONTROLS, AND TEST OF CONTROLS INPUT CONTROLS 1. Credit Authorization Procedures * Only customer transactions that meet the organization’s credit standards are valid and should be processed further. 2. Testing Credit Procedures * It pertains to the valuation/allocation audit objectives and the accuracy objective 3. Data Validation Controls * Input validation controls are intended to detect transcription errors in transaction data before they are processed. Validation procedures are most effective when they are performed as close to the source of transaction as possible. a. Missing Data Check – are used to examine the contents of a field for the presence of blank data or spaces (missing product numbers, missing customer accounts numbers, or incomplete mailing address) b. Numeric-alphabetic data checks – determine whether the correct form of data is in a field. An invoice total should not contain alphabetic data. c. Limit Check-determine if the value In the fields exceeds an authorized limit. (prices limit or discounts limit) 4. Batch Controls – are used to manage high volumes of transaction data through a system. The following are relevant controls: a. A unique batch number b. A batch date c. A transaction code (indicating the type of transactions, such as sales order or cash receipt). d. The numbers of records in the batch (record count) e. The total dollar value of a financial field...
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