Monday, July 23, 2018

Accounting Information Systems (Day 01)

1. What is a goal?

A goal is something that we want to achieve in the end.

E.g. The goal of Conceptual Data Modeling is to develop an entity-relationship model that represents
the information requirements of the business.

2. What is a system in the context of Accounting Information System?

3. What is an Accounting Information System (AIS)? What is it used for?

AIS is used to provide information for decision makers. Information including

  • Financial statements
  • Managerial reports
  • Reports to meet compliance requirements
  • Information required by many different groups


An AIS is a collection of resources, such as people and equipment, designed to transform financial and other data into information.

4. What is an enterprise?


5. What is Transaction Processing System (TPS)? What is it used for?

TPS is used to process transactions by grouping them into Accounting cycles such as

  • Revenue
  • Expenditure
  • Human Resources/Payroll
  • Production
  • Financing


6. What is General Ledger/Financial Reporting System (GL/FRS)?

7. What is Management Reporting System (MRS)?

8. What is Accounting?

9. What are financial transactions and nonfinancial transactions?

A financial transaction is an economic event that affects the assets and equities of the organization, is reflected in its accounts, and is measured in monetary terms. For examples, sales of products to customers, purchases of inventory from vendors, and cash disbursements and receipts are examples of financial transactions.

Nonfinancial transactions are events that do not meet the narrow definition of a financial transaction. For example, adding a new supplier of raw materials to the list of valid suppliers is an event that may be processed by the enterprise’s information system as a transaction. Important as this information obviously is, it is not a financial transaction, and the firm has no legal obligation to process it correctly or at all.

10. Do you need an ACN if you are a sole trader?

ASIC issues an Australian Company Number (ACN) for use in all business transactions. You need this before applying for an ABN. Additionally, partnerships, trusts and companies need a separate tax file number (TFN) to do business. (Sole traders use their personal TFN when dealing with any business tax matters).

11. What is the difference between a private limited company and a sole trader?
A limited company is its own legal identity, so as a shareholder your liability is limited (hence the name 'limited by shares'). As a sole trader, there is little distinction between you and the business. Any business debts become your debts and your personal assets - including your house - are not protected.

12. Is there a difference between sole trader and self-employed?

A sole trader is personally responsible for any losses that the business makes and responsible for paying tax on profits. A sole trader is a self-employed person who is the sole owner of their business. Sole traders do not have to have a director or register with companies' house.

13. What is an ERP?

Enterprise resource planning (ERP) system: a system that integrates all aspects of an organization’s activities—such as accounting, finance, marketing, human resources, manufacturing, inventory management—into one system. An ERP system is modularized; companies can purchase the individual modules that meet their specific needs. An ERP facilitates information flow among the company’s various business functions and manages communications with outside stakeholders.

14. What is EUS?

End-user system (EUS): a system developed by users, rather than information systems professionals, to meet their information needs. An EUS often draws upon the information in existing corporate databases to meet users’ information needs.

References:
1. Hall, James A. (2014) Accounting Information Systems, 9th edition, South-western Cengage Learning.
2. Romney, M.B. & Steinbart, P.J. (2009) Accounting Information Systems, 11th edition, Prentice Hall.

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