Internal Information Flows and Requirements in Business

27 Questions

What is the primary difference between financial and nonfinancial transactions in an Accounting Information System (AIS)?

Financial transactions affect the assets and equities of the organization, while nonfinancial transactions do not.

Which of the following is NOT a characteristic of useful information in an Accounting Information System (AIS)?

Complexity

What is the primary purpose of the General Ledger/Financial Reporting System (GL/FRS) in an Accounting Information System (AIS)?

To produce financial statements and reports

Which of the following is NOT a function for transforming data into information in the general AIS model?

Data Interpretation

What is the primary role of the Accounting Independence principle in an Accounting Information System (AIS)?

To ensure that accounting activities are separate from the functional areas maintaining resources.

What is the primary goal of an information system in a business context?

All of the above

Which of the following is NOT a common method of organizing an organization's structure?

Segmenting by customer type

What is the primary purpose of the Transaction Processing System (TPS) in an Accounting Information System (AIS)?

To support the firm's day-to-day business operations

Which of the following is an example of an internal financial transaction in an Accounting Information System (AIS)?

Movement of raw materials into work-in-process

What is the primary difference between Accounting Information Systems (AIS) and Management Information Systems (MIS) in an organization?

AIS processes financial transactions, while MIS processes nonfinancial transactions.

What is the primary purpose of internal horizontal flows of information?

Capture transaction and operations data

In vertical information flows, what type of data travels upward?

Aggregated transaction and operations data

Why do higher levels of an organization require more aggregated information?

To reduce the need for detailed information

When is a system considered a subsystem?

When it is viewed as a component of a larger system

What happens if not all distinct parts of a system are functioning?

The system will fail

What is an information system responsible for distributing to users?

Processed information

What characterizes a transaction in the business context?

Business event

What is one of the potential advantages of Distributed Data Processing (DDP) mentioned in the text?

Improved cost control responsibility

Which of the following is NOT listed as a disadvantage of Distributed Data Processing (DDP)?

Improved cost control responsibility

In the Flat-File Model, what is identified as a potential problem?

Difficulty in updating all affected files

What does the REA model stand for in the context of accounting systems?

Resource, Event, Agent

What is the primary function of entity-relationship diagrams in accounting systems?

Modeling economic resources, events, and agents

What is a key responsibility of accountants in systems development projects?

Ensuring appropriate systems design

Why is the Database Model preferred over the Flat-File Model?

It integrates separate files easily

What does Distributed Data Processing (DDP) aim to improve in an organization?

Control over resources

In which function are accountants responsible for conceptual system design?

Determining the nature of information required

What is a common challenge associated with the Flat-File Model?

Data updating difficulties

Explore the horizontal and vertical flows of information within an organization, as well as the unique information requirements for different user groups. Understand how information needs differ based on the organizational level.

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