Accounting Information System

Accounting Information SystemChan Chee Tatt 0111913Lim Chian Yuh 0111746Loo Yee Chyi 0110324Michelle Tan Zhi Ling 0110319Yeung Pui Yee 0111616

Types of business : Fast Food Restaurant

McDonalds (NYSE: MCD) is the worlds largest string involving hamburger fast food restaurant, providing about 68 million customers regular within 119 nations. Headquartered in United States, the corporation started out within 1940 to be a barbecue restaurant managed through Richard and Maurice McDonald; within 1948 many people reorganized their enterprise to be a hamburger endure employing manufacturing range principles. Businessman Ray Kroc joined up with the corporation to be a franchise agent within 1955. He subsequently obtained the particular string from McDonald brothers as well as oversaw it is world-wide increase.

McDonalds restaurant is operated by franchisee, an affiliate, or the corporation by itself. This corporations gross income come from the rent, royalties and fees compensated from the franchisees, and also product sales in company-operated restaurants. McDonalds gross income matured 27 percent above the four years closing in 2007 to $22.8 billion, as well as 9 percent progress in working revenue to $3.9 billion.

McDonalds mainly sells burgers, cheeseburgers, poultry, French fries, breakfast time goods, soda pops, milkshakes as well as desserts. With reaction to adjusting buyer likes, the company provides broadened it's menus to incorporate salads, wraps, smoothies and fruit.2FOUR (4) characteristic that make information useful and meaningful for decision making.

a. Four (4) characteristics that make information useful and meaningful for decision making :

Relevant Accessible Timely Reliable3FOUR (4) characteristic that make information useful and meaningful for decision making.

Relevant

Relevance accounting information is the compilation of a companys financial dealings and helps decision makers to make prediction about future. Since the implementation of GST, it is mandatory for all GST registered business to maintain their accounting records for 7 years to meet GST requirements as well as ensure relevant information. In addition, issuance of Tax Invoice generated by accounting information system in all sales transactions is one of the crucial element to fulfil GST requirement and ensure right decision making. For example, McDonald will issue a Tax Invoice for all sales transactions to meet GST requirement and decision making purpose. Cannot be denied that accounting information system provides management with useful information and data needed to determine a business whether it is at loss or a profit and measures business transaction. Management is required to review the price of their goods and services based on relevant information such as financial statement and exclude the element of sales tax and service tax in order to make decision after the implementation of GST. For instance, the decision to remain the menu prices and absorb GST for particular item at McDonald is needed relevant information on financial statements and others.

4FOUR (4) characteristic that make information useful and meaningful for decision making.

2. Accessible

Accessible is another crucial characteristic of useful information which is information stored in a way that it can be easily accessed at any time. Particular business used to keep customer details on the system. For instance, McDonald fulfils consumer demands for delivery items to your front door which it can access customers details easily in the software such as house address. If a particular business is unable to access customers information at any time, it will be affect the customer from making a decision to purchase the items. Likewise, if the accounting system goes down before the manager can process the sales figures or access the customer information it will prohibit the manager to make a right decision. Hence, accessible is an important characteristic that make information useful and meaningful for decision making as users need to have information available to them any time.

5FOUR (4) characteristic that make information useful and meaningful for decision making.

3. Timely

Timely is a quality subset of relevant. Information must be provided in time for the purpose which it is required to make the decision. Information received too late will be irrelevant. The quality of timeliness requires both recording the recording the financial transaction in the appropriate accounting period and generating accounting reports as soon as all data are posted. If a particular company wants to analyse current profit and loss then they will need to access current sales figure instead of the sales figures from 10 years ago. Likewise, for instance, new accounting standards or changes in financial reporting requirements in McDonald could affect the decision making results which management should access current financial report to make decision instead of the previous one due to the changes.

6FOUR (4) characteristic that make information useful and meaningful for decision making.

4. Reliable

Reliability deals with the truth of information or the objectivity with which it is presented. You can only use the information confidently if the information is valid and free from bias. If the information is not reliable, it cannot be used to make quality business decisions. Financial information is supported by evidence and independent or multiple individuals is able to check them to see whether such information is faithfully represented which comes up with the same result in order to inform strategic decision making. In other words, information is verifiable if auditors and other third parties can measure and evaluate companys financial statements and end up with same result. Since the implementation of GST, a GST auditor in McDonald is required to check the GST accounting process, GST tax invoices and GST reports in order to meet the audit standard from GST departments and the management is able to make good decision.

7FOUR (4) benefits for value of information which can be adopted via AIS.

b. FOUR (4) benefits for value of information which can be adopted via AIS :

Reduce uncertainty Improve Decisions Improve Planning Improve Scheduling

8FOUR (4) benefits for value of information which can be adopted via AIS.

1. Reduce UncertaintyReduce the doubt and uncertainty in their transaction records as all transactions made are being recorded in the AIS and mistakes can be known easily.Compared to before, all transactions are being recorded by writing down in a book and mistakes will be made easily without knowing.

Reduce Uncertainty

It reduces the doubt and uncertainty in their transaction records as all transactions made are being recorded in the AIS and mistakes can be known or found out easily because every calculation is made by the computer. If mistakes were made, the calculation will not be balance and the system will show an error when you try to save.Compared to before when AIS is not implemented, all those transactions are being recorded by writing it all down in a book and mistakes will be made easily without us knowing. When mistakes are not being identified, every calculation will be wrong and we will not know if the company is making a profit or loss.

For example, in a fast food restaurant, since its always crowded and cashier have to record down the transactions quickly and they might make some mistakes easily but with the AIS, they can just record down all those transactions quickly without and mistakes.

