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Flashcards in Mid-Term Test Deck (164)
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A set of two or more interrelated components interacting to achieve a goal.


Goal Conflict

When components acting in their own interest contribute do not toward the overall goal.


Goal Congruence

When components acting in their own interest contribute toward the overall goal.


Business transactions

An agreement between two entities to exchange goods/services or other event, that can be measured in economic terms by an organisation.


Accounting Information System (AIS)

A system that collects, records, stores and processes data to produce information for decision-making.


Components of an Accounting Information System (6)

- Users
- Procedures and instructions used
- Data about organisation and its activities
- Software used to process data
- Information technology infrastructure
- Internal controls and security measures


The six components of an Accounting Information System enable three business functions to be fulfilled...(3)

1) Collect and store data about organisational activities, resources and personnel.
2) Transform data into information, for management to plan, execute, control and evaluate activities, resources and personnel.
3) Provide controls to safeguard assets and data.


How can an AIS add value to an organisation? (6)

1) Improving the quality and reducing the costs of products or services
2) Improve efficiency
3) Sharing knowledge
4) Improve efficiency and effectiveness of supply chain
5) Improve internal control structure
6) Improve decision making


Value chain

The set of primary and secondary activities a product/service moves along before output.


Value chain: primary activities

Value chain activities that produce, market and deliver products/services to customers and provide post-delivery support.


Supply chain

An extended system that includes an organisation's value chain, as well as its suppliers, distributors and customers.


Support activities

Value chain activities such as infrastructure, technology, purchasing and human resources.


Data processing cycle

The four operations (data input, data storage, data processing, and information output) performed on data to generate meaningful and relevant information.


Data input: Capture

Data must be collected about 3 facets of each business activity as it occurs.

1) Each activity of interest
2) Resource(s) affected by each activity
3) People who participate in each activity


Source documents

Documents used to capture transaction data as its source - when the transaction occurs.


Turnaround documents

Records of company data sent to an external party and then returned to the system as input.



The systematic assignment of numbers/letters to items to classify and organise them.


Coding types (4)

- sequence codes: items are numbered consecutively
- group codes: two/more subgroups of digits used to code items
- mnemonic codes: letters & numbers (description) used to identify an item
- chart of accounts: listing of numbers assigned to balance sheet and income statement accounts


Data processing activities (4)

1) Create new data records
2) Read, retrieve or view existing data records
3) Update existing stored data records
4) Delete data or records


Enterprise resource planning (ERP)

A system that integrates all aspects of an organisations activities (Financial, Human resources, Marketing, ect.)


ERP Advantages (7)

- integration of organisation data and financial information
- data is captured once
- greater management visibility, increased monitoring
- better access control
- standardises business operating procedures
- improved customer service
- more efficient manufacturing


ERP Disadvantages (5)

- cost
- time consuming to implement
- complex
- resistance to change
- changes to an organisations existing business processes can be disruptive


Data flow diagram (DFD)
- data sources
- data flows
- data destination
- transformation processes
- data store

A graphical description of the flow of data within an organisation. This includes:
- data sources/destinations: square
- data flows: curved/straight arrow
- internal control: red square
- transformation processes: circle
- data store: two horizontal lines


Data flow diagram levels (3)

1) Context
2) Level-0
3) Level-1


DFD: Context diagram

Highest level DFD, which show inputs and outputs into a system and their destinations and sources.



Level-0: Show all major activity steps of a system. (labeled 1.0, 2.0)
Level-1: Show one major activity, divided into sub activities. (labeled 1.1, 2.1)


Flow charts

Use symbols to logically depict transaction processing and the flow of data through a system.


Types of flow charts (3)
- Document
- System
- Program

Document: illustrates flow of document through an organisation, useful to analyse internal controls.
System: representation of system inputs, procedures and outputs, useful to analyse systems and design.
Program: represent logical sequence or program logic.


Common threats to AIS (3)

- natural disasters
- software errors and/or equipment malfunction
- unintentional and intentional (sabotage) acts



Any and all means a person uses to gain an unfair advantage over another person.