Financial Information System

Financial Information System.

Q1. Define financial information system?

* It support financial managers regarding:-

1. Financing of a business.
2. Allocation and control of financial resources with in a business.

Q2. What are the different categories of financial information system?

* Basically there are four main categories of financial information system:-

o Cash management.
o Investment management.
o Capital budgeting.
o Financial planning.

Q3. Define the Cash management?

* Collect all cash receipts and disbursement (Real time/ periodic).
* Daily, weekly and monthly forecast.

Q4. Define Investment management?

* Excess cash is invested in short term and low risk marketable securities or in higher return/ higher risk alternatives.

Q5. Define Capital budgeting?

* It includes Long-term expenditure proposals evaluation.
* Capital budgeting evaluates profitability and financial impact of proposed capital expenditures.

Q6. Explain the Financial forecasting and planning?

* It uses spreadsheets and other financial planning software to evaluate the present and projected financial performance of a business.
* Determine financing needs of a business and analysis alternative method of financing.

Q7. Is the financial information system needs information technology?

* Yes, the financial analyst use Information technology(i.e. Internet, Extranet) to know:-

1. Economic situation.
2. Business operation.
3. Types of financing available.
4. Interest rates.
5. Stock prices.

* That helps him to develop an optimal financing plan for the business.

Q8. Define the Accounting Information System?

* Accounting information system is the oldest and widely used information system.
* Accounting information system is based on double entry book keeping concept.
* In this we done all the entry of all the business transactions.

Q9. What are the different accounting information systems that are widely used?

* The widely used accounting information system are:-

1. Order processing.
2. Inventory Control.
3. Accounts receivable.
4. Accounts Payable.
5. Payroll and
6. General ledger.

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