question

______ by itself does not help make decisions. It must be converted into information before it is useful.

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Data

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_____ is a collection of unprocessed facts, figures, statistics, etc. that can be processes to create information.

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Data

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Data that is processed(sorted, filtered, categorized, aggregated, etc.) into a product that has the potential to impact a decision.

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Information

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Detailed methods, procedures and routines established to acheive a specific goal.

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Systems

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An integrated set of components for collecting, storing, processing and communicating information.

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Information System

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____ _____ have nothing to do with technology

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Information System

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A set of detailed methods, procedures and routines established or formulated to convert data into information.

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Data Information System

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A framework designed in 1970 as a guide for development of future accounting principles. Designed mainly for users without power (external users).

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FASB Conceptual Framework

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Three levels of the FASB Conceptual Framework?

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Objective, Qualitative and Assumptions

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First level of the FASB Conceptual Framework?

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Objective

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The ______ of the FASB Conceptual Framework is to provide information for decision making.

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Objective

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The second level of the FASB Conceptual Framework is _______ ________.

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Qualitative Characteristics

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Two types of qualitative characteristics?

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Primary, Secondary

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Primary Qualitative Characteristics consists of __________ and __________.

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Relevance, Reliability

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Secondary Qualitative Characteristics consists of __________ and __________.

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Comparability, consistency

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Information is ___________ when it impacts the decision.

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Relevant

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__________ is when information can be trusted.

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Reliability

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The third level of the FASB Conceptual Framework consists of _____________ , __________ and __________.

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Assumptions, Principles and constraints

question

4 Assumptions of the FASB Conceptual Framework?

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Economic Entity, Going Concern, Periodicity, monetary unit

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Assumption that states a business is separate from its owners

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Economic Entity

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Assumption that states a business will survive long enough to meet its current obligations.

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Going Concern

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Assumption that states the life of a business is divided into time periods for financial reporting.

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Periodicity

question

Assumption that states the value of a dollar is stable.

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Monetary Unit

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4 Principles in the third level of the FASB Conceptual Framework?

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Historical Cost, Realization, Matching and Full Disclosure

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In AIS, items are generally recorded at their _______ ________

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Historical Cost

question

Revenue may be _________ when the earnings process is essentially complete via evidence that an agreement exists, delivery has occurred or services have been rendered, the seller's price is fixed and determinable, and collectability is reasonably assured.

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Realized

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__________ expenses should appear on the income statementwith the revenue they halped generate.

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Matching

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Principle that states we should give decision makers all the information they need.

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Full Disclosure

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4 Constraints of the third level of the FASB Conceptual Framework?

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Cost Effectiveness, Materiality, Conservatism and Industry Practices

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Constraint that states the benefit of having information must exceed the cost of obtaining it.

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Cost Effectiveness

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Constraint that states the dollar amounts must be large enough to make a difference in decisions.

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Materiality

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Constraint that states when choosing between accounting practices, make the choice that presents the "worst case" scenario. Choose a scenario that results in highest expense, lowest income, highest liability and lowesr asset.

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Conservatism

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Constraint that states we should follow the conventions of the industry in financial reporting.

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Industry Practices

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A well designed AIS relates to conceptual framework by:

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capturing data on the element for the financial statements, transferring data into relevant and reliable information and takes into account cost-benefit constraint.

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Capturing data on the element for the financial statement consists of

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providing information about assets, liabilities, equity, expenses, revenues, etc.

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Transferring data into relevant and reliable information consists of:

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giving further information beyond just the element that will help in decision making. Includes non-financial information. Foe example, transaction histories.

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Taking into account cost benefit constraint consists of :

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taking into account that the AIS benefits should exceed the costs in creating and maintaining such a system. Benefits may be economical, behavioral, psychological or financial.

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3 Characteristics of accounting data?

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primarily financial data, transaction based and generated in the process of operations

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An integrated set of components for collecting, storing, processing and presenting financial information as well as protecting the information integrity by having well designed systems that serve both internal and external users by assisting in the decisicion making process.

answer

Accouting Information Systems

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In a _______ system people do the processing, forms capture and move data, storage is in physical files and reports are documents.

