DK Goel Solutions Class 11 Accountancy Chapter 25 Introduction of Accounting Information System

Short Answer Questions

Question 1. Write a detailed note on Transaction Processing System (TPS).

Solution  1: They are the computerised systems that perform and record the daily routine transactions which are necessary to conduct the business. TPS serve the organisation at the operational level.

Processes of Transaction Processing System:

1. Data Collection:- It gathers all data needed to complete one or more transactions either manually or using devices like scanners and point-of-sale equipment.
2. Data Editing:- It is the process of checking the data for validity and completeness.
3. Data Validation:- It is process of validating the data for correctness and then correcting the same if errors are found.
4. Data Manipulation:- It is process of performing calculations.
5. Data Storage:- It is process of placing transaction data info one or more databases.
6. Output Generation:- It is the process of creating reports and outputting records.
7. Question uery Support:- It is process of making available the mechanism that empowers the users of TPS to query upon the stored data and extract the required information in required format.

Question 2. Name different information systems.

Solution  2: Below are the name of information systems:-

1.) Executive Support System (ESS)

2.) Management Information System (MIS)

3.) Decision Support Systems (DSS)

4.) Transaction Processing Systems (TPS)

Question 3. Define AIS.

Solution  3: An Accounting information System is a system of collecting, processing, summarising and reporting information about a business organisation in monetary terms.

Question 4. Name AIS sub-systems.

Solution  4: There are four main sub-systems of an AIS namely:-

1.) Input

2.) Process

3.) Output

4.) Control

Question 5. What is meant by Accounting Information System? List four features of a good Accounting Information System.

Solution  5: An Accounting information System is a system of collecting, processing, summarising and reporting information about a business organisation in monetary terms.

The main characteristics of AIS are as follows:

1.) AIS helps in handling and manipulating accounting and financial transactions of an organisation.

2.) AIS is responsible for meeting information needs by generating reports. These reports are two types:

(a) Reports for the outsiders

(b) The Internal Reports

3.) AIS is helping in producing futuristic data in the form of budget forecasts etc.

4.) AIS is helpful in maintaining accounting information as per the guidelines of the law.

Question 6. What are the various purpose of AIS?

Solution  6: Accounting Information systems serve six important purposes which are:

1. Sales order Processing
2. Inventory Control
3. Accounts Receivable
4. Accounts Payable
5. Payroll
6. General Ledger

Question 7. Bring out the relationship between MIS and AIS.

Solution  7: A management information system is an information system that generates accurate, timely and organised information to help managers make decisions, control process, solve problems, supervise activities and track progress. Accounting information system identifies, collects, process and communicates economic information of an organisation to a wide variety of users.

Accounting information system is one of the function information systems and management information system has a link with all the function information systems of an organisation.

Question 8. Write a note on relationship between Accounting Information System, Manufacturing Information System and Human resource system.

Solution  8: The three functional departments are mutually related. The human resource department sends a list of number of workers, their category their level of skill etc. to the manufacturing department and to the accounts department. The manufacturing department on receiving such list sends a report of level of production achieved by each worker and other deductions to be made from their wages on various accounts. This report is send by the manufacturing department to both Accounts department as well as the HR department. The accounts department on receiving such reports make its own calculations of the various statutory payments and dues od the workers and make the final payments and send the report of the same to both HR Department as well as the manufacturing department to monitor the performance of the workers.

Question 9. Bring out the relationship between AIS and Marketing Information System.

Solution  9: The business process in the manufacturing department involve the following activities:

(a) Determination of plans and schedules

(b) Issue of material requisition forms

(c) Issue of stock procurement orders

(d) Issue of stock

(e) Issue of stock

(f) Payment to suppliers

The accounting sub-system transaction cycle therefore includes:-

(a) Processing of purchases orders

(b) Advance to suppliers

(c) Stock updation reports

(d) Report of Accounts Payable

Very Short Answer Questions

Question 1. Name two information system used in an organisation.

Solution  1:

(i) Executing Support System

(ii) Management Information System

Question 2. What is Accounting Information System?

Solution 2: An Accounting information System is a system of collecting, processing, summarising and reporting information about a business organisation in monetary terms.

Question 3. Give two feature of Accounting Information System.

Solution 3:

1.) AIS helps in handling and manipulating accounting and financial transactions of an organisation.

2.) AIS is responsible for meeting information needs by generating reports. These reports are two types:

(a) Reports for the outsiders

(b) The Internal Reports

Question 4. Give two purpose of Accounting Information System.

Solution 4:

 (i) Sales order processing

(ii) Inventory Control

Question 5. What is Management Information System?

Solution 5: A management information system is an information system that generates accurate, timely and organised information to help managers make decisions, control process, solve problems, supervise activities and track progress.