9FOUR (4) benefits for value of information which can be adopted via AIS.

2. Improve DecisionsImprove the decisions made as it is easy to identify the problems and inventory stocks can be checked easily with just a click.

Before when AIS was not being used, they have to search it in those books they recorded to find the stocks in their inventory to make sure if purchases for inventory are needed.

2. Improve Decisions

It improves the decisions made as it is easy to identify the problems and inventory stocks can be checked easily with just a click because every single thing related to the company is being recorded in the AIS. Then we will not have too much or too less stocks in the inventory. Before when AIS was not being used, they have to search the inventory stocks in those books that they have recorded to find the leftover stocks in their inventory to make sure if purchases of stock for inventory are needed. If the wrong book were being used as reference for the current year inventory, it might lead to too much or too less stocks in the inventory.

For example, in a fast food restaurant, if the inventory stocks were being calculated wrongly or wrong information is being used, there might be a surplus of stocks in the inventory or even shortages. If there were a surplus of stocks, the leftover or remainder stocks might rot and it will end up being a loss and if there were a shortage of stocks, the restaurant might not be able to continue working since there is no leftover stocks. With the use of AIS, such incident will never happen.

10FOUR (4) benefits for value of information which can be adopted via AIS.

3. Improve planning profits and losses income statement can be get instantly and plans can be decided quickly Before implementation of AIS, its hard and take times to determine sales that bring most profit to the company

3. Improve planning

With AIS, Profits and Losses Income Statement can be get instantly and plans can be decided quickly. It can help the company in reduce losses and maximize profits in more efficient and effective way. Before the implementation of AIS, with complex account of a business, its hard and take some times to determine which sales bring the most profit to the company.

For example, in a fast food restaurant, by the information provide by AIS , the burgers and fries combo set is a hot sales item, company can immediately start to plan to buy more ingredient for the combo set and sell more which brings more profits to the company.

11FOUR (4) benefits for value of information which can be adopted via AIS.

4. Improve scheduling

The information from AIS is lively update, manager can immediately notice if there is a over-budget or not and start scheduling. If the company actual expense number is over the budgeted number. The company can make a research and make a new arrangement to the excess expense.Before the implementation of AIS, it take a lot of effort and time to prepare a budget report and takes time to identify the problem of excess expense by searching all the accounts in the business. After problem identified, it needs some time to make arrangement with AIS, it at least can save some time.

For example, in a fast food restaurant. If the budget reports show the purchase of the burger bread price is higher, the manager can find for another cheaper supplier to save the cost, reduce expense.

12FIVE (5) primary activities of AIS which can add value to an organization.

c. FIVE (5) primary activities of AIS which can add value to an organization :

1. Inbound logistics2. Operation3. Outbound logistics4. Marketing and sales5. Services

13FIVE (5) primary activities of AIS which can add value to an organization. 1. Inbound logistic purchases raw materials and raw vegetables from suppliers to increase their labour and capital, as well as the production

Inbound logistic

McDonalds that purchases some raw materials and some raw vegetable from its fixed, it is be defined as suppliers, it can increasing the labour and capital, therefore will increase the production. Beside that, McDonalds also has system which is vertical combination by a replacement of suppliers. These are the two reasons that have done for this system because of to reduce the cost value and to assure the top quality of the product. These main supplies of MD are milk and beef to use in the products which are get from the farm. Others suppliers include local grocery stock that supply McDonalds with fresh. For an example, vegetables, drinks, sugar and flour which are the items that can get in form local grocery.

14FIVE (5) primary activities of AIS which can add value to an organization. 2. Operation

2. Operation

Before McDonalds invested the fast food operation system to some restaurant they did make the food quickly and fast serve to the customer. These restaurants are employed short-order cooks, who are specialized in making fast food that are not require for a long preparation time. A short- order cook must have a skill and training, and good cooks in high demand. However, when using a skilled cook to make a food quickly, it will increase to use unskilled workers. Thus, McDonald brothers also had changed the interior design of the kitchen. They changed different kind of equipment and stations for preparing much more variety food. The Speede kitchen had included a large grill where a person able to make more burgers and a fryer where a person can make more French fries. Moreover, a soda fountain and milkshake machine for beverages and desserts and it will also place a counter to let customer make their order. In additional, the mass production process needs each of the restaurants chain to have a distribution network to carry the food to every restaurant. In some chain, a restaurant will keep track that inventories of wrappers, cups, food, and others items. But in other way, some restaurants have a computer will automatic keep track of what does the restaurant needs and what should have on hand, or the distribution centre ships the require item on a fixed schedule of waiting for a request from the restaurant. These are be done to increase the affiance of the supply chain in terms of buying policies, capacity, and technology selections.

15FIVE (5) primary activities of AIS which can add value to an organization.

3. Outbound logistic

McDonalds is to remain committed to provide the good quality of food and the best service to customer. This is how we want to work with franchisees, employees, and suppliers to serve a balanced array of food choices and provide the full information of nutrition for every customer to make their own sound decision. Regarding to the level of restaurant, McDonalds fully concerned on waste management, sustainable packaging, and energy conversation. They decide to be more innovation and improving their operations in order to build more sustainable. Next, we will decorate and design our menu to be more modernize that goes through customer experience, and we will provide the excellent service to customer to let them enjoy all the experience of McDonalds.

16FIVE (5) primary activities of AIS which can add value to an organization.

4. Marketing and sales17FIVE (5) primary activities of AIS which can add value to an organization.

5. Services

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