Jhell Cortes Dela Cruz

Discussion Questions: (Just be honest, answer the questions below without going back from the top.
Place your answer below the given questions, there will be no wrong answers only relevant or not.
Answers based on opinions are highly appreciated.)

1.What are the 3 major subsytems of AIS and explain each?

a.Organizational Structure-An organizational structure is a system that shows how certain activities are
directed in order to achieve the goals of an organization. These activities can include rules, roles, and
responsibilities.It also distribute the degree of authority and responsibility assigned to managers.The
organizational structure also determines how information flows between levels within the company.It
also shows the managers who are responsible for controlling and planning for the company

b.Operation System-is a collection of primary physical processes which involves business

processes,operations and activities which forms a value of chain that transform resources into final
products or services. This value of chain could reach out and include suppliers and customers. This
system provides chain from suppliers to customers which may include four primary processes,acquiring
raw materials,producing finished goods, storing finished goods and shipping the goods to the customers.

C.Information System- it is designed to provide the needs of the firm to align well with the other
subsytem. It meets the criteria of producing relevant information that is useful in making informed
judgements. This subsytem needs should consider the nature and characteristics of other subsytems to
become productive.

2.What is the use or organizational chart in the business?

 Organizational charts are the graphical representation of an organization’s structure. It is

typically use to illustrate the relationships and chains of command within the organization. It is
also used to determine the different departments and head of each department. Moreover,
names of employees and job positions are generally depicted in boxes or circles with lines
showing the link and connection between other employees and departments. Through looking
at the organizational chart, people can easily understand the designed if the organization,, its
number of levels, and where each employee fits into the organization.

3.What is the difference between Decentralized & centralized structures under organizational
structures?

 In Centralized structure the hierarchy of decision-making structure and processes are

handled strictly at the top or the executive level while in Decentralized structure executives
or business owners assign or delegate cosiderable degree of authority to middle-level and
lower level managers within the structure.
  Centralized organizational structures rely on one individual to make decisions and provide
direction for the company while in Decentralized organizations rely on a team environment at
different levels in the business and every level has autonomy to make decisions.
 Decentralized structures may struggle with variety of individuals having different opinions on
a particular business decision while in Centralized structure top level management make the
decisions and centralized structure can be efficient regarding business decisions.
 Decentralized structure are more flexible and open to change. There is room for innovation
and individual thought processes while in Centralized structure employees tend to not favor
change and less innovative compare to decentralized structure.

4.What are business events and what is its significance to the business?

 Business events is significant in business because it provide the primary and support the
activities of the operational system. It si business events that the management plan to direct ang
control.This business events also reflects the success and failure of the firm since everyday
business typically engage in multiple business events. Moreover,identifying business events are
the first step in accounting and without this business events the responsible parties cannot
process information for the intended users.

5.What is the difference between Financial Accounting Cycle and Managerial Accounting Cycle?

 Financial accounting cycle summarize , classify and record accounting transactions in journals
and ledgers. The main concerned of this cycle is to provide outputs primarily includes financial
statements and reports while the Managerial Accounting Cycle collects and processes data to
generate information to help aid managers in making informed judgements relating to the
planning and controlling, management ,and evaluating responsibility centers.

6.Explain the difference between a transaction file and a master file

Transaction file records transactions in chronological order .For instance, a transactionthat

involves credit purchases are recorded in purchase journal files. While, Master file records similar or
related accounts example accounts receivable,accounts payable and etc.Transaction file is often the
first file in which received transaction data is recorded while Master File is the next file where related
accounts are recorded.Transaction file is more critical than master file because if it is done wrong,
master file can’t be done right while master file is dependent upon the correctness of a transaction file .

7.Provide your idea on how data maintenance & data modification differs?

 Data maintainance records both changes in transactions and nontransactions while Data
Modification records changes only in nontransaction.
 Data maintainance includes data update and data modification while Data modification is part
of data maintenance.

8.Why is it that charts of accounts are considered as the backbone of AIS?

  Chart of Account is considered the backbone of AIS because without this it will be difficult to
provide structure to the AIS. It segregate expenditures, revenue, assets and liabilities so that
viewers can easily overview the company’s financial health. A well-designed Chart of Account
not only support the structure of AIS but also helps make the information provided by AIS more
reliable

9.Provide your idea on how data maintenance & data modification are just the same?

 Both makes the the records of master file current.

 Both is useful in data management.

