Solutions Manual For Accounting Information Systems The Crossroads of
Accounting and IT 2e Donna Kay Ali Ovlia
Active Review
1.1 Refer to the chapter opener, Meet Business Intelligence. In your opinion, how can business intelligence
create value using the accounting system?
Students’ opinion may differ. However, their opinion should include: Increase profitability, improve
customer relationship, increase sales by targeting the right customer category, and in general improving all
aspects of business activities.
1.2 Refer to the chapter opener, Meet Business Intelligence. Discuss the importance of sales data in
creating business intelligence for an organization.
Business intelligence allows organization to continuously monitor their sales transaction. By monitoring
sales, enterprise can fine-tune other business processes such as purchasing, production, advertising, and
customer service.
1.3 Pick your favorite Accounting Insight from Chapter 1. Discuss why it’s your favorite.
The answer to this question depends on the student selection and his/her reason for selecting it.
1.4 What are the modules in the baseline accounting system model? Discuss the purposes and transactions
associated with each module.
1. Vendors. This module encapsulates all data and business processes related to vendors. The transactions
associated with Vendors module are: Create purchase Order, Receive Items, and Enter Bills.
2. Customers. This module encapsulates all data and business processes related to customers. The
processes associated with Customers module are: Create Invoice, and Receive Customer Payments.
3. Employees. This module encapsulates all data and business processes related to employees. The
processes associated with Vendor module are: Enter Time and Calculate Payroll.
4. Banking. This module encapsulates all data and business processes related to organization banking. The
processes associated with Banking module are: Pay Bills, Make Deposit, Pay Employees, and Pay
Payroll Liabilities.
5. Financials. This module encapsulates all data and business processes related to the organization
financials. The processes associated with Financial module are: Adjusting Entries, Correcting Entries,
Closing, and ad-hoc financial activities.
6. Reports. This module encapsulates all data and business processes related to the accounting reports. The
processes associated with Reports module are: Management Reports, Tax Reports, External Financial
Reports, and Sustainability Reports.
1.5 Discuss how the features of a spreadsheet and a database are similar and how they are different.
A spreadsheet shows rows and columns of a table and that is same as database table’s records and fields
features. Actually, a spreadsheet row is a record and a column is a field in a database table
1.6 Discuss the potential risks if a company’s accounting system is not well secured.
Unauthorized access to the accounting data and software could result in valuable information being stolen
or damaged and virus or other malicious software damage accounting systems software.
1.7 Discuss the benefits of an integrated enterprise system.
,An integrated enterprise system allows data to be shared among various enterprise departments. For
example, an advertising department can use data collected about sales to cluster customers into categories
and target customers-categories with different adverting methods.
1.8 Discuss how value chain activities are related to accounting transaction cycles.
The value chain facilitates coordination of activities with suppliers and customers, including purchasing
and sales transactions.
1.9 Discuss the significance of information technology to the accounting professional.
Today, most accounting systems are computerized systems. These accounting systems are installed on the
enterprise computers and used on the enterprise internal networks as well as the Internet. To effectively
work with computers and use accounting systems, accountants must know enough about computers and
networks to be able to use computerized accounting systems.
1.10 Discuss problems that enterprises may experience with shadow data.
Shadow data little or lack of documentation and lack or inadequate security and control are two major
problems experienced by enterprises.
Key Terms Check
1.11 Match the following terms and definitions. d 1. An organizing framework for business processes,
beginning with vendors and ending with customers
a. enterprise system
h 2. Exchanges or transactions between an enterprise and
b. integrated enterprise system
its customers
c. business processes
e 3. Accounting transactions related to specific business
d. value chain
processes
e. transaction cycles
b 4. Shares data across functional areas within the
f. purchasing cycle
enterprise
g. payroll cycle
g 5. Transactions with employees
h. sales cycle
c 6. Related activities performed by an enterprise to
i. baseline accounting system
create value by transforming input into output
a 7. A system that supports business activities throughout
the enterprise, including inputs, processing, and outputs
f 8. Transactions related to purchasing items from
vendors
i 9. A model that provides an enterprise-wide view of the
firm’s accounting system
,1.12 Match the following terms and definitions. f 1. A module that relates to output from the accounting
system.
a. vendors module
e 2. A module that includes adjusting and correcting
b. customers module
entries.
c. employees module
a 3. A module related to purchasing goods and services.
d. banking module
d 4. A module that involves cash received and cash paid.
e. financial module
c 5. A module related to the payroll cycle.
f. reports module
b 6. A module related to selling the customer a product
g. adjusting entries
or service.
h. correcting entries
m 7. Reports used to evaluate an enterprise’s
i. closing entries
sustainability performance.
j. financial reports
k 8. Reports used when filing federal, state, and local
k. tax reports
returns.
l. management reports
l 9. Reports prepared to assist managers in making
m. sustainability reports
decisions.
j 10. Reports that include a company’s income
statement, balance sheet, and statement of cash flows.
g 11. Entries to bring accounts up to date at year end.
i 12. Zeros out income and expense accounts at year
end.
h 13. Entries to correct errors.
