Term
| What is an accounting information system |
|
Definition
| A system is a set of 2 or more interrelated components that interact to achieve a goal |
|
|
Term
|
Definition
| collects, records, stores, and processes data to produce info form decision makers |
|
|
Term
|
Definition
People who operate system
Procedures and instructions
Data
Software
IT infrastructure: peripherals and hardware
Internal controls and security measures |
|
|
Term
| What important function does AIS perform |
|
Definition
Collect and store DATA
Process DATA into info for decisions
Provide adequate controls |
|
|
Term
|
Definition
Business activities are recorded and processed accurately
Organizational assets and data are safeguarded |
|
|
Term
|
Definition
| accurate and timely info to improve: efficiency, decision making capabilities, sharing of knowledge, quality and cost of products and services, internal control structure, improve decision making |
|
|
Term
|
Definition
| Structured, semi structured, unstructured |
|
|
Term
|
Definition
Operational control
Management control
Strategic planning |
|
|
Term
|
Definition
Product differentiation
Low cost |
|
|
Term
|
Definition
variety based
needs based
access based |
|
|
Term
|
Definition
| benefit produced minus cost |
|
|
Term
| Five major transaction cycles |
|
Definition
revenue
expenditure
production
human resources/payroll
financing |
|
|
Term
|
Definition
four steps: data input
data processing
data storage
information output |
|
|
Term
|
Definition
3 facets:
interest
resources affected
people who participate in each activity
Enter via source document |
|
|
Term
| Step two: data processing |
|
Definition
| updating data previously stored; changing information; adding data; deleting data |
|
|
Term
|
Definition
Batch processing: period updating of data
Online real time processing: updating as each transaction occurs |
|
|
Term
|
Definition
| General ledger: contains summary level data; Subsidiary accounts: Maintain info at more detailed levels |
|
|
Term
|
Definition
| records entries into accounts that are used for financial reporting, management reporting, tax reporting |
|
|
Term
|
Definition
| used for special infrequent entries, usually done by accountants |
|
|
Term
|
Definition
| to automate the process of recording many transactions |
|
|
Term
|
Definition
| something about which information is stored |
|
|
Term
|
Definition
| details about the entity: pay, social security # |
|
|
Term
|
Definition
| in physical space, records correspond to entities |
|
|
Term
|
Definition
| in physical space, fields correspond to attributes |
|
|
Term
|
Definition
| also called subsidiary ledgers: cumulative info about an organization's resources and the agents which it interacts |
|
|
Term
|
Definition
| contain records for the individual business transactions that occur during a specific fiscal period |
|
|
Term
| Step four: information output |
|
Definition
| info presented in one of three forms: documents, reports, query |
|
|
Term
|
Definition
| Third party software, real-time, integrated systems, complicated and costly to implement, can often run an entire co on one system |
|
|
Term
|
Definition
| narratives, flowcharts, diagrams and other written materials that explain how a system works |
|
|
Term
|
Definition
| sox act effectively requires that publicly traded companies and their auditors document and test the company's internal controls |
|
|
Term
| Data flow diagrams (DFD's) |
|
Definition
| Graphical descriptions of the sources and destinations of data. DFD's show where data comes from, how it flows, the processes performed on it and where it goes |
|
|
Term
|
Definition
| Document flowcharts; systems flowcharts; program flowcharts |
|
|
Term
|
Definition
| describe the flow of documents and information between departments or units |
|
|
Term
|
Definition
| describe the relationship between inputs, processing, and outputs for a system |
|
|
Term
|
Definition
| describe the sequence of logical operations performed in a computer program |
|
|
Term
|
Definition
| only four symbols: generally less detailed than a flowchart : good for a higher level description of a system; |
|
|
Term
|
Definition
| highest level of a DFD: summary level view of the system; usually accompanied by narratives |
|
|
Term
|
Definition
| depict the relationship among the input, processing, and output of an AIS |
|
|
Term
|
Definition
| illustrates the sequence of logical operations performed by a computer in executing a program |
|
|
Term
| What does Warren include in the Sales and Cash receipts process |
|
Definition
| sales cycle, cash receipts cycle, sales returns and allowances, estimating bad debt expense, write off of uncollectible accounts |
|
|
Term
|
Definition
|
|
Term
| Sales cycle: Transaction: Credit sales; Actions: |
|
Definition
| Receive orders from customers, ship goods, bill customers, record in sales journal, record in subsidiary ledger, summarize journal and post to the general ledger |
|
|
Term
| Receive order from customer |
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
| Sales cycle: transaction: credit sales: Accounts: |
