MISY 5340 Chapter 3 Introduction to
Accounting
Financial Accounting (FI) - answer Collects the transactional data that provides a
foundation for preparing the standard portfolio of reports.
Data is used to generate financial statements to meet legal or regulatory reporting
requirements.
From an ERP Perspective, _________ is the "heart" accounting because it must
accurately reflect the financial status of the firm at any given point in time. - answer
Financial Accounting
Management Accounting (CO) - answer• Provides the information the organization
needs to effectively manage the various processes.
• Focuses on costs and revenues which is used to achieve basic business objectives
such as increasing revenues, minimizing costs, and achieving profitability.
What are the key processes in financial accounting? - answer• General ledger
accounting
• Accounts receivable accounting
• Accounts payable accounting
• Asset accounting
• Bank ledger accounting
What are the key organizational data in financial accounting? - answer• Client
• Company code
• Business area
Client - answerRepresents an enterprise that consists of multiple companies
Company code - answerRepresent the various companies within an enterprise
Financial statements are generally prepared at the ____________ level. -
answerCompany code
Business areas - answerInternal divisions of an enterprise that are used to define areas
of responsibility or to meet the external reporting requirements of an enterprise
segment.
, A Business area is often based on either the enterprise's ____________ or
_____________. - answerproduct line; geographic division
Segment - answerA division of an enterprise for which management monitors
performance (revenue, costs, profitability, etc separately from other divisions
Charts of Accounts (COA) - answerAn ordered listing of accounts that comprise a
company's general ledger.
Types of charts of accounts (COA)? - answer• Operative
• Country-specific
• Group
Operative COA - answerContains the operational accounts that are used to record the
financial impact of an organization's day-to-day transactions
It is the primary COA maintained by an organization.
Country-specific COA - answerAccounts in operative COA are mapped to alternative
accounts in country-specific COAs
Created to meet special country-specific reporting requirements
Group COA - answerContains group accounts that multiple companies within an
enterprise use to consolidate their financial reporting
Using a group COA..... - answerMakes it easy to generate consolidated financial
statements
General ledger - answerRecords the financial impacts of business process steps; it
contains much of the data needed for financial reporting
Accounts receivables accounting - answerAssociated with the fulfillment process and is
used to manage money owed by customers for goods and services sold to them
Accounts payable accounting - answerAssociated with the procurement process; record
and manage money owed to vendors for the purchase of materials and services
Asset accounting - answerUsed to record data related to the purchase, use, and
disposal of assets such as buildings, equipment, machinery, and automobiles
Bank ledger accounting - answerRecording data associated with bank transactions
Balance sheet - answerA "snapshot" of an organization's financial position at a given
moment; identifies assets, liabilities and equity
Accounting
Financial Accounting (FI) - answer Collects the transactional data that provides a
foundation for preparing the standard portfolio of reports.
Data is used to generate financial statements to meet legal or regulatory reporting
requirements.
From an ERP Perspective, _________ is the "heart" accounting because it must
accurately reflect the financial status of the firm at any given point in time. - answer
Financial Accounting
Management Accounting (CO) - answer• Provides the information the organization
needs to effectively manage the various processes.
• Focuses on costs and revenues which is used to achieve basic business objectives
such as increasing revenues, minimizing costs, and achieving profitability.
What are the key processes in financial accounting? - answer• General ledger
accounting
• Accounts receivable accounting
• Accounts payable accounting
• Asset accounting
• Bank ledger accounting
What are the key organizational data in financial accounting? - answer• Client
• Company code
• Business area
Client - answerRepresents an enterprise that consists of multiple companies
Company code - answerRepresent the various companies within an enterprise
Financial statements are generally prepared at the ____________ level. -
answerCompany code
Business areas - answerInternal divisions of an enterprise that are used to define areas
of responsibility or to meet the external reporting requirements of an enterprise
segment.
, A Business area is often based on either the enterprise's ____________ or
_____________. - answerproduct line; geographic division
Segment - answerA division of an enterprise for which management monitors
performance (revenue, costs, profitability, etc separately from other divisions
Charts of Accounts (COA) - answerAn ordered listing of accounts that comprise a
company's general ledger.
Types of charts of accounts (COA)? - answer• Operative
• Country-specific
• Group
Operative COA - answerContains the operational accounts that are used to record the
financial impact of an organization's day-to-day transactions
It is the primary COA maintained by an organization.
Country-specific COA - answerAccounts in operative COA are mapped to alternative
accounts in country-specific COAs
Created to meet special country-specific reporting requirements
Group COA - answerContains group accounts that multiple companies within an
enterprise use to consolidate their financial reporting
Using a group COA..... - answerMakes it easy to generate consolidated financial
statements
General ledger - answerRecords the financial impacts of business process steps; it
contains much of the data needed for financial reporting
Accounts receivables accounting - answerAssociated with the fulfillment process and is
used to manage money owed by customers for goods and services sold to them
Accounts payable accounting - answerAssociated with the procurement process; record
and manage money owed to vendors for the purchase of materials and services
Asset accounting - answerUsed to record data related to the purchase, use, and
disposal of assets such as buildings, equipment, machinery, and automobiles
Bank ledger accounting - answerRecording data associated with bank transactions
Balance sheet - answerA "snapshot" of an organization's financial position at a given
moment; identifies assets, liabilities and equity
