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AIS ch 1 &2 Questions and Answers right
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AIS ch 1 &2 Questions and Answers right the Accounting Cycle 1 source document 2 journal 3 ledger 4 trial balance 5 adjustments 6 adjusted trial balance 7 closing entries 8 financial statements Seven general characteristics that make information useful Relevant: information needed ...

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  • August 4, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • ais ch 1 2 questions and answers right
  • the accounting cycle 1 source document 2 journal 3
  • seven general characteristics that make informatio
  • an accounting information system ais is a system

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  • Ais

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AIS ch 1 &2 Questions and Answers
right
the Accounting Cycle - answer 1 source document
2 journal
3 ledger
4 trial balance
5 adjustments
6 adjusted trial balance
7 closing entries
8 financial statements

Seven general characteristics that make information useful - answer Relevant:
information needed to make a decision 2.Reliable: information free from bias
3.Complete: does not omit important aspects of events or activities
4.Timely: information needs to be provided in time to
make the decision
5. Understandable: information must be presented in a meaningful manner
6.Verifiable: two independent people can produce the same conclusion
7.Accessible: available when needed

An accounting information system (AIS) - answer is a system that collects, records,
stores, and processes data to produce information for decision makers.

The Three Basic Functions Performed by an AIS - answer 1-To effectively collect
and store data about a company's activities, transactions, and resources.
2. To transform data into information useful to management in internal decision making.
3. To provide adequate internal controls to safeguard the organization's assets and
data.

To effectively collect and store data about a company's activities, transactions, and
resources - answer Capture transaction data on source documents.

Record transaction data in journals, which present a chronological record of what
occurred.

Post data from journals to ledgers, which sort data by account type.

To transform data into information useful to management in internal decision making: -
answer In classic (manual) systems, this information is provided in the form of
reports that fall into two main categories:
-
financial statements

, -
managerial reports

Management Reports - answer Internally focus
2. No mandatory rules
3. Financial and nonfinancial information; subjective information possible
4. Emphasis on the future
5. Internal evaluation and decisions based on very detailed information

Financial Statements - answer Externally focus
2. Must follow externally imposed rules
3. Objective financial information
4. Historical orientation
5. Information about the firm as a whole

3 To provide adequate internal controls - answer Safeguard organizational assets

Ensure that the information produced by the system is reliable.

Ensure that business activities are performed efficiently and in accordance with
management's objectives.

Financing cycle - answer get cash, give cash

Expenditure cycle - answer give cash, get goods

Human resources cycle - answer give cash, get labor

Production cycle - answer give labor, give raw materials, get finished goods

Revenue cycle - answer give goods, get cash

Record Transaction Data in Journals - answer After transaction data have been
captured on source documents, the next step is to record the data in a journal.

journal entry - answer is made for each transaction showing the accounts and
amounts to be debited and credited.
The general journal records infrequent or nonroutine transactions

What are the four most common types of transactions - answer Credit sales
2
Cash receipts
3
Purchases on account
4
Cash disbursements

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