Information Systems

  • A system is a group of integrated parts that have the common purpose of achieving some objectives.
  • Information system consists of network of all communication channels used within an organisation.
  • It combines people, hardware, software and processes. Information system is an integrated set of components for collecting, storing, processing, and communicating information.
  • Information technology is dedicated to provide users with the services necessary to achieve the ultimate goals. Information technology has a lot of advantages like it has made globlisation possible, a lot of new jobs are created, communication has become easy, etc.  
  • Transaction processing system processes data transactions in database system. Process of TPS includes data collection, data editing, data manipulation, data storage, output generation and query report.  
  • Computerised accounting system implies that various stages of accounting process – recording, classification and summarising are done with the help of computers. It has far superior features as compared to manual accounting in terms of speed, generation of reports etc.
  • Accounting software is application software that records and processes accounting transactions within functional modules.
  • Types of accounting software are readymade software, customised software and tailor made software.
  • Accounting information system consists of people, procedure, data, technology and control.
  • Characteristics of AIS include collection of resources, transformation of data, generation of reports, historical in nature etc.
  • Scope of AIS includes sales order processing, inventory control, record of accounts receivables, payroll, general ledger etc.
  • It is connected to different departments like human resources, marketing and manufacturing department.
  • Management Information system is a planned system of collecting, processing, storing and disseminating data in the form of information required to carry out the functions of management.
  • MIS is a system or process that provides the information necessary to manage an organisation effectively.
  • Every accounting system is a part of accounting information system which in turn is a part of organisation’s management information system.
  • Accounting reports are reports generated by computers. Silent features of accounting report include relevant to user, timely presentation, accurate, complete, summarisation etc.  
  • Types of accounting reports are creditors report, customer report, exception report, responsibility report, etc.
  • There are different steps in designing an accounting report.

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  • Q1

    How is Management Information System (MIS) related to Accounting Information System (AIS)?

    Marks:2
    Answer:

    Conventionally, Management Information System (MIS) was also perceived as day-to-day financial accounting system that is used to keep control over financial record keeping activities, but now days it is widely recognised as a broader concept and accounting system is a sub-component. Hence, Accounting Information System (AIS) has become a part of Management Information System (MIS).

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  • Q2

    What is the purpose of Transaction Processing System (TPS)?

    Marks:2
    Answer:

    The purpose of a typical Transaction Processing System (TPS) is to record, process, validate and store transactions that occur in the various functional areas of a business for subsequent retrieval and usage.

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  • Q3

    What are the essentials of a good accounting report?

    Marks:2
    Answer:

    Every accounting report must be able to fulfill the following criterion:
    (i) Relevance
    (ii) Comprehensive
    (iii) Timely
    (iv) Accuracy
    (v) Completeness
    (vi) Summarisation

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  • Q4

    Name six external users of accounting information.

    Marks:1
    Answer:

    The external users include the investors, creditors, financiers, government, suppliers and the society at large.

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  • Q5

    Define Accounting Information System.

    Marks:1
    Answer:

    An accounting information system is a system of collecting, processing, summarising and reporting information about a business organisation in monetary terms.

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