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ACCOUNTING INFO EXAM 1
Terms in this set (76)
Value Of Info
Info is valuable when the benefits exceed the costs of gathering, maintaining, and storing data
Are facts collected, recorded, and stored in a system
What is the equation for Value of info
Benefit - Cost = Value of info
Info needed to make a decision
Info free from bias
Does not omit important aspects of events/activities
Info needs to be provided in time to make the decision
Info must be presented in a meaningful manner
2 independent people can produce the same conclusion
Available when needed
Give Goods/Give Service = Get Cash (AR)
Get Goods/Get Service = Give Cash (Inventory Purchasing, AP)
Give labor and give raw materials = Get finished goods
Payroll Cycle (HR)
Give Cash = Get Labor (Employees Hired/trained)
Give Cash = Get Cash (Capital/SE/Stocks/Divs.)
Which of the following is NOT a "primary activity" that directly provides value to the customer?
System that collects, records, stores, and processes data to produce info for decision makers
What are the 6 components of an AIS?
People, Procedures/Instructions, Data, Software, Info. Technology infrastructure, and Internal Controls/security measures
Inbound Logistics (Prim. Act in V. Chain)
Receiving and Storing Materials
Marketing and Sales
Transaction cycles can be summarized on a high level as "give-get" transactions. An example of "give-get" in the revenue cycle would be
Give Goods Get Cash
When a subsystem's goals are inconsistent with the goals of another subsystem or with the system as a whole, it creates?
Data must be converted into information to be considered useful and meaningful for decision making. There are seven characteristics that make information both useful and meaningful. If the same information can be reproduced by two independent and knowledgeable people, it is representative of the characteristic of
A delivery of inventory from a vendor would be initially recorded in which type of accounting record and as part of what transaction cycle?
purchases journal; expenditure cycle
In which transaction cycle would information for paying dividends be most likely to pass between internal and external accounting information systems?
The Financing Cycle
Which of the following is NOT one of the five major business processes or transaction cycles?
Which of the following statements below shows the contrast between data and information?
Information is the primary output of an accounting information system.
What are the 4 steps in the Data Processing Cycle?
Data Storage (2), Data Input (1), Data Processing (3), Info Output (4)
Capture transaction data triggered by a business activity. Make sure captured data are accurate and complete. Ensure company policies are followed
What are the 3 different types of source documents?
Paper, Turnaround, Source data automation (captured data from machines, e.g., Point of Sale scanners at grocery store)
In Petaluma, California, electric power is provided to consumers by Pacific Power. Each month Pacific Power mails bills to 186,000 households and then processes payments as they are received. What is the best way for this business to ensure that payment data entry is efficient and accurate?
Chart of accounts (Coding schemes), Transaction Journals (Sales), Subsidiary Ledgers (AR), General Ledger (Audit Trail)
Why do companies Code?
Companies code so they can anticipate management needs are most effective and efficient
What are the 2 basic types of files
Transaction and Master
How should coding schemes be?
Consistent, Allows for growth, and be as simple as possible.
Creating New records
Reading existing data
Updating previous record or data
Difference between Batched Processing and real time?
Batched= posting records at the end of the business day.
Real time = Process it as it occurs
Integrates activities from the entire organization (REV., EXPO, PROD, Payroll cycle)
Advantages of an ERP
Improves customer service, Increased productivity through automation, etc.
Disadvantages of an ERP
Costly and complex
What are the 4 basic activities in the revenue cycle?
Sales order entry, Shipping, Billing, Cash collections.
Inaccurate master data/Poor Performance
Restrict Access to master data and encryption
What are the 4 steps in a Sales order entry processing?
Take the customer order, Approve customer credit, check inventory availability, and respond to customer inquiries (EDI)
Invalid orders and loss of customers
Signature to authorize sale and data entry edit controls
Pick and pack the order and ship the order
Theft and picking wrong item or quantity to ship
Bar Code technology
Invoicing the customer, Updating A/R, Balance forward, and write offs
Fail to bill customer and billing errors
Reconcile invoices with sales orders/shipping docs
Cash Collection Processo
Process customer payment/update there account balance and deposit payments to the bank
Theft of cash and cash flow problems
Lockbox and cash flow budgeting
How can we collect payments
Lockbox (Direct Mail), Electronic lockbox (your bank to their bank), and electronic funds transfer (direct pat to company)
Which of the following is not a threat to the revenue cycle billing process?
loss of customers.
"BLANK" is not a basic activity of the revenue cycle.
Regularly reviewing an accounts receivable aging report can help management do what?
identify customers who are falling behind in their payments.
Laz Chance wears roller blades and headphones when he is at work at the Squishy Things Toy Company. He is a product packer. The headphones give him computer-generated instructions so he knows the location of each item and quantity that should be included in the order. These instructions are the equivalent of a
The activities involved in making a sale and processing customer orders within the revenue cycle are known as the
sales order entry process.
For strongest segregation of duties, a sales representative should never be allowed to
approve a sale on credit.
Which of the following is not a threat to the revenue cycle sales order entry process?
Cash Flow Problems
When a customer places an order (on account) for a certain product, what should be done before the order is checked for inventory availability?
The customer's available credit should be checked.
Which of the following is not a threat to the revenue cycle shipping process?
The ________ is a legal contract that defines responsibility for goods that are in transit.
Bill of Lading
The legitimacy of customer orders is established by ________ in paper-based customer orders.
The customers signature
Special software packages called ________ can help an organization manage customer relationships through service.
Which of the following controls can minimize the threat of failure to bill?
Separation of billing and shipping functions.
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