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Questions and Answers
What type of transactions does a Management Information System (MIS) process?
What type of transactions does a Management Information System (MIS) process?
What is the primary purpose of a Management Information System (MIS)?
What is the primary purpose of a Management Information System (MIS)?
What are the two general groups of end-users in an AIS application?
What are the two general groups of end-users in an AIS application?
What is the primary source of data in an AIS application?
What is the primary source of data in an AIS application?
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What is the primary difference between an AIS and an MIS?
What is the primary difference between an AIS and an MIS?
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What is the role of database management in an AIS application?
What is the role of database management in an AIS application?
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What is the primary purpose of information generation in an AIS application?
What is the primary purpose of information generation in an AIS application?
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What is the purpose of feedback in an AIS application?
What is the purpose of feedback in an AIS application?
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What are the two classes of transactions?
What are the two classes of transactions?
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Which subsystem of AIS produces traditional financial statements?
Which subsystem of AIS produces traditional financial statements?
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What is the primary function of the Management Reporting System (MRS)?
What is the primary function of the Management Reporting System (MRS)?
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What type of transaction would adding a new supplier of raw materials be classified as?
What type of transaction would adding a new supplier of raw materials be classified as?
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What is the purpose of the Transaction Processing System (TPS)?
What is the purpose of the Transaction Processing System (TPS)?
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What is the main difference between AIS and MIS?
What is the main difference between AIS and MIS?
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What type of transaction would a change to a customer's address be classified as?
What type of transaction would a change to a customer's address be classified as?
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What is the overall system that processes financial and nonfinancial transactions?
What is the overall system that processes financial and nonfinancial transactions?
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What is considered an enterprise's business resource in an Accounting Information System (AIS) environment?
What is considered an enterprise's business resource in an Accounting Information System (AIS) environment?
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What type of planning is top management responsible for in an Accounting Information System (AIS) environment?
What type of planning is top management responsible for in an Accounting Information System (AIS) environment?
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What is the primary function of operations management in an Accounting Information System (AIS) environment?
What is the primary function of operations management in an Accounting Information System (AIS) environment?
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What is the main difference between internal and external information flows in an Accounting Information System (AIS) environment?
What is the main difference between internal and external information flows in an Accounting Information System (AIS) environment?
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What is the main purpose of middle management in an Accounting Information System (AIS) environment?
What is the main purpose of middle management in an Accounting Information System (AIS) environment?
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What is the base of the pyramid in an Accounting Information System (AIS) environment?
What is the base of the pyramid in an Accounting Information System (AIS) environment?
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What type of information flow is related to customers, suppliers, and stakeholders interested in the firm?
What type of information flow is related to customers, suppliers, and stakeholders interested in the firm?
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How many management tiers are there in an Accounting Information System (AIS) environment?
How many management tiers are there in an Accounting Information System (AIS) environment?
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Study Notes
Management Information System (MIS)
- Processes nonfinancial transactions that traditional AIS does not normally process
- Examples of MIS application in functional areas include:
- Human resource management: employee database, payroll processing, and performance evaluation
- Marketing and sales: market research, customer database, and sales forecasting
- Financial management: budgeting, financial forecasting, and cash flow management
The General Model for AIS
- Depicts the relationship between key elements that constitute an AIS application:
- End users: external and internal users
- Data sources: financial transactions from internal and external sources
- Data collection: gathering of data from various sources
- Data processing: processing of data into useful information
- Database management: storage and management of data
- Information generation: production of useful information
- Feedback: feedback loop to ensure accuracy and relevance of information
End Users
- Divided into two general groups:
- External users: creditors, stockholders, potential investors, regulatory agencies, tax authorities, suppliers, and customers
- Internal users: management at all levels of the organization, as well as operations personnel
Data Sources
- Financial transactions from internal and external sources:
- External financial transactions: economic exchanges with other business entities and individuals outside the firm
- Financial transactions: economic events measured in monetary terms, which affect the assets and equities of the organization
- Nonfinancial transactions: events that do not meet the narrow definition of financial transactions
Accounting Information System (AIS)
- Processes financial and nonfinancial transactions that directly affect the processing of financial transactions
- Three major subsystems:
- Transaction Processing Systems (TPS): supports daily business operations with numerous reports, documents, and messages for users throughout the organization
- General Ledger/Financial Reporting System (GL/FRS): produces traditional financial statements, such as income statements, balance sheets, and cash flow statements
- Management Reporting System (MRS): provides internal management with special-purpose financial reports and information needed for decision-making
The Information Environment
- Information is considered an enterprise's business resource in an AIS environment
- Information flows out from the organization to external users, such as customers, suppliers, and stakeholders interested in the firm
- The pyramid shows that the business organization is divided horizontally into several activity levels:
- Business operations: product-oriented work of the business organization
- Operations management: directly responsible for day-to-day operations
- Middle management: accountable for short-term planning and coordination of activities
- Top management: responsible for longer-term planning and setting organizational objectives
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Description
This quiz covers the role of Management Information Systems (MIS) in processing non-financial transactions and their applications in various functional areas of a firm.
