ACCOUNTING INFORMATION SYSTEMS 2026
AIS FUNDAMENTALS AND INTERNAL
CONTROLS TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ Which problem is characteristically associated with the flat-file
approach to data management? Answer: the inability to determine
what data is available
◉ A description of the physical arrangement of records in the
database is Answer: the internal view.
◉ Which of the following may provide many distinct views of the
database? Answer: the user view
◉ The update anomaly in unnormalized tables Answer: occurs
because of data redundancy.
◉ The deletion anomaly in unnormalized tables Answer: may result
in the loss of important data.
◉ Which document triggers the revenue cycle? Answer: the
customer purchase order
,◉ Which department is least likely to be involved in the revenue
cycle? Answer: The accounts payable department is least likely to be
involved in the revenue cycle. Accounts payable is charged with
managing the segment of the expenditure cycle that involves
payments to vendors and creditors.
◉ The purpose of the sales invoice is to Answer: The purpose of the
sales invoice is to bill the customer. The sales invoice will be sent to
the customer for payment. At the same time the invoice will also
update inventory, send a journal to the general ledger, and record
the sales journal.
◉ Which type of control is considered a compensating control for
customer payments? Answer: Supervision is a compensating control
for customer payments. Compensating controls are put in place
when more effective controls are deemed too difficult or costly to
implement. Supervision is the simplest and most common form of
compensating control.
◉ Commercial accounting systems have fully integrated modules.
The word "integrated" means that Answer: The word "integrated"
means that the transfer of information among modules occurs
automatically. In a fully integrated system, the shipping advice will
generate the request for invoice automatically. This eliminates the
risk that the invoice request is not processed or is processed for a
different amount.
,◉ A copy of the purchase order (PO) is sent to the Answer: A copy of
the purchase order (PO) is sent to the vendor. The purchase order is
the formal document that tells the vendor what material is needed,
at what price, in what quantity and on what date.
◉ The departments involved in the purchasing process are
purchasing, receiving, inventory control and Answer: The
departments involved in the purchasing process are purchasing,
receiving, inventory control and accounts payable. Accounts payable
completes the purchasing process by authorizing and executing the
cash disbursement based on a signal from receiving or inventory
control.
◉ When a cash disbursement in payment of an accounts payable is
recorded Answer: When a cash disbursement in payment of an
accounts payable is recorded the liability account is decreased. On
the Balance Sheet, accounts payable is a current liability. When a
cash disbursement is recorded, the liability will be reduced.
◉ The greatest risk of misappropriation of funds occurs in Answer:
The greatest risk of misappropriation of funds occurs in accounts
payable. This may take the form of payments for goods not ordered
or received and to vendors that do not exist. The risk can be reduced
through supervision, segregation of duties, independent verification,
or automated processes.
, ◉ In a firm with proper segregation of duties, adequate supervision
as a compensating control is still necessary in Answer: In a firm with
proper segregation of duties, adequate supervision is most critical in
receiving. Every day materials arrive on the receiving dock. Until
those receipts are recorded in the system, they are invisible to
anyone but the receivers and their supervisors. Supervision is a
compensating control appropriate before more automated controls
take effect. Scanning technology and automated three-way match
are technological controls that reduce risk.
◉ The fixed asset system records the Answer: The fixed asset system
records the purchase of a new plant. The fixed asset system records
property, plant, and equipment used in the operation of the
business. These represent the largest investments of the firm.
◉ In a technology enabled payroll system, Personnel, Time Keeping,
Payroll, and Accounts Payable connect to which department to pay
employees? Answer: In a technology-enabled payroll system,
Personnel, Time Keeping, Payroll and Accounts Payable connect to
cash disbursements to pay employees. Personnel inputs the basic
employee information and rate of pay; Time Keeping collects hours
worked and verifies time cards; Payroll inputs the hours worked into
the payroll system which calculates gross and net pay, taxes, and
other deductions; Accounts Payable approves the payment amount;
and finally cash disbursements issues pay checks or direct deposit.
The general ledger will be updated after the cash disbursement
occurs.
