Final Exam Study Guide

5820 Words Mar 19th, 2012 24 Pages
Accounting 211
Study Guide for Final Exam
Chapters 7 – 12

Chapter 7:

1. Terminology Accounting information system People, records, and methods that collect and process data from transactions and events, organize them in useful forms, and communicate results to decision makers Accounts payable ledger Subsidiary ledger listing individual creditor (supplier) accounts
Accounts receivable ledger Subsidiary ledger listing individual customer accounts.
Batch processing Accumulating source documents for a period of time and then processing them all at once such as once a day, week, or month.
Cash disbursements journal Special journal normally used to record all payments of cash; also called cash payments
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2. An accounting information system – its principles and components- Control principle prescribes that an accounting information system have internal controls. Internal controls are methods and procedures allowing managers to control and monitor business activites. Relevance principle prescribes that an accounting information system report useful, understandable, timely and pertinent information for effective decision making. The compatibility principle prescribes that an accounting information system conform with a company’s activities, personnel, and structure. The flexibility principle prescribes that an accounting information system be able to adapt to changes in the company, business environment, and needs of decisions makers. The cost-benefit principle prescribes that the benefits from an activity in an accounting information system outweight the costs of that activity. The five basic components of an accounting information system are source documents, input devices, information processors, information storage, and output devices. 3. Technology related concepts - hardware, software, source documents, input, processing, output, storage, etc. and know examples of each- Source documents examples include bank statements and checks, invoice from supplies and cash register files. Input devices examples are keyboards, scanners and modems. Information processors examples are web-based application service providers. Information storage
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