Test Bank for Accounting Information Systems
15th Edition
By Marshall B. Romney, Paul J. Steinbart
| Verified Chapter's 1 - 24 | Complete
1
,Table of Contents
1. Accounting Information Systems: An Overview
2. Overview of Transaction Processing and Enterprise -Resource Planning Systems
3. Systems Documentation Techniques
4. Relational Databases
5. Introduction to Data Analytics in Accounting
6. Transforming Data
7. Data Analysis and Presentation
8. Fraud and Errors
9. Computer Fraud and Abuse Techniques
10. Control and Accounting Information Systems
11. Controls for Information Security
12. Confidentiality and Privacy Controls
13. Processing Integrity and Availability Controls
14. The Revenue Cycle: Sales to Cash Collections
15. The Expenditure Cycle: Purchasing to Cash Disbursements
16. The Production Cycle
17. The Human Resources Management and Payroll Cycle
18. General Ledger and Reporting System
19. Database Design Using the REA Data Model
20. Implementing an REA Model in a Relational Database
21. Special Topics in REA Modeling
22. Introduction to Systems Development and Systems Analysis
23. AIS Development Strategies
24. Systems Design, Implementation, and Operation
2
, Chapter 1 Accounting Information Systems: An Overview
1.1 Distinguish data from information, discuss the characteristics of useful information, and
explain how to determine the value of information.
1) Which of the following statements below shows the contrast between data and
information?
A) Data is the output of an AIS.
B) Information is the primary output of an AIS.
C) Data is more useful in decision making than information.
D) Data and information are the same.
Answer: B
2) Information is best described as
A) raw facts about transactions.
B) data that has been organized and processed so that it is meaningful to the user.
C) facts that are useful when processed in a timely manner.
D) the same thing as data.
Answer: B
3) The value of information can best be determined by
A) its usefulness to decision makers.
B) its relevance to decision makers.
C) the benefits associated with obtaining the information minus the cost of producing it.
D) the extent to which it optimizes the value chain.
Answer: C
4) An accounting information system (AIS) processes to provide users with
.
A) data; information
B) data; transactions
C) information; data
D) data; benefits
Answer: A
5) information reduces uncertainty, improves decision makers' ability to make
predictions, or confirms expectations.
3
,A) Timely
4
,B) Reliable
C) Relevant
D) Complete
Answer: C
6) Information that is free from error or bias and accurately represents the events or activities
of the organization is
A) relevant.
B) reliable / Faithful Representation.
C) verifiable.
D) timely.
Answer: B
7) Information that does not omit important aspects of the underlying events or activities
that it measures is
A) complete.
B) accessible.
C) relevant.
D) timely.
Answer: A
8) Information is when two knowledgeable people independently produce the
same information.
A) verifiable
B) relevant
C) reliable
D) complete
Answer: A
9) Data must be converted into information to be considered useful and meaningful for
decision making. There are six characteristics that make information both useful and
meaningful. If information is free from error or bias and accurately represents the events or
activities of the organization, it is representative of the characteristic of
A) relevancy.
B) timeliness.
C) understandability.
D) reliability.
5
,Answer: D
10) Inventory information is provided in real time by a firm's accounting information system.
The accuracy of this information is questionable, however, since the production manager
often reports stock outs of components that the system indicates are in stock. Which of the
following characteristics of useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: B
11) Cheryl Metrejean has been the controller of Downtown Tires for 25 years. Ownership of
the firm recently changed hands and the new owners are conducting an audit of the financial
records. The audit has been unable to reproduce financial reports that were prepared by Ms.
Metrejean. While there is no evidence of wrongdoing, the auditors are concerned that the
discrepancies might contribute to poor decisions. Which of the following characteristics of
useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: F
12) In 2003, Singh Manufacturing implemented a Web-based information system that allows
all employees to access mission-critical information. The intention was to increase production
efficiency. Unfortunately, it had the opposite effect, as deliveries fell behind schedule and
costs increased. Shaman Gupta, the director of information technology services, asked Ashlee
Wells to come in and talk with him about the system. Ashlee is a long-time employee of
Singh, and her opinion is valued by her peers and by her supervisor.
"So Ashlee, how's it going down there in the shop?"
"Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan
production. Now, we got that computer system. Most of us can't figure out how to use it to do
our jobs. Is there some way to print out a pick list?"
6
,Shaman thought for a while before responding. "Well, Ashlee, to tell you the truth, I'm not so
sure how to do it myself, but there must be a way. We'll bring in the consultants that helped
us build the system. Maybe they can help."
Which of the following characteristics of useful information is absent in the situation
described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: E
13) Wisconsin Dells, Wisconsin, is a popular tourist destination. During the winter months,
the population dwindles to a meager few, but when summer comes, the size of the town
surges. Hunter Jackson is the town sanitation engineer. When the size of the town surges, so
do his responsibilities. Among them is management of the sewage processing volume.
In an interview with the local paper, Hunter complained that a report on tourist population
that he uses to adjust processing volume refers to data that was collected four days ago and it
takes him a week to make adjustments. Which of the following characteristics of useful
information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: D
14) A frantic Barney Rubble lost a large sale because he could not access the system to verify
the inventory was in stock and ready to be shipped. Which of the following characteristics of
useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
7
,G) accessible
Answer: G
15) Message left on voicemail: "Hi Nikki! Just landed at the airport. How about dinner this
evening if you're available. Call me!" Which of the following characteristics of useful
information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: C
16) Chopra, Limited, is an Indian company operating in New York state. It offers stylized,
boutique public relations services to upscale retailers in quaint New England towns. A major
source of revenue is a weekly newsletter that reports on current and projected tourist travel
and spending patterns. Preparation of the newsletter requires study and analysis of weather
conditions, economic activity, and travel costs. It is available at an annual subscription rate of
$299.99. There are currently 190 subscribers. Preparation and distribution of the newsletter
costs $12,000 annually. The value of information to subscribers is
A) $236.83.
B) $44,998.10.
C) less than $63.16.
D) at least $300.00.
Answer: D
17) Baggins Incorporated identifies new product development and product improvement as
the top corporate goals. An employee developed an innovation that will correct a
shortcoming in one of the company's products. Although Baggins current Return on
Investment (ROI) is 15%, the product innovation is expected to generate ROI of only 12%. As a
result, the employee fails to follow up. As a result, awarding bonuses to employees based on
ROI resulted in
A) goal conflict.
B) information overload.
C) goal congruence.
D) decreased value of information.
5
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Answer: A
18) Which of the following tradeoffs between characteristics of useful information is least
objectionable?
A) incomplete information received on a timely basis
B) irrelevant information received in an understandable format
C) unreliable information easily accessible
D) verifiable information received in unreadable format
Answer: A
19) Which of the following is not one of the three basic types of data about a specific sales
transaction that should be captured by an Accounting Information System?
A) name of the employee who completed the sale
B) daily sales quota
C) product sold
D) date
Answer: B
1.2 Explain the decisions an organization makes and the information needed to make them.
1) Paid time-off policies, job descriptions, and procedures manuals are examples of
information needed to support key decisions in what business process?
A) hire and train employees
B) acquire inventory
C) sell merchandise
D) collect payment from customers
Answer: A
2) Before a firm can identify the information needed to effectively manage a process, the firm
must
A) understand the process .
B) hire programmers.
C) purchase computers and/or workstations.
D) obtain internet access.
Answer: A
3) Identify the piece of information below that is typically needed to acquire a building.
A) job descriptions
6
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B) vendor performance
C) market coverage
D) capacity needs
Answer: D
4) Identify the piece of information below that is typically needed to acquire inventory.
A) job descriptions
B) vendor performance
C) market coverage
D) capacity needs
Answer: B
5) Identify the piece of information below that is typically needed to hire and train
employees.
A) job descriptions
B) vendor performance
C) market coverage
D) capacity needs
Answer: A
6) How can query languages be used to help make better decisions?
A) They can suggest a course of action.
B) They can gather relevant data for decision making.
C) They can help the decision maker to interpret results.
D) They can model choose among alternative courses of action.
Answer: B
7) What is a key decision that needs to be made with regards to selling merchandise?
A) which credit cards to accept
B) which employees to hire
C) which public accounting firm to employ
D) how much capital to acquire
Answer: A
8) What is a key decision that needs to be made with regards to acquiring inventory?