|
Definition
| Accounts receivable, sales |
|
|
Term
| Cash receipts cycles: Transactions: |
|
Definition
| Collection of AR; borrow money; cash sales; asset sales |
|
|
Term
| CR Cycle: collection of AR: Document |
|
Definition
|
|
Term
| CR Cycle: Borrow money: Action and Document |
|
Definition
| Enter in CR prelist use CR Prelist |
|
|
Term
| Cr Cycle: Cash sales: Action and documents |
|
Definition
| Deposit cash using a deposit slip |
|
|
Term
| CR Cycle: Asset sales: Action and documents |
|
Definition
| Record in CR Journal and subsidiary ledger using journals and other stuff (pg. 38-39) |
|
|
Term
|
Definition
| Summarize and post to GL using the electronic spreadsheet |
|
|
Term
| Sales returns and allowances: Transaction |
|
Definition
|
|
Term
| Receiving a sales return in the cycle: Actions |
|
Definition
| Process request, receive goods, credit customers, record in sales journals and subsidiary ledger, post to GL |
|
|
Term
| Process sales return request using a |
|
Definition
|
|
Term
| Sales returns: receive goods using a |
|
Definition
|
|
Term
| Sales returns: credit customers using a: |
|
Definition
|
|
Term
| Sales returns: Post to GL |
|
Definition
| using an electronic spreadsheet |
|
|
Term
| What accounts do sales returns and allowances affect: |
|
Definition
| Accounts receivable and sales returns |
|
|
Term
| Estimate of bad debt expense: transaction: and actions |
|
Definition
| bad debt provision (expense); determine account, record in general journal, post to GL |
|
|
Term
| What Bad debt method does Warren use |
|
Definition
| income statement method: bad debt expense for the year is determined by multiplying NET sales (sales less discounts, less sales returns and allowances) by a percentage base on prior years relationship of bad debt to net sales: ONE OF 5 ADJUSTING ENTRIES IN THE PROJECT |
|
|
Term
| Write off of uncollectible accounts: Transaction and actions |
|
Definition
| bad debt write-off: Identify uncollectible accounts, record in general journal, post to General Ledger |
|
|
Term
| What does Warren include in the Purchases and Cash Disbursements process: |
|
Definition
| purchases, cash disbursements, purchase returns and allowances, provision for depreciation, and adjustments for prepaids and accruals |
|
|
Term
| 1. Purchases: transaction |
|
Definition
|
|
Term
| Purchases: Credit purchases: Actions |
|
Definition
| requisition goods or services, process purchase order, receive goods, record invoice from customer, record in purchases journal, record in subsidiary ledger, summarize and post to G/L |
|
|
Term
| Purchases: credit purchases: Accounts |
|
Definition
| inventory, AP, Fixed assets, expense accounts |
|
|
Term
| Cash disbursements cycle: two types of transactions |
|
Definition
| payment on account payable; cash purchases |
|
|
Term
| Cash disbursements: actions |
|
Definition
| Process cash disbursement, record in cash disbursements journal and subledger, summarize CD journal and post to GL |
|
|
Term
| Cash disbursements: Accounts: |
|
Definition
| Cash, AP, Purchase discounts, notes payable |
|
|
Term
| Purchase returns and allowances: transaction |
|
Definition
|
|
Term
| Transaction: purchase returns: actions: |
|
Definition
| request purchase return, return goods, record in journal and sub ledger, summarize journal, post to GL |
|
|
Term
| Purchase return documents |
|
Definition
| Return request, shipping document, purchase journal/AP subledger, electronic spreadsheet |
|
|
Term
| Purchase return: accounts |
|
Definition
|
|
Term
| Provision for depreciations, adjustments to prepaids and deferrals: Transactions |
|
Definition
| Depreciation, accruals, deferrals |
|
|
Term
| Provision for depreciations, adjustments to prepaids and deferrals: actions |
|
Definition
| determine appropriate adjustments, record in general journal, post to GL |
|
|
Term
| Provision for depreciations, adjustments to prepaids and deferrals: documents |
|
Definition
| memos, general journal, electronic spreadsheet |
|
|
Term
| Provision for depreciations, adjustments to prepaids and deferrals: |
|
Definition
| depreciation, income tax expense/payable, interest expense/payable |
|
|
Term
| What inventory cycle does warren use |
|
Definition
|
|
Term
| Equation for inventory cycle |
|
Definition
| beginning inventory + net purchases - ending inventory = COGS |
|
|
Term
| Steps to find inventory using periodic method |
|
Definition
| 1. count inventory using tags of count sheets: two people; 2. summarize inventory; 3. determine correct unit cost of inventory; 4. extend price (cost) times quantity and add for total inventory; 5. record in general ledger by journal entry |
|
|
Term
| Typical adjusting entries: |
|
Definition
| Interest payable, estimates for depreciation and bad debt expense, inventory and cost of sales, federal income tax |
|
|
Term
|
Definition
| required only at end of period when financial statements are made, affect both balance sheet and income statement; match expenses with income in the appropriate period, or to adjust from cash basis to accrual basis |
|
|
