13.

Database Management

The organization’s database is its physical repository for financial and nonfinancial data. We use the term database
in the generic sense. It can be a filing cabinet or a computer disk. Regardless of the database’s physical form, we
can represent its contents in a logical hierarchy. The levels in the data hierarchy—attribute, record, and file—are
illustrated in the figure below.

DATA ATTRIBUTE. The data attribute is the most elemental piece of potentially useful data in the database.
An attribute is a logical and relevant characteristic of an entity about which the firm captures data. The attributes
shown in the figure are logical because they all relate sensibly to a common entity—accounts receivable (AR).
Each attribute is also relevant because it contributes to the information content of the entire set. As proof of this,
the absence of any single relevant attribute diminishes or destroys the information content of the set. The addition
of irrelevant or illogical data would not enhance the information content of the set.

RECORD. A record is a complete set of attributes for a single occurrence within an entity class. For example, a
particular customer’s name, address, and account balance is one occurrence (or record) within the AR class. To
find a particular record within the database, we must be able to identify it uniquely.

Therefore, every record in the database must be unique in at least one attribute. This unique identifier attribute is
the primary key. Because no natural attribute (such as customer name) can guarantee uniqueness, we typically
assign artificial keys to records. The key for the AR records in the figure is the customer account number. This is
the only unique identifier in this record class.

FILES. A file is a complete set of records of an identical class. For example, all the AR records of the organization
constitute the AR file. Similarly, files are constructed for other classes of records such as inventory, accounts
payable, and payroll. The organization’s database is the entire collection of such files.

PREPARED BY: SAMSON WORKU (MBA) 1

14. Systems Development Life Cycle (SDLC)

The process of developing AIS includes the activities of (a) System Analysis—Identification of business
problems. (b) Systems Design—propose solutions. (c) Systems Implementation—carrying out the proposals for
changes.

Self-Assessment Questions

1. The basic principles of an accounting information system include all of the following except:
A. Cost-effectiveness.
B. Useful output.
C. Flexibility.
D. Periodicity.
2. Which of the following is not an advantage of computerized accounting systems?
A. Data is entered only once in computerized accounting systems.
B. Computerized accounting systems provide up-to-date information
C. Computerized accounting systems eliminate entering of transaction information.
D. Computerized accounting systems eliminate many errors resulting from human intervention.
3. the final phase the installing and revision of an accounting information systems that involves carrying out the
proposals for changes in the system is termed _________
A. Systems Analysis
B. Systems Design
C. Systems Implementation
D. None of the Above
4. All of the information (name, GPA, major, etc.) about a particular student is stored in the same ______.
A. File.
B. Record.
C. Attribute.
D. Field.

Match the description listed in the right column with the information characteristic listed in the left
column.

Column A Column B
_________ 1. Relevance A. The report was carefully designed so that the data contained in
the report became information to the reader.
_________ 2. Reliable B. The manager was working one weekend and needed to find some
information about production requests for a certain customer. He
was able to find the report on the company’s network.
_________ 3. Complete C. The data in a report was checked by two clerks working
independently.
_________ 4. Timely D. An accounts receivable aging report included all customer
accounts.
_________ 5. Understandable E. A report was checked by three different people for accuracy.
_________ 6. Verifiable F. An accounts receivable aging report is used in credit-granting
decisions.
_________ 7. Accessible G. An accounts receivable aging report was received before the
credit manager had to make a decision whether to extend credit
to a customer.
H. None of the above

PREPARED BY: SAMSON WORKU (MBA) 2