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Test Bank For
Accounting Information Systems 10e James A. Hall
Chapter 1 All Chapters Included
1. Information is a business resource.
PR
*a. True
b. False All Answers Included
2. IT outsourcing is location-independent computing.
a. True
*b. False
ES
3. Transaction processing systems convert non-financial transactions
into financial transactions.
a. True
*b. False
SI
4. Information lacking reliability may still have value.
a. True
*b. False
VE
5. A balance sheet prepared in conformity with GAAP is an example of
discretionary reporting.
a. True
*b. False
G
6. The management reporting system provides the internal financial
information needed to manage a business.
R
*a. True
b. False
AD
7. Most of the inputs to the general ledger system come from the
financial reporting system.
a. True
*b. False
ES
8. When preparing discretionary reports, organizations can choose what
information to report and how to present it.
*a. True
b. False
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9. Retrieval is the task of permanently removing obsolete or redundant
records from the database.
a. True
*b. False
PR
10. Systems development represents 80 to 90 percent of the total cost
of a computer system.
a. True
*b. False
11. The database administrator is responsible for the security and
ES
integrity of the database.
*a. True
b. False
12. Custom software is developed and maintained by enterprise resource
SI
planners.
a. True
*b. False
VE
13. The internal auditor represents the interests of third-party
outsiders.
a. True
*b. False
G
14. Information technology (IT) audits can be performed by both
internal and external auditors.
*a. True
b. False
R
15. Custom software is the most affordable systems development option.
AD
a. True
*b. False
16. A database is a collection of interconnected computers and
communications devices that allows users to communicate, access data
and applications, and share information and resources.
ES
a. True
*b. False
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17. Systems maintenance consumes the majority of a system’s total
costs.
*a. True
b. False
PR
18. Cloud computing is a practice in which the organization sells its
IT resources to a third-party outsourcing vendor then leases back IT
services from the vendor for a contract period.
a. True
*b. False
ES
19. A potential benefit of cloud computing is that the client firm does
not need to know where its data are being processed.
a. True
*b. False
SI
20. One of the greatest disadvantages of database systems is that all
data is always available to all users.
a. True
VE
*b. False
21. Under SOX legislation public accounting firms are no longer allowed
to provide consulting services to audit clients.
*a. True
G
b. False
22. One member of a company’s audit committee must be an independent
R
CPA.
a. True
*b. False
AD
23. Which of the following is not a business resource?
a. raw material
b. labor
c. information
*d. all are business resources
ES
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24. Which level of management is responsible for short-term planning and
coordination of activities necessary to accomplish organizational objectives?
a. operations management
*b. middle management
c. top management
d. line management
PR
25. Which level of management is responsible for controlling day-to-day
operations?
a. top management
b. middle management
ES
*c. operations management
d. executive management
26. Location-independent computing in which shared data centers deliver hosted IT
services over the Internet is called
SI
a. IT outsourcing
b. network administration
*c. cloud computing
d. custom software
VE
27. The value of information for users is determined by all of the following except
a. reliability
b. relevance
*c. convenience
d. completeness
G
28. An example of a nonfinancial transaction is
a. sale of products
R
b. cash disbursement
*c. log of customer calls
d. purchase of inventory
AD
29. An example of a financial transaction is
*a. the purchase of computer
b. a supplier’s price list
c. a delivery schedule
d. an employee benefit brochure
ES
30. Which subsystem is not part of the accounting information system?
LKJHGFDSA
Test Bank For
Accounting Information Systems 10e James A. Hall
Chapter 1 All Chapters Included
1. Information is a business resource.
PR
*a. True
b. False All Answers Included
2. IT outsourcing is location-independent computing.
a. True
*b. False
ES
3. Transaction processing systems convert non-financial transactions
into financial transactions.
a. True
*b. False
SI
4. Information lacking reliability may still have value.
a. True
*b. False
VE
5. A balance sheet prepared in conformity with GAAP is an example of
discretionary reporting.
a. True
*b. False
G
6. The management reporting system provides the internal financial
information needed to manage a business.
R
*a. True
b. False
AD
7. Most of the inputs to the general ledger system come from the
financial reporting system.
a. True
*b. False
ES
8. When preparing discretionary reports, organizations can choose what
information to report and how to present it.
*a. True
b. False
LKJHGFDSA
, lkjhgfdsa
9. Retrieval is the task of permanently removing obsolete or redundant
records from the database.
a. True
*b. False
PR
10. Systems development represents 80 to 90 percent of the total cost
of a computer system.
a. True
*b. False
11. The database administrator is responsible for the security and
ES
integrity of the database.
*a. True
b. False
12. Custom software is developed and maintained by enterprise resource
SI
planners.
a. True
*b. False
VE
13. The internal auditor represents the interests of third-party
outsiders.
a. True
*b. False
G
14. Information technology (IT) audits can be performed by both
internal and external auditors.
*a. True
b. False
R
15. Custom software is the most affordable systems development option.
AD
a. True
*b. False
16. A database is a collection of interconnected computers and
communications devices that allows users to communicate, access data
and applications, and share information and resources.
ES
a. True
*b. False
LKJHGFDSA
, lkjhgfdsa
17. Systems maintenance consumes the majority of a system’s total
costs.
*a. True
b. False
PR
18. Cloud computing is a practice in which the organization sells its
IT resources to a third-party outsourcing vendor then leases back IT
services from the vendor for a contract period.
a. True
*b. False
ES
19. A potential benefit of cloud computing is that the client firm does
not need to know where its data are being processed.
a. True
*b. False
SI
20. One of the greatest disadvantages of database systems is that all
data is always available to all users.
a. True
VE
*b. False
21. Under SOX legislation public accounting firms are no longer allowed
to provide consulting services to audit clients.
*a. True
G
b. False
22. One member of a company’s audit committee must be an independent
R
CPA.
a. True
*b. False
AD
23. Which of the following is not a business resource?
a. raw material
b. labor
c. information
*d. all are business resources
ES
LKJHGFDSA
, lkjhgfdsa
24. Which level of management is responsible for short-term planning and
coordination of activities necessary to accomplish organizational objectives?
a. operations management
*b. middle management
c. top management
d. line management
PR
25. Which level of management is responsible for controlling day-to-day
operations?
a. top management
b. middle management
ES
*c. operations management
d. executive management
26. Location-independent computing in which shared data centers deliver hosted IT
services over the Internet is called
SI
a. IT outsourcing
b. network administration
*c. cloud computing
d. custom software
VE
27. The value of information for users is determined by all of the following except
a. reliability
b. relevance
*c. convenience
d. completeness
G
28. An example of a nonfinancial transaction is
a. sale of products
R
b. cash disbursement
*c. log of customer calls
d. purchase of inventory
AD
29. An example of a financial transaction is
*a. the purchase of computer
b. a supplier’s price list
c. a delivery schedule
d. an employee benefit brochure
ES
30. Which subsystem is not part of the accounting information system?
LKJHGFDSA
