Question

Ethan is an accountant for a small startup business. He is trying to decide if the business should use paper-based journals and ledgers or a spreadsheet to record transactions. He is therefore making a decision about which generic element of the AIS?

Answer 1

Ethan's decision is about the data storage medium in the AIS – paper-based or electronic. The choice will affect how the business maintains and organizes financial records.

Step-by-step explanation:

Ethan's decision about whether to use paper-based journals and ledgers or a spreadsheet to record transactions is related to the choice of the data storage medium in the Accounting Information System (AIS). The AIS is a system that helps businesses collect, store, process, and report financial information. By choosing between paper-based journals/ledgers or a spreadsheet, Ethan is deciding how the business will maintain and organize its financial records.

Paper-based journals and ledgers involve manual data entry and physical storage, while spreadsheets use electronic files. Paper-based systems require more space and are prone to errors, but they do not require specialized software or technical skills. On the other hand, spreadsheet-based systems are more efficient, flexible, and provide built-in calculations and analysis tools. Ethan should consider factors such as the company's size, budget, volume of transactions, and accounting expertise when making this decision.