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Horngren's Financial & Managerial Accounting, The Managerial Chapters 6th Edition

Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)

Book Edition6th Edition
Author(s)Miller-Nobles, Mattison, Matsumura
ISBN9780134486857
PublisherPearson Higher Education
SubjectAccounting
What is an Accounting Information System?
Tying it all Together
How are Purchases, Cash Payments, and Other Transactions Recorded in a Manual Accounting Information System?
Try It!
How are Transactions Recorded in a Computerized Accounting Information System?

Chapter AppxB, What is an Accounting Information System?, Tying it all Together, Exercise 01

Page B-4

Here is a tip:

Information technology is the use of systems to store, retrieve and process data.

Explanation

Information technology will help the company to seamlessly process data and to communicate information to users. 

  • With the efficiency of information technology, transactions will be processed immediately and the productivity of the company will increase. 
  • Information technology is also utilized to store information and generate reports, such as financial statements.

Failure of information technology may affect, not only the communication, but also the operation itself. 

  • This may cause delays in the delivery of services to customers that may result in loss of sales. 
  • Payment to suppliers may not be paid as scheduled because of a system shutdown that may affect the credit profile of the company.

Sample Response

Information technology help companies to organize their data. If an information technology fails there will be delays in processing and communication of information that may lead to losses and operational failure of the company.

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