Accounting 3600 Chapter 1

Front 1

system

Back 1

set of interrelated components that work together to achieve a goal

Front 2

subsystems

Back 2

smaller parts that make up most systems

Front 3

goal conflict

Back 3

subsystem activities not consistent with the achievement of the larger system goals

Front 4

goal congruence

Back 4

subsystem goals are in line with the larger system's goals

Front 5

data

Back 5

facts that are collected, recorded, stored and processed by an information system

Front 6

1. events
2. resources
3. agents

Back 6

3 things that data is collected about

Front 7

information

Back 7

data that has been organized and processed into something that has meaning and given to a user for decision making

Front 8

information overload

Back 8

bad decisions that arise from providing too much information

Front 9

value of information = benefits of providing information - costs associated

Back 9

value of information equation

Front 10

1. relevance
2. reliability
3. completeness
4. timeliness
5. understandability
6. verifiability
7. accessibility

Back 10

7 characteristics of information

Front 11

relevance

Back 11

reduces uncertainty by allowing the user to predict what will happen/confirm what has already happened

Front 12

reliability

Back 12

information is free from error/bias, accurately portrays events that occurred

Front 13

completeness

Back 13

all information has been provided, nothing is missing

Front 14

timeliness

Back 14

information is available when needed by deadline

Front 15

understandability

Back 15

information is comprehendible for user

Front 16

verifiability

Back 16

different users given the same information will arrive at the same conclusions

Front 17

accessibility

Back 17

information is available whenever the user needs it

Front 18

accounting information system

Back 18

a system that collects, stores, records and processes data into information that is provided to decision makers

Front 19

1. collect/store data about events/resources/agents
2. process data into meaningful information for decision making
3. provide adequate internal controls to ensure company assets are safeguarded and available when needed and accurate

Back 19

3 objectives of accounting information systems

Front 20

1. primary activities
2. support activities

Back 20

value chain

Front 21

primary activities

Back 21

directly provide value to customers

Front 22

support activities

Back 22

permit primary activities to happen effectively/efficiently

Front 23

1. inbound logistics
2. operations
3. outbound logistics
4. marketing and sales
5. service

Back 23

5 primary activities

Front 24

1. firm infrastructure (accounting, admin, legal, AIS)
2. human resources
3. technology
4. purchasing

Back 24

4 support activities

Front 25

supply chain

Back 25

value chains of different companies linked together

Front 26

1. degree of structure
2. scope of decision

Back 26

classification of decisions (two types)

Front 27

structured decisions

Back 27

repetitive, routine decisions; minimum information needed, low-level employees, automated decisions

Front 28

semi-structured decisions

Back 28

answer not obvious, require some subjective judgements

Front 29

unstructured decisions

Back 29

non-repetitive, non-routine decisions, require a great deal of subjective judgements

Front 30

1. operational control
2. management control
3. strategic planning

Back 30

decision classification - 3 scopes

Front 31

operational control

Back 31

related to performance of day to day tasks; structured decisions

Front 32

management control

Back 32

how to use company resources to meet company objectives; semi structured decisions

Front 33

strategic planning

Back 33

setting company objectives and establishing policies to be followed to meet objectives; unstructured decisions

Front 34

1. revenue cycle
2. expenditure cycle
3. production cycle
4. HR/payroll cycle
5. financing cycle

Back 34

5 transaction cycles

Front 35

revenue cycle

Back 35

all customer transactions; give product/service in order to get cash

Front 36

expenditure cycle

Back 36

supplier transactions, give cash to get materials/supplies

Front 37

production cycle

Back 37

transactions related to the production of a good; give materials/labor to get a finished product

Front 38

HR/payroll cycle

Back 38

employee transactions give cash to get labor

Front 39

financing cycle

Back 39

investor/creditor transactions; give cash (interest) to get cash