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D217 Practice Test Questions with Correct
Answers | Updated (100% Correct Answers)
What are the advantages of using data coding in accounting
information systems? Answer: Concisely representing large amounts
of complex information that would otherwise be unmanageable
How is the digital audit trail like the paper audit trail? Answer: The
digital audit trail allows transaction tracing.
What does an external auditor's responsibility involve? Answer:
Determining validity, accuracy, and completeness
Which type of digital computer file stores payroll programs and
other data that are used as standards for processing? Answer:
Reference file
With which cycle does the fixed asset system share some
characteristics? Answer: Expenditure cycle
Which company cycle transforms or converts input resources; such
as raw materials, labor, and overhead; into finished products or
services for sale? Answer: Conversion cycle
Data coding involves creating simple numeric or alphabetic codes to
represent complex economic phenomena that facilitate efficient data
processing. Which problem does data coding solve? Answer: An
© 2025 All rights reserved
, 2
entry takes a great deal of recording space, is time-consuming to
record, and is prone to many types of errors.
Which information flow supports preparing the financial statements
of an organization? Answer: Internal vertical
What is the relationship between the transaction processing system
(TPS) and the general ledger system (GLS)? Answer: Data from the
TPS are input for the GLS.
Which accounting information system (AIS) component provides
information to external users? Answer: Financial reporting system
(FRS)
Useful information has the following characteristics: relevance,
timeliness, accuracy, completeness, and summarization. What
happens if the information is irrelevant? Answer: The decision
maker wastes time analyzing the information.
A grocery store updates its inventory levels in the accounting
information system in real time. However, the store frequently
reports petty theft and has trouble locating inventory on the shop
floor. Which characteristic of useful information is missing from this
scenario? Answer: Reliable
Which component of an information system is used to produce an
operational budget? Answer: Management reporting system (MRS)
© 2025 All rights reserved
D217 Practice Test Questions with Correct
Answers | Updated (100% Correct Answers)
What are the advantages of using data coding in accounting
information systems? Answer: Concisely representing large amounts
of complex information that would otherwise be unmanageable
How is the digital audit trail like the paper audit trail? Answer: The
digital audit trail allows transaction tracing.
What does an external auditor's responsibility involve? Answer:
Determining validity, accuracy, and completeness
Which type of digital computer file stores payroll programs and
other data that are used as standards for processing? Answer:
Reference file
With which cycle does the fixed asset system share some
characteristics? Answer: Expenditure cycle
Which company cycle transforms or converts input resources; such
as raw materials, labor, and overhead; into finished products or
services for sale? Answer: Conversion cycle
Data coding involves creating simple numeric or alphabetic codes to
represent complex economic phenomena that facilitate efficient data
processing. Which problem does data coding solve? Answer: An
© 2025 All rights reserved
, 2
entry takes a great deal of recording space, is time-consuming to
record, and is prone to many types of errors.
Which information flow supports preparing the financial statements
of an organization? Answer: Internal vertical
What is the relationship between the transaction processing system
(TPS) and the general ledger system (GLS)? Answer: Data from the
TPS are input for the GLS.
Which accounting information system (AIS) component provides
information to external users? Answer: Financial reporting system
(FRS)
Useful information has the following characteristics: relevance,
timeliness, accuracy, completeness, and summarization. What
happens if the information is irrelevant? Answer: The decision
maker wastes time analyzing the information.
A grocery store updates its inventory levels in the accounting
information system in real time. However, the store frequently
reports petty theft and has trouble locating inventory on the shop
floor. Which characteristic of useful information is missing from this
scenario? Answer: Reliable
Which component of an information system is used to produce an
operational budget? Answer: Management reporting system (MRS)
© 2025 All rights reserved
