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Cms 302 Accounting Information Systems Question Paper
Cms 302 Accounting Information Systems
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2011
UNIVERSITY EXAMINATIONS: 2011/2012
YEAR III EXAMINATION FOR THE BACHELOR OF COMMERCE
CMS 302 ACCOUNTING INFORMATION SYSTEMS
(DAY & EVENING)
DATE: APRIL 2012 TIME: 2 HOURS
INSTRUCTIONS: Answer Question One and Any other Two Questions
QUESTION ONE
You are given summarized information about two firms in the same line of business, A and B.
Land 80 260
Building 120 200
Less Depreciation 40 80 0 200
Plant 90 150
Less Depreciation 70 20 40 110
180 570
Stocks 80 100
Debtors 100 90
Bank 0 10
180 200
Creditors 110 120
Bank 50 160 20 0 120 80
200 650
Capita b/forward 100 300
Profit for year 30 100
130 400
Less Drawings 30 40
100 360
Land revaluation 0 160
Loan (10% pa) 100 130
200 650
Sales 1,000 3,000
Cost of sales 400 2000
A B
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Required:
a) Create a flexible chart of accounts for the above business report (3 Marks)
b) Produce a table of 3 profitability ratios and 3 liquidity ratios for both businesses (12 Marks)
c) Write a report briefly outlining the strengths and weaknesses of the two businesses. Include
comment on any major areas where the simple use of figures clued be misleading (5 Marks)
QUESTION TWO
Required:
a) Explain in details the full functionality of ANY FOUR the commands on the above
QuickBooks toolbar given above (8 Marks)
b) How do you setup a user in QuickBooks? (3 Marks)
c) How do sell on credit in QuickBooks (3 Marks)
d) How do you activate the inventory account in QuickBooks? (3 Marks)
e) Explain how you create financial statements (balance sheet and income statement in
QuickBooks (3 Marks)
QUESTION THREE
a) Distinguish between the Systems Development Life Cycle (SDLC) and the Enterprise Resource
Planning (ERP) implementation processes. Highlight the step sequence and the related controls
(8 Marks)
b) Discuss the information processing systems in accounting. Highlight the decision support
systems, spreadsheets and the executive information systems (7 Marks)
QUESTION FOUR
The production and inventory managers of Freddy Company, a fast-growing manufacturer of outdoor
clothing, recognize that they need a better system for tracking orders and maintaining raw materials
inventory. The manual job order and inventory cards currently in use were adequate when the firm was
smaller. However, now many orders are not completed by their promised dates, partially finished
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batches often wait several weeks for backordered raw materials, and substantial amounts of raw
materials are often left over after production runs. These excess materials cannot be used and are
eventually written off.
Job order and raw materials inventory cards are only updated once a week, and the updating process
takes a week. When customers inquire about their orders, production-expediting clerks estimate the
percentage of completion and a shipping date. But these estimates are almost always wrong. Customers
like the manufacturer’s clothing, but many of them are beginning to hint that they will be reluctant to
place further orders because the manufacturer can’t seem to provide reliable delivery dates.
Freddy’s operating managers have unsuccessfully tried to convince the president and vice president of
the need to improve the timeliness of information flow between inventory and production. But the
president and vice president steadfastly believe that the key factor in their success is the creative design
of the company’s product lines, not its information systems. The executives believe that customers will
wait for the clothing because consumers want to buy their products. As proof, the president notes that
last year, other manufacturers began imitating the company’s clothing designs. Furthermore, the
president expresses concern that automating inventory and production control would cost too much
and the conversion process would cause too much trouble.
Required:
The production and inventory managers of Freddy Company have asked you o help them make a last
attempt to convince the president and vice president that a new information system is essential to the
continued success of the firm.
a) Identify five problems associated with the existing system
b) Identify the relevant information that should be gathered to support the decision of whether or
not to automate
c) Recommend an effective approach for developing and implementing a new system for
inventory and production control. Be specific in explaining your approach (15 Marks)
d) How to create a new company b) how to create vendors c) how to create items d) how to
activate inventory e) how to create customers f) how to access reports (9 Marks)
e) Explain the following, using QuickBooks:
f) How to buy an inventory item
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g) How it can be shown that the inventory item bought above updated the financial statements.
Which financial statement will it update?
h) How to shown on the screen the standard Balance sheet of a company and the standard income
statement of the same company (6 Marks)
QUESTION THREE
a) Discussion the Accounting Life Cycle, explaining the sequence followed and why each step is
necessary (8 Marks)
b) Compare and contrast the Systems Development Life Cycle (SDLC) and the Enterprise
Resource Planning (ERP) implementation (12 Marks)
QUESTION FOUR
Explain briefly the following accounting software concepts: (15 Marks)
a) Accounting application packages
b) Electronic spreadsheets
c) Financial modelling and decision software packages
d) Database management systems packages
e) Wordprocessing software packages
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