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AIS Exam 1 Question and answers
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AIS Exam 1 Question and answers Accounting Information Systems Defined A set of interrelated activities, documents, and technologies designed to collect data, process it, and report information to a diverse group of internal and external decision makers in organizations. AIS -No "right" a...

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  • August 4, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • ais exam 1 question and answers
  • accounting information systems defined a set of in
  • ais no right answer develop professional judgm
  • five part of ais inputs processes outputs stora

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AIS Exam 1 Question and answers

Accounting Information Systems Defined - answer A set of interrelated activities,
documents, and technologies designed to collect data, process it, and report information
to a diverse group of internal and external decision makers in organizations.

AIS - answer -No "right" answer
-Develop professional judgment and confidence in ability to analyze unstructured
problems
-No clear cut, easy, simplistic answers

Five part of AIS - answer Inputs, processes, outputs, storage, internal controls.

Inputs - answer Inputs to an AIS might include documents such as sales invoices
and purchase orders. Accountants would also need to ask questions like those to
design and/or audit the system:
-what kind of source documents will the system users need?
-should the documents be paper-based, electronic, or both?
-how many copies of each document will be required?
-what information should the documents contain?

Processes - answer Processing tools can include computers and satellites. Here are
some other questions you might ask about processing tools:
-which processing tools should the AIS use?
-should the tools be manual, computer-based, or both?
-if computer-based tools are used in the AIS, which software and hardware packages
should be implemented?

Outputs - answer System outputs for most organizations would include the general-
purpose financial statements as well as internal reports such as variance analyses.
Other considerations include:
-Beyond the general purpose financial statements, what other reports will managers and
system users need?
-How should the AIS be designed to facilitate their production?

Storage - answer Data in an AIS system could be stored locally (as in a cash register
or a transactions file) or remotely (as on an external network). Organizations also might
maintain paper-based records of transactions. Relevant questions about storage
include:
-How should data be stored? On paper? Electronically? Both?
-Where should the data be stored? Locally? Remotely? Both?
-How long should data be stored?
-Under what conditions can/should data be destroyed?

, Internal Controls (AIS Structure) - answer Most organizations employ internal
controls such as daily backup of data and separation of duties (custody, authority, and
record keeping) to maintain control over specific assets. Other questions might be:
-What controls are necessary to promote information integrity in the AIS?
-What behavioral effects are the controls likely to have?
-Are the controls cost-effective?

Differentiate Accounting and Bookkeeping - answer A committee of the AAA
developed the following definition of accounting: "Accounting is the process of
identifying, measuring, and communicating economic information to permit informed
judgments and decisions by users of the information." Implied within the AAA's definition
is the bookkeeping process: "that part of accounting is devoted to identifying and
measuring the economic information."

Internal Controls (Internal Transactions) (ch.2) - answer Internal transactions include
adjusting entries, closing entries, and reversing entries. Common internal controls
associated with source documents include: Sequential numbering, Physical security,
Transaction limits.

Sequential Numbering - answer For example, the checks in your checkbook are
numbered sequentially. Thus, you would know if a check had been used out of
sequence, which may indicate an internal control breach.

Physical Security - answer For example, a company should not keep its black
checks in an easily accessible location; rather, they should be secured to prevent
unauthorized use.

Transaction Limits - answer A new purchasing agent, for example, might not be
authorized to issue purchase orders over a certain amount. Requiring a second
signature can cut down on errors and potential misuse of assets.

Coding Systems - answer Sequential, Block, Hierarchical, Mnemonic.

Sequential Coding - answer Simply numbers items in sequence. In automated AIS
systems, transactions might be assigned sequential numbers by a computer as a
method of internal control.
Example: purchase order numbers.
Format: 101, 102, 103

Block Coding - answer Numbers are assigned in blocks; each block is reserved for a
particular kind of account. You can tell what kind of account you're dealing you're
dealing with simply by looking at its first digit.
Example: Uniform system of accounts for restaurants
Format: Current assets: 101, 105, 109, Plant assets: 202, 206, 208, Current liabilities:
301, 303, 305

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