Question

Al-Faisal Company is a well-known perfume trader in Oman. The company was established in
1976 and trading local and international perfumes through five of its stores. Recently it has added
watches, cosmetics and accessories in its inventory along with perfumes. The company has
engaged in the following transactions in April 2020.
April 5 Purchased perfumes on account from Rayyan Company OMR 1,400, terms
2/10, n/60, FOB shipping point.
7 Paid freight on purchases from Rayyan Company OMR 100.
9 Received credit from Rayyan Company for perfumes returned OMR 200.
10 Sold perfumes on account to customers OMR 1,200, terms n/30, FOB destination.
The perfumes sold has a cost of OMR 800.
11 Paid freight on April 10 sales OMR 50.
12 Purchased perfumes on account from Badriyya Company OMR 900, terms
2/10, n/30.
14 Paid Rayyan Company in full.
17 Received credit from Badriyya Company for perfumes returned OMR 40.
20 Made sales on account to customers OMR 800, terms n/30. The cost of the perfumes
sold was OMR 540.
21 Paid Badriyya Company in full.
24 Purchased perfumes on account from Khalid for OMR 1,000, terms 1/10/EOM, n/60.
27 Granted an allowance to customers for perfumes that have partially lost their
fragrance OMR 100.
30 Received payments on account from customers OMR 1,800.
Question – 2:
a. You are required to prepare journal entries to record the transactions, when the company uses;
i. Periodic Inventory System, and (3.5 Marks)
ii. Perpetual Inventory System. (3.5 Marks)
b. How modern Accounting Information System assists the management in decision making
process?

Answer 1

In this paper, we address the management’s decision making process and examine the effect of accounting information system (AIS) in PARS GARMA holding organization in making sound and effective decisions and inform the reader on how AIS influences on the management decisions in 6 major perspectives including quality, accuracy, economic, validity, speed and on time concepts. The major source of data to this research is primary data through the administration of questionnaires. Regression and correlation analysis was used for the data analysis. The findings show that accounting information system had a significant and positive role in PARS GARMA holding management decisions process in several perspectives but AIS had no significant impact on speed of decision making.