(Test Bank) Accounting Information Systems

Hurt, 4

Business

Test Bank

4th Edition

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Test Bank for Accounting Information Systems, The downloadable file consists of 1840 pages, and the total size of the file is 7.14 MB. Purchase now only for highly discounted price.

Author(s): Hurt

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1-1 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. Chapter 01 Role and Purpose of Accounting Information Systems Multiple Choice Questions 1. An accounting information system is a set of interrelated: A. Activities and documents only. B. Activities and technologies only. C. Documents and technologies only. D. Activities, documents and technologies. 2. The components of an accounting information system are designed to collect ___ and report ___. A. Data; information B. Data; data C. Information; information D. Information; data 1-2 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 3. An accounting information system is defined by the text as a set of three interrelated elements. Which of the following choices best gives an example of each element? A. Buying inventory, selling inventory, balance sheet B. Buying inventory, sales invoice, general ledger software C. Selling inventory, sales invoice, balance sheet D. Selling inventory, writing a check, general ledger software 4. An accounting information system transforms inputs into outputs via processes such as: A. Journalizing transactions and posting them to the ledger B. Identifying the elements of the FASB Conceptual Framework C. Always utilizing information technology D. Recognizing and adapting to the cost -benefit constraint 5. Which of the following best fits the definition of an accounting information system explained in the text? A. A checkbook register B. A publicly -traded corporation's financial statements C. Processed source documents leading to the general purpose financial statements D. An Excel spreadsheet of financial statement ratios 1-3 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 6. April compiled checks, receipts and invoices, then entered them into Quickbooks. She printed out her financial statements and took them to the bank as documentation for a loan application. In that scenario, checks, receipts and invoices could be referred to as: A. Documents and data B. Data and information C. Documents and information D. Documents, data and information 7. Claudia borrowed money from her bank, signing a five -year note payable. She then calculated the monthly payment needed to pay off the loan within three years. Which of the following statements is/are most true? A. The required monthly payment is an ex ample of "information," as the term is used in the definition of an accounting information system. B. The five -year note payable would be considered a "technology" if it were prepared with computer software. C. Both the required monthly payment is an example of "information," as the term is used in the definition of an accounting information system and the five -year note payable would be considered a "technology" if it were prepared with computer software are true. D. Neither the required monthly payment is an example of "information," as the term is used in the definition of an accounting information system nor the five -year note payable would be considered a "technology" if it were prepared with computer software is true. 1-4 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 8. Claudia borrowed money from her bank, signing a five -year note payable. She then calculated the monthly payment needed to pay off the loan within three years. Based on the definition of an accounting information system provided in the text, the five -year note paya ble could be considered: (i) an input, (ii) an output, (iii) a document. A. I and II only B. I and III only C. II and III only D. I, II and III 9. Eugene is a self -employed business owner. In February 2011, he gathered together his income and expense records for 2010. He used them, along with appropriate software, to prepare his tax return, which he then transmitted to the Internal Revenue Service. Has Eugene used an accounting information system based on the definition provided in t he text? A. Yes, because he used software to prepare his tax return. B. Yes, because all elements of the definition are present. C. No, because all accounting information systems must produce general purpose financial statements. D. No, because no internal decision maker is mentioned. 1-5 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 10. The vice president for customer service of First United Bank determined that Lee had overpaid his mortgage. The bank sent Lee a letter asking him if he wanted a refund of the overpayment or if he wa nted to apply it to future mortgage payments. Has the vice president for customer service used an accounting information system based on the definition provided in the text? A. No, because no mention is made of software. B. No, because the letter does not constitute an output. C. No, because no mention is made of general purpose financial statements. D. Yes, because all elements of the definition are present or implied. 