AIS EXAM #1
How does the chart of accounts list general ledger accounts? a. alphabetical order b. chronological order c. size order d. the order in which they appear in financial statements
**the order in which they appear in financial statements
Advantages of ERP Systems
- Integrated enterprise-wide single view of the organization's data which streamlines the flow of information - Data captured once - Greater visibility and monitoring capabilities for management - Improve access of control of the data through security settings - Standardization of procedures and reports - Improves customer service - Increases productivity through automation
data capture
- comes from source documents - info collected for an activity includes 1. activity of interest 2. resources affected 3. people who participated in thh activity
two methods for designing the interface between program instructions and data
- file oriendted processing: a specific data file is created for each application (redundancies and inconsistencies) *ex: excel* - data oriented processing (create a single data repository to support numerous applications) *ex: microsoft access*
the problem with traditional accounting systems
- narrow set of transactions - narrow functional views based primarily on financial reporting - ledgers are repetititve and require extensive reconciliation - output produces narrow functional views
traditional accounting architecture
- the accounting processing cycle during the year - source documents ---> transaction analysis--> journal--> ledger at the end of the accounting period - unadjusted trial balance--> adjusting entries--> adjusted trial balance--> financial statements at the end of the year --close temporary accoutns---> post closing trial balance
data stored in the database files can be viewed
--Online (soft copy) --Printed out (hard copy) **Document (e.g., sales invoice) **Report (e.g., monthly sales report) **Query (question for specific information in a database, e.g., Which division had the most sales for the month?)
How does an AIS add value to an organization?
1) improving the quality and reducing the costs of products or services 2) improving efficiency 3) sharing knowledge 4) improving the efficiency and effectiveness of its supply chain 5) improving the internal control structure 6) improving decision making
data processing cycle
the four operations (data input, data storage, data processing, and information output) performed on data to generate meaningful and relevant information
5 major business processes or transaction cycles
1. Revenue Cycle 2. Expenditure Cycle 3. Production or Conversion Cycle 4. Human Resources/Payroll Cycle 5. Financing Cycle
supporting value chain activities
1. firm infrastructure (AIS) 2. human resources 3. technology 4. purchasing
Primary activities of the value chain
1. inbound logistics 2. operations 3. outbound logistics 4. marketing and sales 5. service
AIS •is influenced by an organization's strategy.
AIS •is influenced by an organization's strategy.
turnaround documents
Company data sent to an external party and then returned to the system as input
Which of the following would managers most likely use to retrieve information about sales during the month of October? a. DQL b. DML c. DSL d. DDL
DQL contains commands that enbale users to retrieve, sort, order, and display data
Which of the following is not considered an advantage of a database system? a. Data are independent of the programs that use them. b. Integrated data can be shared with authorized users. c. Data can be stored multiple times in multiple locations. d. Master files are consolidated and accessible to many application programs
Data can be stored multiple times in multiple locations
advantages of databases
Data is integrated Data sharing Minimize data redundancy and inconsistencies Data is independent of the programs that use the data Data is easily accessed for reporting and cross-functional analysis
data processing can be ______ ____________ (post records at the end of the business day) or ____ ___________ ________ (process as it occurs)
Data processing can be batch processed (e.g., post records at the end of the business day) or in real-time (process as it occurs).
The internal-level schema of a database system consists of an individual user's view of portions of a database and is also called a subschema. a. True b. False
False this is the external-level schema
Which of the following is not a basic requirement of a relational database? a. Primary keys cannot be null. b. Every column in a row must be single valued. c. Foreign keys cannot be null. d. All non-key attributes in a table must describe a characteristic of the object identified by the primary key
Foreign keys cannot be null.
data analytics can help improve decision making by
Identifying a problem/issue for management to resolve. Collecting the data needed to solve the problem, analyze it, and make recommendations to management on how to resolve it. Integrating actionable insights into the systems used to make decisions.
Data differ from information in which way? a. Data are output, and information is input. b. Information is output, and data are input. c. Data are meaningful bits of information. d. There is no difference
Information is output, and data are input.
AIS consists of
People who use the system Processes (procedures and instructions) Technology (data, software, and information technology) Controls to safeguard information
Which of the following is not an appropriate guideline for coding systems? a. Ensure codes used are as simple as possible b. Ensure consistency with the intended use of codes c. Provide for flexibility across divisions when designing codes d. Provide for growth to ensure there will be sufficient codes available
Provide for flexibility across divisions when designing codes
relational data model
Represents everything in the database as being stored in the form of tables (files) represents the conceptual and external schema as if that "data view: were truly stored in one table
data input
Steps in Processing Input are: -Capture transaction data triggered by a business activity (event). -Make sure captured data are accurate and complete. -Ensure company policies are followed (e.g., approval of transaction).
