Active Review - Active Review 1.1 Refer to the chapter opener, ...

1 © 2014 Pearson Education. All rights reserved.Active Review 1.1 Refer to the chapter opener, Meet Business Intelligence. In your opinion, how can business intelligence create value using the accounting system?Students’ opinion may differ. However, their opinion should include: Increase profitability, improve customer relationship, increase sales by targeting the right customer category, and in general improving all aspects of business activities.

1.2 Refer to the chapter opener, Meet Business Intelligence. Discuss the importance of sales data in creating business intelligence for an organization.Business intelligence allows organization to continuously monitor their sales transaction. By monitoring sales, enterprise can fine-tune other business processes such as purchasing, production, advertising, and customer service.

1.3 Pick your favorite Accounting Insight from Chapter 1. Discuss why it’s your favorite.The answer to this question depends on the student selection and his/her reason for selecting it.

1.4 What are the modules in the baseline accounting system model? Discuss the purposes and transactions associated with each module.

1.Vendors. This module encapsulates all data and business processes related to vendors. The transactions associated with Vendors module are: Create purchase Order, Receive Items, and Enter Bills.

2.Customers. This module encapsulates all data and business processes related to customers. The processes associated with Customers module are: Create Invoice, and Receive Customer Payments.

3.Employees. This module encapsulates all data and business processes related to employees. The

processes associated with Vendor module are: Enter Time and Calculate Payroll.

4.Banking. This module encapsulates all data and business processes related to organization banking. The processes associated with Banking module are: Pay Bills, Make Deposit, Pay Employees, and Pay Payroll Liabilities.

5.Financials. This module encapsulates all data and business processes related to the organization financials. The processes associated with Financial module are: Adjusting Entries, Correcting Entries, Closing, and ad-hoc financial activities.

6.Reports. This module encapsulates all data and business processes related to the accounting reports. The processes associated with Reports module are: Management Reports, Tax Reports, External Financial Reports, and Sustainability Reports.

1.5 Discuss how the features of a spreadsheet and a database are similar and how they are different.A spreadsheet shows rows and columns of a table and that is same as database table’s records and fields features. Actually, a spreadsheet row is a record and a column is a field in a database table 1.6 Discuss the potential risks if a company’s accounting system is not well secured.Unauthorized access to the accounting data and software could result in valuable information being stolen or damaged and virus or other malicious software damage accounting systems software.

1.7 Discuss the benefits of an integrated enterprise system.Accounting Information Systems The Crossroads of Accounting and IT 2e Donna Kay Ali Ovlia (Solutions Manual All Chapters, 100% Original Verified, A+ Grade) All Chapters Solutions Manual Supplement files download link at the end of this file. 1 / 4

2 © 2014 Pearson Education. All rights reserved.An integrated enterprise system allows data to be shared among various enterprise departments. For example, an advertising department can use data collected about sales to cluster customers into categories and target customers-categories with different adverting methods.

1.8 Discuss how value chain activities are related to accounting transaction cycles.

The value chain facilitates coordination of activities with suppliers and customers, including purchasing and sales transactions.

1.9 Discuss the significance of information technology to the accounting professional.

Today, most accounting systems are computerized systems. These accounting systems are installed on the enterprise computers and used on the enterprise internal networks as well as the Internet. To effectively work with computers and use accounting systems, accountants must know enough about computers and networks to be able to use computerized accounting systems.

1.10 Discuss problems that enterprises may experience with shadow data.

Shadow data little or lack of documentation and lack or inadequate security and control are two major problems experienced by enterprises.

Key Terms Check

1.11 Match the following terms and definitions.

• enterprise system
• integrated enterprise system
• business processes
• value chain
• transaction cycles
• purchasing cycle
• payroll cycle
• sales cycle
• baseline accounting system

d 1. An organizing framework for business processes, beginning with vendors and ending with customers h 2. Exchanges or transactions between an enterprise and its customers e 3. Accounting transactions related to specific business processes b 4. Shares data across functional areas within the enterprise g 5. Transactions with employees c 6. Related activities performed by an enterprise to create value by transforming input into output a 7. A system that supports business activities throughout the enterprise, including inputs, processing, and outputs f 8. Transactions related to purchasing items from vendors i 9. A model that provides an enterprise-wide view of the firm’s accounting system 2 / 4

3 © 2014 Pearson Education. All rights reserved.

1.12 Match the following terms and definitions.

• vendors module
• customers module
• employees module
• banking module
• financial module
• reports module
• adjusting entries
• correcting entries
• closing entries
• financial reports
• tax reports
• management reports
• sustainability reports

f 1. A module that relates to output from the accounting system.e 2. A module that includes adjusting and correcting entries.a 3. A module related to purchasing goods and services.d 4. A module that involves cash received and cash paid.c 5. A module related to the payroll cycle.b 6. A module related to selling the customer a product or service.m 7. Reports used to evaluate an enterprise’s sustainability performance.k 8. Reports used when filing federal, state, and local returns.l 9. Reports prepared to assist managers in making decisions.j 10. Reports that include a company’s income statement, balance sheet, and statement of cash flows.g 11. Entries to bring accounts up to date at year end.i 12. Zeros out income and expense accounts at year end.h 13. Entries to correct errors. 3 / 4

4 © 2014 Pearson Education. All rights reserved.

Practice Test

1.15 In addition to accounting systems, which of the following are member of enterprise systems?

• SCM and OPS
• CRM and SCM
• HRM and Financial
• SCM, OPS, CRM, and HR (Correct Answer)

1.16 The value chain is useful for:

• Coordinating accounting system activities.
• Coordinating activities with suppliers and customers (Correct Answer)
• Linking business values like a chain.
• Everything we do in a business.

1.13 Match the following terms and definitions.

• field
• record
• primary key
• relational database
• operational database
• business intelligence
• OLAP cubes

c 1. A unique identifier for each record.g 2. An online application that permits users to view data in a multidimensional way.b 3. A collection of related database fields.f 4.Data analytics and predictive modeling used to gain insights from data to improve the quality of business decisions.a 5. A piece of information.e 6. A database that stores transactions related to business operations.d 7. A collection of related database tables.

1.14 Match the following terms and definitions.

• people
• processes
• technology
• information technology (IT)
• IT architecture
• IT infrastructure
• system development life cycle (SDLC)
• plan
• analyze
• design
• build/buy
• install
• deploy

g 1. A framework for organizing the complex, multifaceted undertaking of developing a system.k 2. Includes testing databases and computer programs for the new system.h 3. Includes scheduling, budgeting, and staffing a project.i 4. Includes evaluating new system requirements.m 5. Using the new system on an ongoing basis and maintaining and updating it as necessary.l 6. Setting up new IT hardware, software, and databases.j 7. Prepare models for business processes and databases for the new system.b 8. One of the three keys of opportunity that focuses on how business activities are impacted.c 9. One of the three keys of opportunity that focuses on software, hardware, and networks.a 10. One of the three keys of opportunity that focuses on how employees, customers, and vendors are impacted.d 11. Consists of software, hardware, and network technology used by an organization.f 12. How specific software, hardware and networks are used to build IT architecture for an enterprise.e 13. The design or blueprint for an enterprise’s information technology.

• / 4