, 1.13 Match the following terms and definitions. c 1. A unique identifier for each record.
g 2. An online application that permits users to view
a. field
data in a multidimensional way.
b. record
b 3. A collection of related database fields.
c. primary key
f 4.Data analytics and predictive modeling used to gain
d. relational database
insights from data to improve the quality of business
e. operational database
decisions.
f. business intelligence
a 5. A piece of information.
g. OLAP cubes
e 6. A database that stores transactions related to
business operations.
d 7. A collection of related database tables.
1.14 Match the following terms and definitions. g 1. A framework for organizing the complex,
multifaceted undertaking of developing a system.
a. people
k 2. Includes testing databases and computer programs
b. processes
for the new system.
c. technology
h 3. Includes scheduling, budgeting, and staffing a
d. information technology (IT)
project.
e. IT architecture
i 4. Includes evaluating new system requirements.
f. IT infrastructure
m 5. Using the new system on an ongoing basis and
g. system development life cycle (SDLC)
maintaining and updating it as necessary.
h. plan
l 6. Setting up new IT hardware, software, and
i. analyze
databases.
j. design
j 7. Prepare models for business processes and databases
k. build/buy
for the new system.
l. install
b 8. One of the three keys of opportunity that focuses on
m. deploy
how business activities are impacted.
c 9. One of the three keys of opportunity that focuses on
software, hardware, and networks.
a 10. One of the three keys of opportunity that focuses
on how employees, customers, and vendors are impacted.
d 11. Consists of software, hardware, and network
technology used by an organization.
f 12. How specific software, hardware and networks are
used to build IT architecture for an enterprise.
e 13. The design or blueprint for an enterprise’s
information technology.
Practice Test
1.15 In addition to accounting systems, which of the following are member of enterprise systems?
a. SCM and OPS
b. CRM and SCM
c. HRM and Financial
d. SCM, OPS, CRM, and HR (Correct Answer)
1.16 The value chain is useful for:
a. Coordinating accounting system activities.
b. Coordinating activities with suppliers and customers (Correct Answer)
c. Linking business values like a chain.
d. Everything we do in a business.
Accounting and IT 2e Donna Kay Ali Ovlia
Active Review
1.1 Refer to the chapter opener, Meet Business Intelligence. In your opinion, how can business intelligence
create value using the accounting system?
Students’ opinion may differ. However, their opinion should include: Increase profitability, improve
customer relationship, increase sales by targeting the right customer category, and in general improving all
aspects of business activities.
1.2 Refer to the chapter opener, Meet Business Intelligence. Discuss the importance of sales data in
creating business intelligence for an organization.
Business intelligence allows organization to continuously monitor their sales transaction. By monitoring
sales, enterprise can fine-tune other business processes such as purchasing, production, advertising, and
customer service.
1.3 Pick your favorite Accounting Insight from Chapter 1. Discuss why it’s your favorite.
The answer to this question depends on the student selection and his/her reason for selecting it.
1.4 What are the modules in the baseline accounting system model? Discuss the purposes and transactions
associated with each module.
1. Vendors. This module encapsulates all data and business processes related to vendors. The transactions
associated with Vendors module are: Create purchase Order, Receive Items, and Enter Bills.
2. Customers. This module encapsulates all data and business processes related to customers. The
processes associated with Customers module are: Create Invoice, and Receive Customer Payments.
3. Employees. This module encapsulates all data and business processes related to employees. The
processes associated with Vendor module are: Enter Time and Calculate Payroll.
4. Banking. This module encapsulates all data and business processes related to organization banking. The
processes associated with Banking module are: Pay Bills, Make Deposit, Pay Employees, and Pay
Payroll Liabilities.
5. Financials. This module encapsulates all data and business processes related to the organization
financials. The processes associated with Financial module are: Adjusting Entries, Correcting Entries,
Closing, and ad-hoc financial activities.
6. Reports. This module encapsulates all data and business processes related to the accounting reports. The
processes associated with Reports module are: Management Reports, Tax Reports, External Financial
Reports, and Sustainability Reports.
1.5 Discuss how the features of a spreadsheet and a database are similar and how they are different.
A spreadsheet shows rows and columns of a table and that is same as database table’s records and fields
features. Actually, a spreadsheet row is a record and a column is a field in a database table
1.6 Discuss the potential risks if a company’s accounting system is not well secured.
Unauthorized access to the accounting data and software could result in valuable information being stolen
or damaged and virus or other malicious software damage accounting systems software.