database design
To design a database, you need to have a conceptual view of the entire database. The conceptual view illustrates the different files and relationships between the files.
queries
Users may want specific information found in a relational database and not have to sort through all the files to get that information. So they query (ask a question) the data
data dictionary
a "blueprint" of the structure of the database and includes data elements, field types, programs that use the data element, outputs, and so on
transaction file
a file that contains records of individual transactions (events) that occur during a fiscal period temporary usually maintained for one fiscal period
master file
a file that stores cumulative information about an organization's entities permanent exists across fiscal periods changes are made to reflect the effects of new transactiosn
database
a set of interrelated, centrally coordinated data files that are stored with as little data redundancy as possible collection of related info, grouped together in some logical order
business process
a set of related, coordinated, and structured activities and tasks, performed by a person, a computer, or a machine that help accomplish a specific organizational goal
AIS
a system that is designed to identify, collect, maintain, and processes data needed to generate the outputs required by mgmt to effectively manage business processes provide adequate controls
What makes information useful? (14)
access restricted, accurate, available, reputable, complete, concise , consistent, current, objective, relevant, timely, useable, understandable, verifiable
Blockchain advantages
accuracy, transparency, data consistency, trust, no need for third parties, single set of books, cost, decentralization, efficiency, privacy, security, provenance
A performance report about all approved vendors during the previous 12 months is information MOST needed in which business process? a. paying vendors b. acquiring inventory c. selling merchandise d. paying employees
acquiring inventory
a file
aka table group of related records
purpose of accountign
all organizations need info in order to make effecitve decisions
data analytics
analyzing large amounts of data for strategic decision making
characteristics of an entity
attribute
processing methods (3)
batch processing - periodic, not current online processing - computer input device, may not be current real time processing - immediately current
DDL (Data Definition Language)
builds the data dictionary, creates the database, describes logical views for each user, and specifies record or field security constraints ex: SQL
accounting transactions
business events that cause a change in the organizations assets, liabilities, or owners equity; typically accompanied by a source document
data processing
four types of processing (CRUD) - C: creating new records - R: reading existing data - U: updating previous records or data - D: deleting data
source documents
captures data at the source when the transaction takes place ex: paper source documents, turnaround documents, source data automation. pre numbered sequence(captured data from machines eg POS system)
DML (Data Manipulation Language)
changes database content, including data element creations, updates, insertions, and deletions
event-driven architecture (EDA)
characteristics - based on biz events rather than information customer views supports biz proccess simplification and change integrates all business data integrates information processes and real-time controls
fields aka
columns (attributes) physical space where an attribute is stored
DQL (Data Query Language)
commands that enable userts to retireve, sort, order, and display info
schemas (3)
conceptual-level - organizatino wide view external-level - individual user's view internal-level - low level view (details about data storage)
An employee database that consolidates payroll, personnel, and job skills master files is referred to as a. data integration. b. data sharing. c. data independence
data integration
with _____________ _________once can trace the path of the transaction (audit trail)
data storage
the financing cycle
deals with interactions between an organization and its lenders give cash get cash
Which of the following documents is most likely to be used in the revenue cycle? a. purchase order b. receiving report c. deposit slip d. time sheet
deposit slip
What is a database?
efficiently and centrally coordinates information for a related group of files a file = relaated group of records a record = related group of fields field = specific attribute of interst for the entity (record)
something about which informatino is stored
entity
The constraint that all primary keys must have non-null data values is referred to as which of the following? a. referential integrity rule b. entity integrity rule c. normalization rule d. relational data model rule
entity integrity rule
. Which transaction cycle includes interactions between an organization and its suppliers? a. revenue cycle b. expenditure cycle c. human resources/payroll cycle d. general ledger and reporting system
expenditure cycle
Which of the following is an individual user's view of the database? a. internal-level schema b. conceptual-level schema c. external-level schema d. logical-level schema
external-level schema
The portion of a data record where the value for a particular attribute is stored is called a. an entity. b. an attribute. c. a field. d. a record.
field
the payroll cycle
give cash, get labor
. When a subsystem's goals are inconsistent with the goals of another subsystem or with the system as a whole, it is called a. goal conflict. b. goal congruence. c. neither of these
goal conflict
ais can and should add value
improving quality and reduce costs of products and services improving efficiency sharing knowledege improving internal control stucture imrpoving deicsion making
data storage
includes chart of accounts, transaction journsals, subsidaiary ledgers, general ledgers with data storage, once can trace the path of the transaction (audit trail)
Which of the following is NOT a means by which information improves decision making? a. increases information overload b. reduces uncertainty c. provides feedback about the effectiveness of prior decisions d. identifies situations requiring management action
increases information overload
revenue cycle
involves interactions between an organization and its customers give goods/services get cash
the expenditure cycle
involves interactions with your suppliers. get goods or services give cash.
