Accounting Information Systems

End of Chapter Activities

1. Reading review questions:

a. What is an accounting information system?

Is a set of interrelated activities, documents, and technologies designed to collect data, process it, and report information of diverse group of internal and external decision makers in organization.

b. Describe the purpose of the FASB Conceptual Framework. Discuss how it relates to your study of accounting information systems.

The Financial Accounting Standards Board (FASB) is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States in the publics interest.

It relates to the study of Accounting Information Systems by:

* Capturing data on the elements of financial statements.

* Transforming those data into relevant and reliable information.

* Recognizing and adapting to the cost-benefit constraint.

c. List and discuss the five parts of a generic accounting information system.

Inputs: Are used to collect data and get them into the system; they include source documents that system users need such as invoices, purchase orders, checks.

Processes: Transform the data into information, can be manual and automated (Journals, ledgers, information technology).

Outputs: Provide some of the information decision makers need in organizations. Typical output include general purpose financial statements and other reports.

Storage: Refer to the methods for keeping data secure and available (paper- based or electronic).

Internal controls:Designed to safeguard assets, promote operating efficiency, encourage adherence to management rules and ensure reliable financial reports.

d. Compare and contrast sponsored information, practitioner / public...