CINTO, SHAIMER 5-25-19

ACCOUNTING INFORMATION SYSTEM

1. What are the four levels of activity in the pyramid representing the business organization?
The business organization is divided into four levels of activity. These are: Top
Management, Middle Management, Operations Management and Operations Personnel.
The top Management is responsible for the setting the organizational objectives and longer-term
planning. The Middle Management is responsible for the shorter term planning and act as a
messenger for the Top Management. Operations Management is responsible for controlling the
business day-to-day and also this is where all the plans are being done. The Operations
Personnel is responsible for the manufacturing, distribution of the goods or services. The Top
Management is the one who controls the other three at the bottom and the Operations Personnel
is the one who gives profit to the Top Management.

2. Distinguish between natural and artificial systems.

Artificial systems are man-made like clocks, laptop, computers, and social systems and
informational systems. Natural systems are the opposite of artificial systems. These are seen
everywhere and naturally there like plants, animal, human being.

3. What are the elements of a system?

The elements of system are multiple components, relatedness, system vs subsystem,
and purpose, System Decomposition, and Subsystem Interdependency. The multiple
components is a system that contains more than one part. Relatedness is a common purpose
relates the multiple parts of the system. System vs Subsystem; a system is called a subsystem
when it is viewed in relation to a larger system of which it is a part and a subsystem is called a
system when it is the focus of attention. Purpose is something the system must serve whether it
may be to measure time, electrical power.

4. What is system decomposition and subsystem interdependency? How are they related?
System Decomposition is the process of dividing the system into smaller subsystem parts.
This is a way of knowing the relationship among subsystem. In this way, we can see the
relationship between the subordinates and higher-level subsystem. Each subordinate subsystem
performs one or more specific function to help achieve the overall objective of the higher-level
system. Subsystem Interdependency is an ability to achieve its goal depends on the effective
functioning and harmonious interaction of its subsystem. The two is related by the subsystem
and connects every subsystem.
5. What is the relationship among data, information, and an information system?
The data is something that are facts and can or cannot be edited, summarized or refined
and has no effect on the user’s action. Information makes the users to take an action that the
users cannot and would not take. Information system is a procedure where data are all collected,
processed into information and distributed to the users. Data and Information are sorted by the
Information System which makes the distribution of it makes it easier.

6. Distinguish between AIS and MIS.

AIS process financial and nonfinancial transaction that directly affect the processing of
financial transaction. AIS is composed of three subsystems namely the transaction processing
system which supports daily business operations; The general ledger/ Financial reporting system
which produces the traditional financial statements and; The management reporting system
which provides internal management with special-purpose financial reports and information
needed for decision making. While MIS processes nonfinancial transactions that are not
normally processed by traditional AIS.

7. What are the three cycles of transaction processing systems?

The revenue cycle, the expenditure cycle, and the conversion cycle. Each cycle captures
and different types of financial transactions.

8. What is discretionary reporting?

It is in which the organization can choose whatever information to report and how it will
present. These are typically to report internally.

9. What are the characteristics of good or useful information?

A good or useful information must be relevance who serve a purpose, timeliness means
the age of information is a critical factor in determining its usefulness, accuracy means the
information must be free from error, completeness means all the information is not missing,
summarization means the information should be aggregated in accordance with the user’s needs.

10. What rules govern data collection?

 The two rules govern the design of data collection procedures: relevance and efficiency.
The data should only capture the relevancy of the information. Data redundancy overloads
facilities and reduces the overall efficiency of the system.

11. What are the levels of data hierarchy?

The levels in the data hierarchy are attribute, record, and file. Attribute is a logical and
relevant characteristics of an entity about which firm captures data. Record is a complete set of
attributes for a single occurrence within an entity class. Files is a complete set of records of an
identical class.

12. What are the three fundamental tasks of database management?

The three fundamental tasks are storage, retrieval, and deletion.

13. What is feedback and how is it useful in an information system?

It is useful because it is an output that is sent back to the system as a source of data.

14. What are the fundamental objectives of all information systems?

The three fundamental objectives are to support the stewardship function of management,
to support management decision making, and to support the firm’s day-to-day operations.

15. What does stewardship mean and what is its role in an information system?
Management receives stewardship information they need to carry out their decision-
making responsibility.