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Accounting Information Systems Exam 1 Qs questions & answers.
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Accounting Information Systems Exam 1Qs questions & answers.
What are the four levels of activity in the pyramid representing the business organization? Distinguish
between horizontal and vertical flows of information. ANS - (bottom --> top) Base Operations,
Operations Management, Middle Management, Top Management. Vertical flows distribute information
downward from senior managers to junior managers and operations personnel in the form of
instructions, quotas, and budgets. Vertical flows also distribute information upwards, as summarized
info about operations flows up to managers. Horizontal flows are operations-level tasks, such as sale and
shipment of goods, use of labor and materials in production internal transfers of resources.
What is the relationship among data, information, and an information system? ANS - Data: facts which
may or may not be processed and have no direct effects on users actions.
Information: cause the user to take action, processed data.
Information System: set of formal procedures by which data are collected, stored, processed into
information, and distributed to users.
Distinguish AIS and MIS ANS - AIS process financial and nonfinancial transactions that directly affect
financial transactions. Major subsystems are TPS, GL/FRS, MRS.
MIS: Nonfinancial transactions (planning, control, sales forecasting, inventory warehouse planning).
What are the three cycles of transaction processing systems? ANS - Revenue, Expenditure, Conversion
What is discretionary reporting? ANS - Organization can choose what information to report and how to
present it. Typically produced by MRS; budgets, variance reports, cost-volume-profit analyses, current
cost data.
What are characteristics of good or useful information? ANS - 1. relevance
2. timeliness
3. accuracy
4. completeness
5. summarization
, What rules govern data collection? ANS - 1. relevance - analyze the users needs; what contributes to
information
2. efficiency; designed to collect data only once
What are the levels of data hierarchy? ANS - 1. data attribute
2. record
3. file
4. database
What are the three fundamental tasks of database management? ANS - 1. storage
2. retrieval
3. deletion
What is feedback, and how is it useful in an information system? ANS - Form of output that is sent back
to the system as a source of data. May be internal or external and is used to initiate or alter a process.
Ex: inventory status report signals the inventory control clerk items of inventory have fallen below
levels. Allows clerk to replenish the inventory.
What are the fundamental objectives of all information systems? ANS - 1. support the firm's day-to-day
operations
2. support management decision making
3. support the stewardship function of management
What does stewardship mean, and what is its role in an information system? ANS - Stewardship refers to
the managers' responsibility to properly manage the resources of the firm and to report on their
activities. In an information system, external users receive stewardship info through financial statements
and mandated reports. Internally, managers receive stewardship info from various responsibility
reports.
List five functional areas and their sub-functions ANS - 1. materials management (purchasing, receiving,
stores)
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