11. Accounting information systems is an important area of study for future accountants because: (i) Developing a strong accounting information system helps achieve some of the components of the FASB Conceptual Framework of Accounting, (ii) Studying AIS helps students develop many of the core competencies suggeste d by the AICPA, (iii) Acquiring knowledge about AIS helps students learn more about common business processes. A. (i) and (ii) only B. (ii) and (iii) only C. (i) and (iii) only D. (i), (ii) and (iii) 12. Accounting information systems is an important area of study for future accountants because a well -designed AIS can respond to many elements of the FASB Conceptual Framework. All of the following are parts of the conceptual framework except: A. Princi ples of debit and credit B. Objective of financial reporting C. Elements of financial statements D. Qualitative characteristics of accounting information 1-6 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 13. Which of the following best explains why AIS is an important area of study for future accountants? A. AIS connects other areas of accounting, such as intermediate and cost accounting. B. AIS connects accounting with other subjects, such as finance and management. C. Both AIS connects other areas of accounting, such as intermediate and cost accounting and AIS connects accounting with other subjects, such as finance and management. D. Neither AIS connects other areas of accounting, such as intermediate and cost accounting nor AIS connects accounting with other subjects , such as finance and management. 14. AIS is an important area of study for future accountants because a well -designed AIS can recognize and adapt to the cost -benefit constraint. Which of the following statements is most true? A. Nonfinancial costs and benefits are less important than financial costs and benefits in designing an AIS. B. Resistance to change is a potential cost when making changes to the AIS. C. Financial statement users benefit from more information when it comes from the AIS. D. Source documents should be electronic, rather than paper -based, because electronic documents are more cost effective. 15. AIS is an important area of study for future accountants because a well -designed AIS can respond to many elements of the conceptual framework. Which of the following best pairs an element of the conceptual framework with a specific example of that element? A. Relevance, land reported at historical cost B. Consistency, land reported at historical cost C. Matching, land is not depreciated D. Gain, difference between historical cost and current market value for land used in operations 1-7 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 16. AIS is an important area of study for future accountants because a well -designed AIS can respond to many elements of the conceptual framework. Which of the following statements is most true? A. Land is reported as an asset on the balance sheet; assets are o ne element of financial statements in the conceptual framework. B. The difference between land's current market value and its historical cost is reported as a gain on the income statement; gains are one element of financial statements in the conceptual framework. C. Because of the qualitative characteristic of consistency, publicly traded corporations cannot change their accounting methods. D. Because of the qualitative characteristic of reliability, publicly traded corporations cannot change their accounting methods. 17. AIS is an important area of study for future accountants because a well -designed AIS can respond to many elements of the conceptual framework. Which of the following statements about qualitative characteristics of accounting information is most true? A. Reliability is more important than relevance. B. Relevance is more important than reliability. C. Reliability must sometimes be sacrificed to attain relevance. D. Tradeoffs between relevance and reliability violate the cost -benefit constraint. 1-8 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 18. VTR Corporation's accounting information system recently reported the following information: Cost of goods sold, $1,500. Inventory, $15,000. Unearned service fees, $3,000. Service fees earned, $8,000. Which element of financial statements is not included i n the preceding data? A. Assets B. Equity C. Expense D. Liabilities 19. Which of the following elements of the conceptual framework fit within the same category? A. Economic entity, historical cost B. Conservatism, historical cost C. Economic entity, conservatism D. Conservatism, materiality 1-9 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 20. Which of the following exemplifies "materiality" as the term is used in the FASB conceptual framework? A. BCC Corporation purchased a $30 wastebasket with an expected useful life of 10 years. BCC charged the entire cost to expense in the period incurred. B. Reported account balances in DPT Corporation's financial statements are rounded to the nearest whole dollar. C. Both BCC Corporation purchased a $30 wastebasket with an expected useful life of 10 years. BCC charged the entire cost to expense in the period incurred and reported account balances in DPT Corporation's financial statements are rounded to the nearest whole dollar. D. Neither BCC Corporation purchased a $30 wastebasket with an expected useful life of 10 years. BCC charged the entire cost to expense in the period incurred nor reported account balances in DPT Corporation's financial statements are rounded to the ne arest whole dollar. 21. Which of the following statements about AIS is most true? A. Compared to introductory accounting, AIS is more likely to have problems with nondeterministic answers. B. Compared to introductory accounting, AIS is less likely to have problems with nondeterministic answers. C. Introductory accounting and AIS are equally likely to have problems with nondeterministic answers. D. All problems in AIS have nondeterministic answers. 