Quiz 1: Accounting Information Systems and Firm Value
Accounting information system is not always computerized because the computerized system also depends on manual record keeping. Thus, option 'a' is incorrect. Accounting information system always report financial and Non-Financial information both. Thus, option 'b' is incorrect For understanding the Accounting information system CITP designation is not compulsory. Thus, option d is incorrect The accounting information system will record, process and report all the Non-Financial and Financial information. Thus, option c is correct. Hence, the correct option is
Value chain: The overall implementation from first stage of production to the final stage of service is called Value chain. This implementation provides the data that can become useful information that might be help in making decisions. The entire transfer of information from business requirement and business event to the maintaining data and information for making decisions is called as information value chain. The information value chain starts with the identification of requirements of business and ends with final decisions taken by management. Company needs to know how much CD it should have distributed to every retailer (Business requirements) it will collect the information on CD sales (Business event). After that company can analyze the data and turn data into information that helps to make decisions to management. The information value chain can be shown the purchase of CD at best buy in the following way: The sale from CD can be recorded as revenue and deducts all costs associated with it and after that remaining revenue will add or (deduct) from corporate income. This will help to determine the profitability of company. The particular CD's which at best buy those all are recorded in the information. This will help to its suppliers that which CD are selling and which type of CD might be recorded in the information. This information helps to marketing department also for understand the expectation of the customers and identify the demographic segment of sale. The CEO can analyze the profitability associated with CD and identify the demographic area of high demand of CD's. Hence, CEO could analyze the performance of product due to information value chain.
Information: Data that is definite, timely, and relevant to a problem can increase understanding and leads to certainty are known as information. The Information helps in taking decisions, improving knowledge and provides a better way for resolving the problem. (a)Predictive value: Predictive value refers to the data or information that is based on individual expectation. Prediction is most important for taking right decision regarding the collection of information. Predictive value provides right way to collect right information in right way. Thus, option (a) is incorrect. (b)Timeliness: Timeliness refers to the time limit in which information must reach to the user. Timely information can provide a way to take a corrective action against the uncertainty. Timeliness is the most important aspect related to the collecting information, information must be collected within time period otherwise data becomes void. Thus, option (b) is incorrect. (c)Verifiable: The information would be verifiable. Decision making is based on information hence the all information is supported by source of documents. Information is not biased it should be collect from some reliable source. Thus, option (c) is incorrect. (d)Expensive to generate: It is the cost of generate the information. It is related to how much cost incurred in generates the information. Thus, option (d) is correct. Hence, the correct option is .