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Manual

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In an ________ system computers do the data capturing and processing, data is moved internally within the computer electronically or externally via telecommunications, storage is in permanent or temporary computer files and reports are electronically generated and distributed.

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Automated

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5 parts that compromise an AIS:

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Inputs, Processes, Outputs, Storage and Internal Controls

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______ consist of sales invoices, purchase orders and considers the types of source documents the user will require and what information the documents will contain.

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Input

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__________ are for the purpose of design and audit under the considerations of the kind of tools that are needed for processing, should tools be manual or computerized and what kind of hardware and software should be installed.

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Processes

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________ are the financial statements and internal reports. When creating these it is important to consider what type of reports are needed and how the system will help in the production of these reports.

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Output

question

________ is either stored locally or remotely (external network). Consider how the data should be stored (paper, electronically), where it should be stored and for how long.

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Storage

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______ _______ consist of passwords, segregation of duties and back ups. Taken into consideration should be what are the necessary controls and do the benefits outweigh the costs?

answer

Internal Controls

question

Information systems that allow companies to inegrate information across operations on a company wide basis throughout marketing, management, finance, HR, etc.

answer

Enterprise Wide Information System

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A set of generic interrelated activities common to many business firms that result in the creation of value for a firm.

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Value Chain

question

A group of related activities performed by a business to create value by converting inputs into outputs.

answer

Business Processes

question

a _____ _____ is made up of all the business processes of an enterprise

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Value Chain

question

What are some examples of business processes that involve AIS?

answer

Sales or revenues, cash collections, purchases, cash disbursements, conversion or production and payroll.

question

A statement that defines or constrains some aspect of the business. It is intended to assert business structure or to control or influence the behavior of the business.

answer

Business Rule

question

The business rules that concern a project are _____, meaning they cannot be broken down any further.

answer

atomic

question

An illustration or description of a process expressed in terms of its business rules.

answer

Business Rule Model

question

An example of the Business Rule Model is:

answer

the process a student goes through to purchase a book from an online bookstore.

question

"Coverage" is one basis for evaluating Internet information in the list developed by the University of Maryland. Which of the following statements on a web site would cause you to question its coverage?

answer

This web site is a work in progress.

question

An author's identity and background are most closely related to which element of information competence?

answer

Authority

question

According to the text, information about accounting information systems on the Internet falls into ___ main groups.

answer

Three

question

Consider the following two statements about accounting information systems: (i) AIS incorporates more problems with deterministic solutions than other areas of accounting. (ii) AIS is more integrative than other areas of accounting. Which of the statements is/are true?

answer

ii only

question

The cost/benefit constraint mentioned in the FASB conceptual framework is important in all areas of accounting. Which of the following is a cost that should be considered in many AIS tasks?

answer

Considering the effects of decisions on human behavior

question

Accounting information systems are designed to

answer

Report information to decision makers.

question

Internal controls in an accounting information system help promote information integrity. Which of the following best explains the concept of information integrity?

answer

The information in AIS outputs is reliable.

question

Which of the following is NOT an example of an input to the accounting information system?

answer

Balance sheet

question

Consider the following two statements about accounting information systems: (i) AIS incorporates more problems with deterministic solutions than other areas of accounting. (ii) AIS is more integrative than other areas of accounting. Which of the statements is/are true?

answer

ii only

question

Sebastian wrote a check to pay a supplier's invoice. The check had to be signed by two company officers and was later part of a monthly bank reconciliation. The canceled check was filed under the supplier's name. The inputs mentioned in the preceding scenario are

answer

The check and the invoice

question

A typical accounting information system comprises ___ parts.

answer

Five

question

Which type of information would be most useful in deciding whether or not to create a wireless network as part of an accounting information system?

answer

Practitioner

question

Which of the following is a fact about accounting information systems?

answer

They involve interrelated parts

question

The study of accounting information systems incorporates knowledge from:

answer

Management, finance and information systems

question

Studying accounting information systems is important because it helps future accountants develop critical thinking skills and professional judgment. Which of the following situations involves the use of professional judgment: (i) developing sales budgets, (ii) printing financial statements from a computer program, (iii) evaluating internal controls.

answer

i and iii only

question

What are the 5 parts of an Accounting Information System (AIS)?

answer

Input, processes, output, storage and internal controls

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