1.7 Discuss the benefits of an integrated enterprise system.
,An integrated enterprise system allows data to be shared among various enterprise departments. For
example, an advertising department can use data collected about sales to cluster customers into categories
and target customers-categories with different adverting methods.
1.8 Discuss how value chain activities are related to accounting transaction cycles.
The value chain facilitates coordination of activities with suppliers and customers, including purchasing
and sales transactions.
1.9 Discuss the significance of information technology to the accounting professional.
Today, most accounting systems are computerized systems. These accounting systems are installed on the
enterprise computers and used on the enterprise internal networks as well as the Internet. To effectively
work with computers and use accounting systems, accountants must know enough about computers and
networks to be able to use computerized accounting systems.
1.10 Discuss problems that enterprises may experience with shadow data.
Shadow data little or lack of documentation and lack or inadequate security and control are two major
problems experienced by enterprises.
Key Terms Check
1.11 Match the following terms and definitions. d 1. An organizing framework for business processes,
beginning with vendors and ending with customers
a. enterprise system
h 2. Exchanges or transactions between an enterprise and
b. integrated enterprise system
its customers
c. business processes
e 3. Accounting transactions related to specific business
d. value chain
processes
e. transaction cycles
b 4. Shares data across functional areas within the
f. purchasing cycle
enterprise
g. payroll cycle
g 5. Transactions with employees
h. sales cycle
c 6. Related activities performed by an enterprise to
i. baseline accounting system
create value by transforming input into output
a 7. A system that supports business activities throughout
the enterprise, including inputs, processing, and outputs
f 8. Transactions related to purchasing items from
vendors
i 9. A model that provides an enterprise-wide view of the
firm’s accounting system
,1.12 Match the following terms and definitions. f 1. A module that relates to output from the accounting
system.
a. vendors module
e 2. A module that includes adjusting and correcting
b. customers module
entries.
c. employees module
a 3. A module related to purchasing goods and services.
d. banking module
d 4. A module that involves cash received and cash paid.
e. financial module
c 5. A module related to the payroll cycle.
f. reports module
b 6. A module related to selling the customer a product
g. adjusting entries
or service.
h. correcting entries
m 7. Reports used to evaluate an enterprise’s
i. closing entries
sustainability performance.
j. financial reports
k 8. Reports used when filing federal, state, and local
k. tax reports
returns.
l. management reports
l 9. Reports prepared to assist managers in making
m. sustainability reports
decisions.
j 10. Reports that include a company’s income
statement, balance sheet, and statement of cash flows.
g 11. Entries to bring accounts up to date at year end.
i 12. Zeros out income and expense accounts at year
end.
h 13. Entries to correct errors.
, 1.13 Match the following terms and definitions. c 1. A unique identifier for each record.
g 2. An online application that permits users to view
a. field
data in a multidimensional way.
b. record
b 3. A collection of related database fields.
c. primary key
f 4.Data analytics and predictive modeling used to gain
d. relational database
insights from data to improve the quality of business
e. operational database
decisions.
f. business intelligence
a 5. A piece of information.
g. OLAP cubes
e 6. A database that stores transactions related to
business operations.
d 7. A collection of related database tables.
1.14 Match the following terms and definitions. g 1. A framework for organizing the complex,
multifaceted undertaking of developing a system.
a. people
k 2. Includes testing databases and computer programs
b. processes
for the new system.
c. technology
h 3. Includes scheduling, budgeting, and staffing a
d. information technology (IT)
project.
e. IT architecture
i 4. Includes evaluating new system requirements.
f. IT infrastructure
m 5. Using the new system on an ongoing basis and
g. system development life cycle (SDLC)
maintaining and updating it as necessary.
h. plan
l 6. Setting up new IT hardware, software, and
i. analyze
databases.
j. design
j 7. Prepare models for business processes and databases
k. build/buy
for the new system.
l. install
b 8. One of the three keys of opportunity that focuses on
m. deploy
how business activities are impacted.
c 9. One of the three keys of opportunity that focuses on
software, hardware, and networks.
a 10. One of the three keys of opportunity that focuses
on how employees, customers, and vendors are impacted.
d 11. Consists of software, hardware, and network
technology used by an organization.
f 12. How specific software, hardware and networks are
used to build IT architecture for an enterprise.
e 13. The design or blueprint for an enterprise’s
information technology.
Practice Test
1.15 In addition to accounting systems, which of the following are member of enterprise systems?
a. SCM and OPS
b. CRM and SCM
c. HRM and Financial
d. SCM, OPS, CRM, and HR (Correct Answer)
1.16 The value chain is useful for:
a. Coordinating accounting system activities.
b. Coordinating activities with suppliers and customers (Correct Answer)
c. Linking business values like a chain.
d. Everything we do in a business.
