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What is a system?
Two or more components interacting to achieve a goal.
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What is goal conflict?
Components of a system act in their own interest, disregarding the overall goal.
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What is goal congruence?
Components of a system contribute to the common goal.
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What is data?
Facts, recorded and stored.
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What is information?
Processed data.
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What is used for decision making, data or information?
Information.
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What is information overload?
Too much information - makes it harder to decide.
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What makes information useful?
The information has to be:
- - relevant
- - reliable (free from error or bias)
- - complete (not omit important aspects)
- - timely
- - understandable (presented in a useful and intelligible format)
- - verifiable (2 independent, knowledgable sources agree)
- - accessible (timely & understandable [available to user when needed and in usable format])
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What is the value of information?
Benefit produced by info, minus cost producing it.
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Give 3 examples of benefits of information.
- reduced uncertainty
- improved decisions
- improved ability to plan and schedule activities.
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What is a business process?
Set of related, coordinated, structured activities that help achieve an organizational goal.
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What are the 5 major business processes/transaction cycles?
revenue cycle
expenditure cycle
production/conversion cycle
HR/payroll cycle
financing cycle
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What is the revenue cycle?
Goods/services are sold for (future) cash.
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What is the expenditure cycle?
Aquisition of resources to perform services or produce goods for (future) cash.
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What is the production/conversion cycle?
Materials are transformed into finished goods.
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What is the HR/payroll cycle?
Employees are hired, trained, compensated, evaluated, promoted, and terminated.
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What is the financing cycle?
Receive money from investors (incl. banks)
Pay investors (incl. banks).
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What do accounting information systems do?
- - Collect
- - Process
- - Store
- - Report
Data and Information.
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Accounting is seen as the _______ of business.
Accounting is seen as the language of business.
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What are the 6 components of an AIS?
- people who use the system
- procedures and instructions used to collect, process, and store data
- data about the organization
- software used to process data
- information technology infrastructure, incl. com,puters, peripheral devices, and network communication devices used in the AIS
- internal controls and security measures that safeguard AIS data.
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Accounting Information Systems are considered the ________ - ________ _________ .
Accounting Information Systems are considered the information-providing vehicle.
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What are the 3 business functions AIS fulfill?
1. Collect and store data
2. Transform data into information
3. Provide controls to safeguard data.
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How can an AIS add value to an organization?
- - Improve quality and reduce cost of products/services
- monitor machinery and notify of malfunctions => maintain product quality, reduce waste, lowers cost
- - Improve efficiency
- timely information improves just-in-time manufacturing
- - Sharing knowledge
- users can search database and find assistance
- - Improve supply chain
- sales and marketing cost reduction by direct access to AIS for customers
- - Improve internal control structure
- can protect system from fraud, errors, failures, and disaster
- - Improve decision making
- more acurate data, identification of critical situations, etc.
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What is a value chain?
Activities that provide value to customers.
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What are the 5 primary activities of a value chain?
1. Inbound logistics
2. Operations
3. Outbound logistics
4. Marketing/Sales
5. Service.
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What is inbound logistics (in the value chain)?
Receiving, storing, distributing materials to produce products/services.
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What are operations (in the value chain)?
Activities transforming inputs into outputs (products/services).
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What are outbound logistics (in the value chain)?
Distributing products/services to customers.
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What are marketing and sales (in the value chain)?
Activities that help customers buy products/services.
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What is service (in the value chain)?
Post-sale support to customers.
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What are the 4 support activities to the value chain?
1. Firm infrastructure
2. HR
3. Technology
4. Purchasing.
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What is the firm infrastructure (as support activity to the value chain)?
Admin activities that allow the organization to function.
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What is HR (as support activity to the value chain)?
Employee management (recruiting, hiring, training, etc).
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What is technology (as support activity to the value chain)?
Activities that improve the product/service (R&D, IT, product design).
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What is purchasing (as support activity to the value chain)?
Procurement of raw materials/supplies needed to create product/service.
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