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Acct 307 Exam 1 Review

Acct 307 Exam 1 Review - Acct 307 Exam#1 Review Chapter 1...

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Acct 307 Exam #1 Review Chapter 1: Data becomes Information when it is organized, processed, and summarized. Information becomes Knowledge when it is shared and exploited to add value to an organization. Accounting information systems (AIS) – a transaction processing system that captures financial data resulting from accounting transactions Enterprise resource planning (ERP) systems – developed to solve the problem that AIS systems had of not being able to integrate information from various systems. With ERP systems (AIS combined with other information systems), accounts are now able to capture both quantitative and qualitative data, to collect and organize into useful information, which in turn is transformed into knowledge that can be communicated throughout an organization. Accounting information includes both financial and non-financial information, which is used by decision makers. Data warehouses - are simply central depositories for electronic data Data mining - a term used to express how managers search for and extract data from corporate computer systems. Knowledge warehouse – used to store and provide access to a wide variety of qualitative data Electronic data interchange (EDI) – the electronic transmission of data, such as purchase orders and invoices. Knowledge management tools such as knowledge warehouses, enterprise resource planning systems and electronic data interchange can reduce costs and result in faster and better decisions. Financial accounting – the area of accounting primarily concerned with the preparation and use of general use financial statements for use by creditors, investors, and other users outside the company Managerial accounting – the area of accounting primarily concerned with generating financial and non-financial information for users by managers in their decision-making roles within a company External users – i.e. stockholders, potential investors, creditors, government taxing agencies, regulators, suppliers, customers, and others outside the company
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Internal users – i.e. individual employees, teams, departments, regions, top management, and others inside the company (often referred to as mangers) The information needs of external users and internal users differ in significant ways Planning – the development of both the short-term (operational) and the long-term (strategic) objectives and goals of an organization and an identification of the resources needed to achieve them Operational planning – the development of short-term objectives and goals (typically, those to be achieved in less than one year) Strategic planning – addresses long-term questions of how an organization positions and distinguishes itself from competitors Operating activities – the day-to-day operations of business Controlling activities – the motivation and monitoring of employees and the evaluation of people and other resources used in the operations of the organization.
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