Chapter 2 Solutions Foundational Concepts of the AIS
Turner/Accounting Information Systems, 2e
Solutions Manual
Chapter2
Concept Check
1. d
2. c
3. b
4. c
5. a
Discussion Questions
13. (SO 1) What is the relationship between business processes and the accounting
information system? As the systematic steps are undertaken within a business
14. (SO 1) Why is it sometimes necessary to change business processes when IT
systems are applied to business processes? When IT systems are applied to
business processes, some of the detailed transaction data may no longer be taken
16. (SO 2) What is the purpose of source documents? Source documents capture the
Chapter 2 Solutions Foundational Concepts of the AIS
17. (SO 2) What are some examples of turnaround documents that you have seen? An
18. (SO 2) Why would the training of employees be an impediment to updating legacy
systems? One of the advantages of legacy systems is that they are well supported
1.
19. (SO 2) Why is it true that the accounting software in and of itself is not the entire
accounting information system? The accounting software is not the entire
accounting information system; rather, it is a tool that supports the organization’s
unique business processes. The software must often be customized to meet the
needs of the organization and to integrate well with the manner in which transactions
20. (SO 2) How is integration across business processes different between legacy
systems and modern, integrated systems? Integration across business processes
within a legacy system is extremely challenging and costly, as those systems are
usually not based on user-friendly interfaces that are difficult to modify. It is also
difficult to find programmers to perform such tasks. The result is that organizations
21. (SO 3) How does client-server computing divide the processing load between the
client and server? In client-server computing, the processing load is assigned to
Chapter 2 Solutions Foundational Concepts of the AIS
22. (SO 3) Why do you think the client computer may be a better computer platform for
presentation of data? The client computer is better for presentation of data because
23. (S04) What are the distinguishing characteristics of cloud computing? Cloud
computing is a centralized approached to computing, whereby computing services
24. (S04) Why do you think a company would benefit from using cloud computing rather
than client server computing? The primary benefits of cloud computing are in the
areas of access, scalability, and cost savings. Companies are likely to benefit from
using cloud computing when their employees may need to access and read data
25. (SO4) If your personal data were stored on a computer in cloud computing, would
you have any concerns about it? Student responses may vary, and although the
26. (SO 5) Why do you think there are different market segments for accounting
software? There are different market segments for accounting software to support
27. (SO 5) How would accounting software requirements for large corporations differ
from requirements for small companies? Larger companies tend to need more
28. (SO 5) What are some of the differences between ERP systems and accounting
software for small companies? ERP systems are multimodule software systems
Chapter 2 Solutions Foundational Concepts of the AIS
29. (SO 5) Why would accounting software development companies be interested in
expanding their software products into other market segments? Software
development companies and software vendors often attempt to increase the appeal
30. (SO 6) Given the business and accounting environment today, do you think it is still
important to understand the manual input of accounting data? Manual input of data
31. (SO 6) What are the advantages to using some form of IT systems for input, rather
than manual input? Using IT systems for input has the advantages of reducing the
time, cost, and errors that tend to occur with manual data input.
32. (SO 6) Why would errors be reduced if a company switched input methods from
33. (SO 7) In general, what types of transactions are well suited to batch processing?
Batch processing is best suited to applications having large volumes of similar
transactions that can be processed at regular intervals, such as payroll.
34. (SO 7) Why might the time lag involved in batch processing make it unsuitable for
some types of transaction processing? By necessity, batch systems involve a time
Chapter 2 Solutions Foundational Concepts of the AIS
Therefore, when constantly up-to-date information is needed by users on a timely
basis, batch processing is likely to be unsuitable for transaction processing.
35. (SO 7) How would real-time processing provide a benefit to managers overseeing
business processes? Real-time processing is beneficial for business managers
36. (SO 8) How do internal reports differ from external reports? Although internal and
37. (SO 8) What are some examples of outputs generated for trading partners?
Invoices and account statements are examples of outputs generated for customers;
whereas checks and remittance advices are examples of outputs sent to vendors.
38. (SO 8) Why might it be important to have internal documents produced as an output
of the accounting information system? It is important to produce internal documents
39. (SO 9) How does documenting a system through a pictorial representation offer
benefits? A pictorial representation of an accounting information system is
beneficial because it provides a concise and complete way for accountants to
analyze and understand the procedures, processes, and the underlying systems that
capture and record the accounting data.
Brief Exercises
40. (SO 1) Think about your most recent appointment at the dentist’s office. Describe
the business process that affected you as the patient/customer. In addition, describe
the administrative and accounting processes that are likely to support this business.
Chapter 2 Solutions Foundational Concepts of the AIS
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The dental office would need to have specific steps in place for recording the
services provided to each patient so that they can be properly billed and reported.