10.What is the difference between revenue cycle & expenditure cycle?

 The revenue cycle receives information from the production relating to the finished goods
available for sale whil the expenditure cycle receives information pertaining to the raw materials
needed
 The primary objective of the expenditure cycle is to minimize the total cost of acquiring and
maintaining inventory, supplies, and services while the primary objective of revenue cycle is to
maximize the revenue in relation to the sale of finished gooods to customers.
 Revenue cycle encompasses three key business events while Expenditure cycle encompasses
two key business events

Chapter 2: Identification (color it red)

Journals 1.It is also known as transaction files.

Ledgers 2.It is also known as master file.

Document Flowchart 3.It emphasizes the hard-copy inputs and outputs and their flow through
organizational units, from “inception to final disposition”.

System Documentation 4.It is often in the form of charts, such as flowchart or data-flow diagram.

Data Modification 5.it refers to non-transaction changes that do not always recur in a cycle.

Data Update 6. It typically involves at least one transaction file & one master file.

General Journal 7.it is a file containing stored data – can be used to generate a trial balance and
subsequently, financial statements.
Managerial Accounting Cycle 8.It collects and processes data to generate information to support
decision making.

Transaction Journal 9. It is often the first file in which received transaction data is recorded.

Financial Accounting Cycle10.It captures and records accounting transactions in journals and ledgers.

Expenditure Cycle 11.It encompasses two key business events or transactions: purchases and
cash disbursements.

Revenue Cycle 12.it encompasses three key business events or transactions: solicitation of
projects, project execution and delivery, and cash receipts.

General Ledger and Financial Reporting Cycle13. This cycle is unique in that the processing of
individual transactions is not its sole or even its most important function.

Transaction Cycle 14.It is the sequence of events that begins with ordering merchandise and ends
with paying for the merchandise.

Business Events 15. It is also called transactions, which are steps within the physical and
financial processes of firms.

Operational System 16.It is the firm’s collection of primary physical processes.

Network Structures 17.It represents an interconnected but non-hierachical structure that is both
flexible and fluid.

Decentralized Structures 18. Under this structure, a considerable degree of authority is delegated to
middle-level and lower level managers within the structure.

Matrix Organizational Structure19. It blends functional and project-oriented structures.

Hierarchical Structure 20.Under this type of arrangement, the activities and operations of a firm are
subdivided, with the levels of management being arrayed vertically, much like silos.

Organizational Chart 21.It is a diagram that depicts an organizational structure.

Organizational Structure 22.It is the means by which the managers of a firm direct and coordinate the
set of activities and operations.

Controls 23.They enable a system such as a firm to monitor operations and processes, so as to
identify and correct deviations from plans.

Objectives 24.Simply refers to the goals or motivating forces of a firm.

Environment 25.It composes the surroundings that lie beyond a firm’s boundary.
Chapter 2 true or False (color it red)

TRUE 1. System documentation is in the form of charts, such as a flowchart or a data-flow diagram.

FALSE 2. There are three categories of procedures; namely: Data Collection, Data Modification and
Information Generation. ______

FALSE 3. Data Classification and Coding typically involves at least one transaction file and one master
file. ______

TRUE 4. Chart of accounts permits ordering of ledger accounts by account numbers within the general
ledger._______

TRUE 5. There are 2 files that are dominant in AIS; namely Journals and Masterfiles. ______

FALSE 6. Managerial Accounting Cycle captures and records accounting transactions in Journals and
Ledgers. _____

FALSE 7. Transactions files is to Journals while masterfiles is to General Journals. ______

FALSE 8. Resources management cycle is often the first file in which transactions are received and
recorded.

TRUE 9. The general ledger and financial reporting cycle incorporates accounting related processing
steps rather than business events. _______

TRUE 10. The revenue cycle encompasses three key business events or transactions: namely: solicitation
of projects, projects execution and delivery and cash receipts.

FALSE 11. The sequence of events that begins with ordering merchandise and ends in paying for the
merchandise is an example of expenditure cycle. __________

FALSE 12. As per AIS, all Business events are accountable transactions but not all accountable
transactions are business events. ________

TRUE 13. Decentralized organization structure provides a considerable degree of authority to the
middle-level and lower level managers within the structure. ______

TRUE14. All Independent operation units are decentralized structures, but not all decentralized
structures are independent operating units. _______

TRUE 15. Network Structure represents an interconnected but non-hierarchical structure that is both
flexible and fluid.