A) which credit cards to accept
B) which employees to hire
7
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15th Edition
By Marshall B. Romney, Paul J. Steinbart
| Verified Chapter's 1 - 24 | Complete
1
,Table of Contents
1. Accounting Information Systems: An Overview
2. Overview of Transaction Processing and Enterprise -Resource Planning Systems
3. Systems Documentation Techniques
4. Relational Databases
5. Introduction to Data Analytics in Accounting
6. Transforming Data
7. Data Analysis and Presentation
8. Fraud and Errors
9. Computer Fraud and Abuse Techniques
10. Control and Accounting Information Systems
11. Controls for Information Security
12. Confidentiality and Privacy Controls
13. Processing Integrity and Availability Controls
14. The Revenue Cycle: Sales to Cash Collections
15. The Expenditure Cycle: Purchasing to Cash Disbursements
16. The Production Cycle
17. The Human Resources Management and Payroll Cycle
18. General Ledger and Reporting System
19. Database Design Using the REA Data Model
20. Implementing an REA Model in a Relational Database
21. Special Topics in REA Modeling
22. Introduction to Systems Development and Systems Analysis
23. AIS Development Strategies
24. Systems Design, Implementation, and Operation
2
, Chapter 1 Accounting Information Systems: An Overview
1.1 Distinguish data from information, discuss the characteristics of useful information, and
explain how to determine the value of information.
1) Which of the following statements below shows the contrast between data and
information?
A) Data is the output of an AIS.
B) Information is the primary output of an AIS.
C) Data is more useful in decision making than information.
D) Data and information are the same.
Answer: B
2) Information is best described as
A) raw facts about transactions.
B) data that has been organized and processed so that it is meaningful to the user.
C) facts that are useful when processed in a timely manner.
D) the same thing as data.
Answer: B
3) The value of information can best be determined by
A) its usefulness to decision makers.
B) its relevance to decision makers.
C) the benefits associated with obtaining the information minus the cost of producing it.
D) the extent to which it optimizes the value chain.
Answer: C
4) An accounting information system (AIS) processes to provide users with
.
A) data; information
B) data; transactions
C) information; data
D) data; benefits
Answer: A
5) information reduces uncertainty, improves decision makers' ability to make
predictions, or confirms expectations.
3
,A) Timely
4
,B) Reliable
C) Relevant
D) Complete
Answer: C
6) Information that is free from error or bias and accurately represents the events or activities
of the organization is
A) relevant.
B) reliable / Faithful Representation.
C) verifiable.
D) timely.
Answer: B
7) Information that does not omit important aspects of the underlying events or activities
that it measures is
A) complete.
B) accessible.
C) relevant.
D) timely.
Answer: A
8) Information is when two knowledgeable people independently produce the
same information.
A) verifiable
B) relevant
C) reliable
D) complete
Answer: A
9) Data must be converted into information to be considered useful and meaningful for
decision making. There are six characteristics that make information both useful and
meaningful. If information is free from error or bias and accurately represents the events or
activities of the organization, it is representative of the characteristic of
A) relevancy.
B) timeliness.
C) understandability.
D) reliability.
5
,Answer: D
10) Inventory information is provided in real time by a firm's accounting information system.
The accuracy of this information is questionable, however, since the production manager
often reports stock outs of components that the system indicates are in stock. Which of the
following characteristics of useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: B
11) Cheryl Metrejean has been the controller of Downtown Tires for 25 years. Ownership of
the firm recently changed hands and the new owners are conducting an audit of the financial
records. The audit has been unable to reproduce financial reports that were prepared by Ms.
Metrejean. While there is no evidence of wrongdoing, the auditors are concerned that the
discrepancies might contribute to poor decisions. Which of the following characteristics of
useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: F
12) In 2003, Singh Manufacturing implemented a Web-based information system that allows
all employees to access mission-critical information. The intention was to increase production
efficiency. Unfortunately, it had the opposite effect, as deliveries fell behind schedule and
costs increased. Shaman Gupta, the director of information technology services, asked Ashlee
Wells to come in and talk with him about the system. Ashlee is a long-time employee of
Singh, and her opinion is valued by her peers and by her supervisor.
"So Ashlee, how's it going down there in the shop?"
"Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan
production. Now, we got that computer system. Most of us can't figure out how to use it to do
our jobs. Is there some way to print out a pick list?"