AIS FUNDAMENTALS AND INTERNAL
CONTROLS TEST PAPER QUESTIONS AND
SOLUTIONS GRADED A+
◉ Which problem is characteristically associated with the flat-file
approach to data management? Answer: the inability to determine
what data is available
◉ A description of the physical arrangement of records in the
database is Answer: the internal view.
◉ Which of the following may provide many distinct views of the
database? Answer: the user view
◉ The update anomaly in unnormalized tables Answer: occurs
because of data redundancy.
◉ The deletion anomaly in unnormalized tables Answer: may result
in the loss of important data.
◉ Which document triggers the revenue cycle? Answer: the
customer purchase order
,◉ Which department is least likely to be involved in the revenue
cycle? Answer: The accounts payable department is least likely to be
involved in the revenue cycle. Accounts payable is charged with
managing the segment of the expenditure cycle that involves
payments to vendors and creditors.
◉ The purpose of the sales invoice is to Answer: The purpose of the
sales invoice is to bill the customer. The sales invoice will be sent to
the customer for payment. At the same time the invoice will also
update inventory, send a journal to the general ledger, and record
the sales journal.
◉ Which type of control is considered a compensating control for
customer payments? Answer: Supervision is a compensating control
for customer payments. Compensating controls are put in place
when more effective controls are deemed too difficult or costly to
implement. Supervision is the simplest and most common form of
compensating control.
◉ Commercial accounting systems have fully integrated modules.
The word "integrated" means that Answer: The word "integrated"
means that the transfer of information among modules occurs
automatically. In a fully integrated system, the shipping advice will
generate the request for invoice automatically. This eliminates the
risk that the invoice request is not processed or is processed for a
different amount.
,◉ A copy of the purchase order (PO) is sent to the Answer: A copy of
the purchase order (PO) is sent to the vendor. The purchase order is
the formal document that tells the vendor what material is needed,
at what price, in what quantity and on what date.
◉ The departments involved in the purchasing process are
purchasing, receiving, inventory control and Answer: The
departments involved in the purchasing process are purchasing,
receiving, inventory control and accounts payable. Accounts payable
completes the purchasing process by authorizing and executing the
cash disbursement based on a signal from receiving or inventory
control.
◉ When a cash disbursement in payment of an accounts payable is
recorded Answer: When a cash disbursement in payment of an
accounts payable is recorded the liability account is decreased. On
the Balance Sheet, accounts payable is a current liability. When a
cash disbursement is recorded, the liability will be reduced.
◉ The greatest risk of misappropriation of funds occurs in Answer:
The greatest risk of misappropriation of funds occurs in accounts
payable. This may take the form of payments for goods not ordered
or received and to vendors that do not exist. The risk can be reduced
through supervision, segregation of duties, independent verification,
or automated processes.
, ◉ In a firm with proper segregation of duties, adequate supervision
as a compensating control is still necessary in Answer: In a firm with
proper segregation of duties, adequate supervision is most critical in
receiving. Every day materials arrive on the receiving dock. Until
those receipts are recorded in the system, they are invisible to
anyone but the receivers and their supervisors. Supervision is a
compensating control appropriate before more automated controls
take effect. Scanning technology and automated three-way match
are technological controls that reduce risk.
◉ The fixed asset system records the Answer: The fixed asset system
records the purchase of a new plant. The fixed asset system records
property, plant, and equipment used in the operation of the
business. These represent the largest investments of the firm.
◉ In a technology enabled payroll system, Personnel, Time Keeping,
Payroll, and Accounts Payable connect to which department to pay
employees? Answer: In a technology-enabled payroll system,
Personnel, Time Keeping, Payroll and Accounts Payable connect to
cash disbursements to pay employees. Personnel inputs the basic
employee information and rate of pay; Time Keeping collects hours
worked and verifies time cards; Payroll inputs the hours worked into
the payroll system which calculates gross and net pay, taxes, and
other deductions; Accounts Payable approves the payment amount;
and finally cash disbursements issues pay checks or direct deposit.
The general ledger will be updated after the cash disbursement
occurs.
