ACCOUNTING INFORMATION SYSTEMS 2026
QUESTION COLLECTION AUDIT TRAILS AND
CONTROL PROCEDURES MODULE SOLVED
ITEMS AND RESPONSE KEY
◉ FRS provides information to external users; the MRS provides
information to internal users. Answer: The major difference
between the financial reporting system (FRS) and the management
reporting system (MRS) is the
◉ whether the transactions are financial or nonfinancial that
directly affect the processing of financial transactions Answer: The
author distinguishes between the accounting information system
and the management information system based on
◉ the purchase of computer Answer: An example of a financial
transactions is
◉ log of customer calls Answer: An example of a nonfinancial
transaction is
◉ the conversion cycle Answer: The transaction processing system
includes which of the following
,◉ the production of useful information Answer: The goal of data
processing is
◉ tax authorities Answer: Which of the following is an external end
user?
◉ internal auditing Answer: An appraisal function housed within the
organization that performs a wide range of services for management
is
◉ constituents Answer: What factor conceptually distinguishes
external auditing and internal auditing?
◉ cash disbursements Answer: What system is part of the
expenditure cycle?
◉ physical and financial Answer: Both the revenue and the
expenditure cycle can be viewed as having two parts. These key
parts are
◉ represent relationships between key elements of both manual and
computer systems Answer: System flowcharts do which one of the
following?
,◉ oval Answer: Which symbol is used to represent a data source or
destination of documents and reports in a system flowchart?
◉ Sales Order Processing Answer: Which accounting application is
least suited to batch processing?
◉ there is a lag between the time when the economic event occurs,
and the financial records are updated. Answer: In contrast to a real-
time system, in a batch processing system
◉ processing takes place when the economic event occurs. Answer:
In contrast to a batch processing system, in a real-time system
◉ block code Answer: The coding scheme most appropriate for a
chart of accounts is
◉ a mnemonic code Answer: When a firm wants its coding system to
convey meaning without reference to any other document, it would
choose
◉ missing or unrecorded documents can be identified. Answer: The
most important advantage of sequential coding is that
, ◉ Management Reporting System (MRS) Answer: Li has
implemented a new accounting information system (AIS) to help
him manage his construction company. Li uses the information
captured by the system to plan each project, forecasting the
requirements for raw materials and the cash flow expected. Which
AIS subsystem helps Li in planning?
◉ Variance reports Answer: Which information does the
management reporting system (MRS) provide?
◉ The decision maker wastes resources analyzing outdated
information. Answer: Useful information has the following
characteristics: relevance, timeliness, accuracy, completeness, and
summarization. What happens if the information is old?
◉ The decision maker receives materially wrong information.
Answer: Useful information has the following characteristics:
relevance, timeliness, accuracy, completeness, and summarization.
What happens if the information is inaccurate?
◉ The organization needs to review its credit-granting policies.
Answer: Which important information does external feedback about
the level of uncollected customer accounts indicate to the
management information system?
QUESTION COLLECTION AUDIT TRAILS AND
CONTROL PROCEDURES MODULE SOLVED
ITEMS AND RESPONSE KEY
◉ FRS provides information to external users; the MRS provides
information to internal users. Answer: The major difference
between the financial reporting system (FRS) and the management
reporting system (MRS) is the
◉ whether the transactions are financial or nonfinancial that
directly affect the processing of financial transactions Answer: The
author distinguishes between the accounting information system
and the management information system based on
◉ the purchase of computer Answer: An example of a financial
transactions is
◉ log of customer calls Answer: An example of a nonfinancial
transaction is
◉ the conversion cycle Answer: The transaction processing system
includes which of the following
,◉ the production of useful information Answer: The goal of data
processing is
◉ tax authorities Answer: Which of the following is an external end
user?
◉ internal auditing Answer: An appraisal function housed within the
organization that performs a wide range of services for management
is
◉ constituents Answer: What factor conceptually distinguishes
external auditing and internal auditing?
◉ cash disbursements Answer: What system is part of the
expenditure cycle?
◉ physical and financial Answer: Both the revenue and the
expenditure cycle can be viewed as having two parts. These key
parts are
◉ represent relationships between key elements of both manual and
computer systems Answer: System flowcharts do which one of the
following?
,◉ oval Answer: Which symbol is used to represent a data source or
destination of documents and reports in a system flowchart?
◉ Sales Order Processing Answer: Which accounting application is
least suited to batch processing?
◉ there is a lag between the time when the economic event occurs,
and the financial records are updated. Answer: In contrast to a real-
time system, in a batch processing system
◉ processing takes place when the economic event occurs. Answer:
In contrast to a batch processing system, in a real-time system
◉ block code Answer: The coding scheme most appropriate for a
chart of accounts is
◉ a mnemonic code Answer: When a firm wants its coding system to
convey meaning without reference to any other document, it would
choose
◉ missing or unrecorded documents can be identified. Answer: The
most important advantage of sequential coding is that
, ◉ Management Reporting System (MRS) Answer: Li has
implemented a new accounting information system (AIS) to help
him manage his construction company. Li uses the information
captured by the system to plan each project, forecasting the
requirements for raw materials and the cash flow expected. Which
AIS subsystem helps Li in planning?
◉ Variance reports Answer: Which information does the
management reporting system (MRS) provide?
◉ The decision maker wastes resources analyzing outdated
information. Answer: Useful information has the following
characteristics: relevance, timeliness, accuracy, completeness, and
summarization. What happens if the information is old?
◉ The decision maker receives materially wrong information.
Answer: Useful information has the following characteristics:
relevance, timeliness, accuracy, completeness, and summarization.
What happens if the information is inaccurate?
◉ The organization needs to review its credit-granting policies.
Answer: Which important information does external feedback about
the level of uncollected customer accounts indicate to the
management information system?
