Which key AIS function involves approving or denying credit?

The key function of an Accounting Information System (AIS) that involves approving or denying credit is indeed the function where credit decisions are made. In a typical business process, when a customer applies for credit, it is essential for the company to assess the customer's creditworthiness. This involves analyzing credit history, payment behavior, and other financial metrics to determine whether to extend credit to the customer or deny the request.

This function is crucial because it directly impacts the company’s cash flow and overall financial risk. By approving or denying credit, the AIS assists in maintaining the integrity of the company's financial practices, ensuring that credit is only extended to those customers who are likely to pay their debts. Therefore, this function is integral to sales management and credit risk assessment within the AIS framework.

The other functions mentioned primarily focus on different aspects of the sales process. Recording sales invoices deals with documenting transactions once a sale is made, transmitting inventory releases to the warehouse relates to the logistical side of fulfilling an order, and automatically updating with sales information involves maintaining accurate and timely records of sales activities without directly addressing the approval of credit. These functions, while important, do not pertain to the assessment of credit applications.