CHAPTER 3

• Information System

  •is a collection of people, procedures, software, hardware and data which works together to provide information essential to running an organizations.
• Parts of an Information System

  People

  Procedures

  Software

  Hardware

  Data
• Accounting Information System

  • An ______ which will generate reliable financial information needed by the decisionmakers in a timely manner.
• Accounting Information System

  • An ____ is the combination of personnel, records and procedures that a business uses to meet its need for financial information.
• Accounting manual

  • specifies the policies and procedures to be followed in accumulating information within the accounting information system.
• CYCLE IN AIS

  • The Accounting Process
  • Accounting Information
  • Decisions Makers
  • Economic Activities
• computer based transaction system

  A _____ maintains accounting data separately from other operating data
• Database systems

  • reduce inefficiencies and redundancies that often exist in transaction-based systems
• Controlled by the enterprise

  • Control is the ability to obtain the economic benefits and restrict the access of others
• Past events

  • The event must be past before an asset can arise.
• Future economic benefits

  • These are evidenced by the prospective receipt of cash. This could be cash itself, an account receivable or any item which may be sold.
• Obligations

  • These may be legal or not.
• Transfer economic benefits

  • This could be a transfer of cash, or another property, the provision of a service or the refraining from activities which could be otherwise be profitable.
• Past transactions or events

  • refer to discussion in assets.
• Complementary nature of assets and liabilities

  • As should be evident from the above, assets and liabilities are seen as mirror images of each other.