These steps may be very detailed, especially in instances where patient fees must
be allocated between dental insurance companies and the patients themselves.
41. (SO 2) Describe the purpose of each of the following parts of a manual system:
a. source document – captures the key data of a transaction, including the date,
purpose, entity, quantities, and dollar amounts.
b. turnaround document – provides a connection between different parts of the
accounting system by serving as the output of one system and the input to
another system in a subsequent transaction.
c. general ledger – provides details for the entire set of accounts used in the
organization’s accounting systems.
42. (SO 2) Consider the accounting information system in place at an organization
where you have worked. Do you think that it was a manual system, legacy system,
or an integrated IT system? Describe one or two characteristics of that accounting
information system that lead you to your conclusion.
Student responses are likely to vary greatly, as they may refer to any work
Chapter 2 Solutions Foundational Concepts of the AIS
technologically advanced computer systems with Internet interfaces, which are
typically marked by efficiencies in terms of limited paperwork and user-friendly
interfaces.
43. (SO 2) Suppose that a company wants to upgrade its legacy system, but cannot
afford to completely replace it. Describe two approaches that can be used.
44. (SO 4) Both Gmail and iCloud for iTunes were mentioned as examples of cloud
computing. Can you describe any other examples of cloud computing? Student
45. (SO 5, 7) Consider the real world example of Cole Haan presented in this chapter.
a. Use Exhibits 2-3 and 2-4 to help you determine the approximate range of Cole
Haan’s annual revenues. Since Cole Haan’s ERP system, falls in the High End or
Tier 1 market segment, the company’s revenues must be over $100 million.
b. What are the advantages Cole Haan likely realized as a result of having real-time
data available? The advantages to real-time data processing include:
• reduced errors, since the system checks inputs and corrects errors
immediately
46. (SO 6) Using IT systems to input accounting data can reduce costs, time, and errors.
Give an example showing how you think IT systems can lead to these reductions
(cost, time, and errors). Student responses may vary. The responses below apply to
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Using IT systems to input data can help save time, such as when bar code systems
at a checkout line can reduce the checkout time to a fraction of the time required to
47. (SO 8) Identify whether the following reports would be categorized as trading partner
documents, internal documents, internal reports, or external reports:
a. daily cash receipts listing – internal document
b. accounts receivable aging – internal report
c. wire transfer of funds to a vendor – trading partner document
d. customer price list – trading partner document
48. (SO 8) Which type of accounting information system reports would likely be
prepared most frequently by financial accountants? By managerial accountants?
Financial accounts are most likely to prepare external reports (such as financial
49. (SO 9) Identify which of the cardinal relationships apply, from the following:
a. component part – product Many to many
b. customer – product Many to many
Problems
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50. (SO 2) Suppose that a large company is considering replacing a legacy system that
is nearing obsolescence. Describe any aspects of this decision that the company
should consider.
When considering whether or not to replace a legacy system, a company should
conduct a cost-benefit analysis. A business organization may decide to maintain a
legacy system if it determines that the replacement costs would be too high. In such
cases, the organization would likely place strong emphasis on the advantages of its
51. (SO 1, 9) Visit the campus bookstore at your university. From what you see
happening at the bookstore, try to draw a process map of how the processes at that
store serve students, the customers.
Representations.xls
52. (SO 5) Look at Exhibit 2-4 and pick one accounting software product from the
midmarket segment and one software product from the tier 1 ERP segment. Using
those brand names of software, search the Internet for information about those
selected. However, the modules within the midmarket products may not be fully
integrated or may be less complex than the Tier 1 ERP systems.
53. (SO 6) Using an Internet search engine, search for the term “RFID.” From the results
you find, describe how RFID will be used as an input method.
RFID stands for radio-frequency identification. RFID technology helps companies
identify and manage large lots of goods, typically received and stored in cartons or
Chapter 2 Solutions Foundational Concepts of the AIS
54. (SO 3) Using an Internet search engine, search for the terms “client–server” and
“scalable.” From the results you find, explain why client-server systems are scalable.
Scalable systems have the ability to handle growth or increased capabilities. Thus,
55. (SO 4) Using an Internet search engine, search for the terms “Amazon elastic
cloud.” Describe what you find. Why do you believe it is called elastic?
Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides
resizable compute capacity in the cloud. It is designed to make web-scale computing
easier for developers.
Amazon EC2’s simple web service interface allows users to obtain and configure
capacity with minimal friction. It provides complete control of users’ computing
Cases
56. Pictorial representations of a drive-through window at a fast food chain.
Student responses are likely to vary, but may be similar to those shown in the
Microsoft Excel file “Chapter 2 Solutions Pictorial Representations.xls
57. Pictorial representations of a college’s parking services processes.