1-10 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 22. Which of the following statements about AIS is most true? A. The topics studied in an AIS course are unrelated to those in other accounting courses. B. AIS is the only area of accounting that involves questions with nondeterministic answers. C. The five gene ric elements of an AIS can be discussed in other areas of accounting. D. All of these statements are true. 23. AIS study sometimes involves questions with deterministic answers. Which of the following questions is most likely to have a deterministic answer? A. How should a company record the purchase of supplies on account in its AIS? B. In a corporation with sales of $100,000 annually, what dollar amount should be considered material? C. Which processing tools should the AIS use? D. Has the conceptual framework achieved the FASB's original objective for developing it? 24. Joe has completed all his accounting coursework and is ready to graduate. In his education, he has learned how to: analyze source documents, use Excel, make journal entries and prepare tax returns. Which generic element of the AIS is missing from that list? A. Inputs B. Outputs C. Storage D. Processes 1-11 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 25. Which of the following statements best demonstrates a similarity between AIS and other areas of study in accounting? A. AIS is primarily concerned with numbers. B. Communication skills are important in AIS. C. Both AIS is primarily concerned with numbers and communication skills are important in AIS. D. Neither AIS is primarily concerned with numbers nor communication skills are important in AIS. 26. Which of the following statements best demonstrates a difference between AIS and other areas of study in accounting? A. General ledger software can only be used in AIS. B. The matching principle is less important in AIS than in other areas of accounting. C. AIS often looks at the "big picture" of accounting. D. Topics studied in AIS courses are not typically included on accounting professional exams. 27. AIS can be linked to other areas of study in accounting by focusing on the five generic elements of the AIS. Which of the following is a process that might be studied in management or cost accounting? A. Components of the master budget B. How to pr epare the master budget C. Both components of the master budget and how to prepare the master budget D. Neither components of the master budget nor how to prepare the master budget 1-12 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 28. AIS can be linked to other areas of study in accounting by focusing on the five generic elements of the AIS. Which of the following pairs a generic element of the AIS with a specific example from financial accounting? A. Bank reconciliation, internal control B. Adjusting entries, output C. Financial statements, storage D. FASB Conceptual Framework, input 29. In an auditing course, students develop their decision making skills, learn how to conduct a financial statement audit and learn the various types of audit reports. Which of the following therefore links AIS with auditing? A. Communication skills B. Professional judgment C. Both communication skills and professional judgment D. Neither communication skills nor professional judgment 30. In management accounting, students learn to prepare budgets, calculate cost variances and interpret those variances. Which of the following best links those topics with AIS study? A. Use of professional judgment B. Journal entry preparation C. Both use of professional judgment and journal entry preparation D. Neither use of professional judgment nor journal entry preparation 1-13 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 31. The generic structure of most accounting information systems comprises ___ elements. A. Three B. Four C. Five D. More than five 32. Which generic element of the AIS is focused on master files, transaction files and junction files? A. Inputs B. Processes C. Outputs D. Storage 33. Which of the following is an example of an AIS output? A. Journal entries B. Statement of cash flows C. Sales transaction file D. General ledger software 1-14 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 34. 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? A. Inputs B. Processes C. Outputs D. Technology 35. Sienna used a stack of sales invoices to record journal entries in the AIS. She used those entries and others to prepare an income statement that was later reviewed by her supervisor. All the generic elements of the AIS are represented in Sienna's actions except : A. Internal controls B. Outputs C. Storage D. Inputs 36. Sienna used a stack of sales invoices to record journal entries in the AIS. She used those entries and others to prepare an income statement that was later reviewed by her supervisor. The supervisor's review could best be described as which generic element of the AIS? A. Input B. Output C. Process D. Internal control 1-15 Copyright © 2016 McGraw -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw -Hill Education. 37. The generic elements of an AIS include inputs and outputs. Which of the following statements about them is most true? A. Inputs should be paper -based; outputs should be electronic. B. Outputs should be paper -based; inputs should be electronic. C. If inputs are paper -based, outputs should also be paper -based. D. If inputs are electronic, outputs could be either paper -based or electronic. 38. The generic elements of an AIS include processes and storage. Which of the following statements about them is most true? A. Both require internal controls, but the specific controls may be different. B. Both require identical internal controls. C. Storage is not subject to internal controls, but processes are. D. Processes are not subject to internal controls, but storage is. 39. Storage is one generic element of the AIS; the text explains that data stored electronically often are grouped into three types of files. Which of the following includes three examples of the same file type? A. Purchases, cash receipts, sales B. Inventory, cash receipts, sales C. Purchases, cash, sales D. Inventory, cash, sales