the production cycle
involves transformation of raw materials into finished goods give labor and materials get finished goods
logical vs physical view
logical view - Different users of the database information are at an external level of the database physical view - an internal level of the database
semantic models
models of real world actions or phenomena entity relationship (ER) modeling
two approaches to Database deisgn
normalization - •begins by assuming that everything is initially stored in one large table. semantic data modeling -
data warehouse
one or more very large databases containing both detailed and summarized data for a number of years that is used for analysis rather than transaction processing
What kind of processing involves entering transaction data and editing them as they occur? a. batch processing b. online batch processing c. online real-time processing
online batch processing
componenets of an Information system
people technology organization
access rights
permissions granted to create, read, update, and delete data, database records, or data files imposed at the database level not the application level CRUD
Which of the following will not be a subsidiary ledger? a. accounts receivable b. accounts payable c. fixed assets d. petty cash
petty cash petty cash is a single account and does not require a subsidiary ledger
. Which of the following is a primary activity in the value chain? a. purchasing b. accounting c. post-sales service d. human resource management
post-sales service
value chain is made up of
primary and support activities
The constraint that all foreign keys must have either null values or the value of a primary key in another table is referred to as which of the following? a. referential integrity rule b. entity integrity rule c. foreign key value rule d. null value rule
referential integrity rule
records aka
rows (tuples) set of attributes stored for a particular instance of an entity
A code where items are all accounted for by being numbered consecutively and missing items cause a gap is a a. sequence code. b. block code. c. group code. d. mnemonic code.
sequence code blocks of numbers are served for specific categories of data group codes use two or more subgroups of digits to code items and are often used in conjunction with block codes mnemonic codes are letters and numbers intersperesed to id an item
coding techniques (4)
sequence codes - items numbered consecutively to account for all items (i.e. prenumber forms) block codes - blocks of numbers reserved for specific categories of data (i.e. product numbers that start with 2 are refridgerators) group codes - two or more subgroups of digits used to code items (i.e. car VIN#'s) mnemonic codes - letters and numbers interspered to id an item (i.e. dry300W05 is low end (300) white (w) dryer (DRY) made by sears (05)
Which of the following is NOT an advantage of an ERP system? a. better access control b. standardization of procedures and reports c. improved monitoring capabilities d. simplicity and reduced costs
simplicity and reduced costs
the database management system (DBMS)
software interface between user applications and data
reconciliation
summing the subsidiary ledgers and comparing the total with the balance in the general ledger control account
. A firm, its suppliers, and its customers collectively form which of the following? a. supply chain b. value chain c. ERP system d. AIS
supply chain
In the value chain concept, upgrading IT is considered what kind of activity? a. primary activity b. support activity c. service activity d. structured activity
support activity
Which of the following is true of a chart of accounts? a. tailored to the needs and purpose of the organization b. account listing of trial balance accounts c. list of numbers assigned to subsidiary ledger accounts d. all count numbers are of the same length
tailored to the needs and purpose of the organization accout listenings of I/S and B/S list of number assigned to all general ledger accounts
permanent account vs temporary accounts
temporary account balances are transferred to the I/S and permanent accounts to the B/S closing entries closed out the temporary accoutns permanaet accounts not closed bc they carry balances to the next accounting period
audit trail
the capability to trace a transaction from its initial recording all the way through the accoutning process to the financial statmenets
The business process that includes goods storage, receiving vendor invoices, and updating payable accounts is called a. the expenditure cycle. b. the revenue cycle. c. the production or conversion cycle. d. the financing cycle.
the revenue cycle *double check with professor*
traditional ais vs erp
traditional AIS only captured financial data; non-financial data was captured in other, sometimes redundant systems
Which of the following is a function of an AIS? a. reducing the need to identify a strategy and strategic position b. transforming data into useful information c. allocating organizational resources d. automating all decision making
transforming data into useful information
What is each row in a relational database table called? a. tuple b. relation c. attribute d. anomaly
tuple
Records of company data sent to an external party and then returned to the system as input are called a. turnaround documents b. source data automation documents c. source documents d. external input documents
turnaround documents
Which of the following describes a situation where non-primary key items are stored multiple times, leading to data inconsistencies? a. update anomaly b. insert anomaly c. delete anomaly
update anomaly
Disadvantages of ERP systems
•Costly •Significant amount of time to implement •Customizing or standardizing a business process •Complexity •User resistance
Enterprise Resource Planning (ERP) Systems
•Integrates activities from the entire organization -Revenue Cycle -Expenditure Cycle -Production Cycle -H/R Payroll Cycle - Financing Cycle -General Ledger and Reporting System
Database systems expand accounting's ability to
•produce real-time dynamic reports of all aspects of the accounting equation.
