SOLUTION MANUAL FOR ACCOUNTING INFORMATION SYSTEMS (13TH EDITION) MARSHALLB.ROMNEY PAULJ.STEINBART

CHAPTER 1 ACCOUNTING INFORMATION SYSTEMS: AN OVERVIEW SUGGESTED ANSWERS TO DISCUSSION QUESTIONS 1.1 The value of information is the difference between the benefits realized from using that information and the costs of producing it. Would you, or any organization, ever produce information if its expected costs exceeded its benefits? If so, provide some examples. If not, why not? 1.2 Can the characteristics of useful information listed in Table 1-1 be met simultaneously? Or does achieving one mean sacrificing another? 1.3 You and a few of your classmates decided to become entrepreneurs. You came up with a great idea for a new mobile phone application that you think will make lots of money. Your business plan won second place in a local competition, and you are using the $10,000 prize to support yourselves as you start your company. 1.4 How do an organization’s business processes and lines of business affect the design of its AIS? Give several examples of how differences among organizations are reflected in their AIS. 1.5 Figure 1-4 shows that organizational culture and the design of an AIS influence one another. What does this imply about the degree to which an innovative system developed by one company can be transferred to another company? 1.6 Figure 1-4 shows that developments in IT affect both an organization’s strategy and the design of its AIS. How can a company determine whether it is spending too much, too little, or just enough on IT? 1.7 Apply the value chain concept to S&S. Explain how it would perform the various primary and support activities. 1.8 IT enables organizations to easily collect large amounts of information about employees. Discuss the following issues: 1.1 IT is continually changing the nature of accounting and the role of accountants. Write a two-page report describing what you think the nature of the accounting function and the accounting information system in a large company will be like in the year 2030. 1.2 Adapted from the CMA Examination a. Identify and discuss the basic factors of communication that must be considered in the presentation of the annual report. b. Discuss the communication problems a corporation faces in preparing the annual report that result from the diversity of the users being addressed. c. Select two types of information found in an annual report, other than the financial statements and accompanying footnotes, and describe how they are helpful to the users of annual reports. d. Discuss at least two advantages and two disadvantages of stating well-defined corporate strategies in the annual report. e. Evaluate the effectiveness of annual reports in fulfilling the information needs of the following current and potential users: shareholders, creditors, employees, customers, and financial analysts. f. Annual reports are public and accessible to anyone, including competitors. Discuss how this affects decisions about what information should be provided in annual reports. 1.3 The use of IT at USAA 1.4 Match the description in the right column with the information characteristic in the left column. 1.5 The Howard Leasing Company Student solutions will vary based on their background and education. The following is one possible solution. 1.6 The use of IT at Tesco 1.7 Have you ever imagined having one electronic device that does everything you would ever need? Mobile phone makers in Japan have gone beyond the imagining phase. Cell phones in Japan are becoming more versatile than ever. Newer models of cell phones contain a myriad of applications and can do many of the things that a personal computer (PC) can do. PCs are also able to function as phones. A small but growing number of professionals are trading in their laptops for handheld computers. Cell phone manufacturers in the United States and elsewhere are quickly catching up to their Japanese counterparts. 1.8 Classify each of the following items as belonging in the revenue, expenditure, human resources/payroll, production, or financing cycle. CHAPTER 2 OVERVIEW OF TRANSACTION PROCESSING AND ENTERPRISE RESOURCE PLANNING SYSTEMS SUGGESTED ANSWERS TO DISCUSSION QUESTIONS 2.1 Table 2-1 lists some of the documents used in the revenue, expenditure, and human resources cycle. What kinds of input or output documents or forms would you find in the production (also referred to as the conversion cycle)? 2.2 With respect to the data processing cycle, explain the phrase “garbage in, garbage out.” How can you prevent this from happening? 2.3 What kinds of documents are most likely to be turnaround documents? Do an Internet search to find the answer and to find example turnaround documents. 2.4 The data processing cycle in Figure 2-1 is an example of a basic process found throughout nature. Relate the basic input/process/store/output model to the functions of the human body. 2.5 Some individuals argue that accountants should focus on producing financial statements and leave the design and production of managerial reports to information systems specialists. What are the advantages and disadvantages of following this advice? To what extent should accountants be involved in producing reports that include more than just financial measures of performance? Why? SUGGESTED ANSWERS TO THE PROBLEMS 2.1 The chart of accounts must be tailored to an organization’s specific needs. Discuss how the chart of accounts for the following organizations would differ from the one presented for S&S in Table 2-4. 2.2 Design a chart of accounts for SDC. Explain how you structured the chart of accounts to meet the company’s needs and operating characteristics. Keep total account code length to a minimum, while still satisfying all of Mace’s desires. 2.3 An audit trail enables a person to trace a source document to its ultimate effect on the financial statements or work back from amounts in the financial statements to source documents. Describe in detail the audit trail for the following: 2.4 Your nursery sells various types and sizes of trees, bedding plants, vegetable plants, and shrubs. It also sells fertilizer and potting soil. Design a coding scheme for your nursery. 2.5 Match the following terms with their definitions 2.6 For each of the following scenarios identify which data processing method (batch or online, real-time) would be the most appropriate. 2.7 After viewing the Web sites, and based on your reading of the chapter, write a 2 page paper that describes how an ERP can connect and integrate the revenue, expenditure, human resources/payroll, and financing cycles of a business. 2.8 Which of the following actions update a master file and which would be stored as a record in a transaction file? 2.9 You were hired to assist Ashton Fleming in designing an accounting system for S&S. Ashton has developed a list of the journals, ledgers, reports, and documents that he thinks S&S needs (see Table 2-4). He asks you to complete the following tasks: SUGGESTED ANSWERS TO THE CASE 2.1 Bar Harbor Blueberry Farm CHAPTER 3 SYSTEMS DEVELOPMENT AND DOCUMENTATION TECHNIQUES SUGGESTED ANSWERS TO DISCUSSION QUESTIONS 3.1 Identify the DFD elements in the following narrative: A customer purchases a few items from a local grocery store. Jill, a salesclerk, enters the transaction in the cash register and Download Here takes the customer’s money. At closing, Jill gives both the cash and the register tape to her manager. 3.2 Do you agree with the following statement: “Any one of the systems documentation procedures can be used to adequately document a given system”? Explain. 3.3 Compare the guidelines for preparing flowcharts, BPDs, and DFDs. What general design principles and limitations are common to all 3 documentation techniques?