6
,Shaman thought for a while before responding. "Well, Ashlee, to tell you the truth, I'm not so
sure how to do it myself, but there must be a way. We'll bring in the consultants that helped
us build the system. Maybe they can help."
Which of the following characteristics of useful information is absent in the situation
described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: E
13) Wisconsin Dells, Wisconsin, is a popular tourist destination. During the winter months,
the population dwindles to a meager few, but when summer comes, the size of the town
surges. Hunter Jackson is the town sanitation engineer. When the size of the town surges, so
do his responsibilities. Among them is management of the sewage processing volume.
In an interview with the local paper, Hunter complained that a report on tourist population
that he uses to adjust processing volume refers to data that was collected four days ago and it
takes him a week to make adjustments. Which of the following characteristics of useful
information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: D
14) A frantic Barney Rubble lost a large sale because he could not access the system to verify
the inventory was in stock and ready to be shipped. Which of the following characteristics of
useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
7
,G) accessible
Answer: G
15) Message left on voicemail: "Hi Nikki! Just landed at the airport. How about dinner this
evening if you're available. Call me!" Which of the following characteristics of useful
information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: C
16) Chopra, Limited, is an Indian company operating in New York state. It offers stylized,
boutique public relations services to upscale retailers in quaint New England towns. A major
source of revenue is a weekly newsletter that reports on current and projected tourist travel
and spending patterns. Preparation of the newsletter requires study and analysis of weather
conditions, economic activity, and travel costs. It is available at an annual subscription rate of
$299.99. There are currently 190 subscribers. Preparation and distribution of the newsletter
costs $12,000 annually. The value of information to subscribers is
A) $236.83.
B) $44,998.10.
C) less than $63.16.
D) at least $300.00.
Answer: D
17) Baggins Incorporated identifies new product development and product improvement as
the top corporate goals. An employee developed an innovation that will correct a
shortcoming in one of the company's products. Although Baggins current Return on
Investment (ROI) is 15%, the product innovation is expected to generate ROI of only 12%. As a
result, the employee fails to follow up. As a result, awarding bonuses to employees based on
ROI resulted in
A) goal conflict.
B) information overload.
C) goal congruence.
D) decreased value of information.
5
Downloaded by: GradeA |
Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
Answer: A
18) Which of the following tradeoffs between characteristics of useful information is least
objectionable?
A) incomplete information received on a timely basis
B) irrelevant information received in an understandable format
C) unreliable information easily accessible
D) verifiable information received in unreadable format
Answer: A
19) Which of the following is not one of the three basic types of data about a specific sales
transaction that should be captured by an Accounting Information System?
A) name of the employee who completed the sale
B) daily sales quota
C) product sold
D) date
Answer: B
1.2 Explain the decisions an organization makes and the information needed to make them.
1) Paid time-off policies, job descriptions, and procedures manuals are examples of
information needed to support key decisions in what business process?
A) hire and train employees
B) acquire inventory
C) sell merchandise
D) collect payment from customers
Answer: A
2) Before a firm can identify the information needed to effectively manage a process, the firm
must
A) understand the process .
B) hire programmers.
C) purchase computers and/or workstations.
D) obtain internet access.
Answer: A
3) Identify the piece of information below that is typically needed to acquire a building.
A) job descriptions
6
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Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
B) vendor performance
C) market coverage
D) capacity needs
Answer: D
4) Identify the piece of information below that is typically needed to acquire inventory.
A) job descriptions
B) vendor performance
C) market coverage
D) capacity needs
Answer: B
5) Identify the piece of information below that is typically needed to hire and train
employees.
A) job descriptions
B) vendor performance
C) market coverage
D) capacity needs
Answer: A
6) How can query languages be used to help make better decisions?
A) They can suggest a course of action.
B) They can gather relevant data for decision making.
C) They can help the decision maker to interpret results.
D) They can model choose among alternative courses of action.
Answer: B
7) What is a key decision that needs to be made with regards to selling merchandise?
A) which credit cards to accept
B) which employees to hire
C) which public accounting firm to employ
D) how much capital to acquire
Answer: A
8) What is a key decision that needs to be made with regards to acquiring inventory?
A) which credit cards to accept
B) which employees to hire
7
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