, Chapter 1 vb v b Accounting Information Systems: An Overview vb vb vb vb
1.1 Distinguish data from information, discuss the characteristics of useful information,
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and explain how to determine the value of information.
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1) Which of the following statements below shows the contrast between data
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and information?
vb vb
A) Data is the output of an AIS.
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B) Information is the primary output of an AIS. vb vb vb vb vb vb vb
C) Data is more useful in decision making than information.
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D) Data and information are the same.
vb vb vb vb vb
Answer: v b B
2) Information is best described as vb vb vb vb
A) raw facts about transactions.
vb vb vb
B) data that has been organized and processed so that it is meaningful to the user.
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C) facts that are useful when processed in a timely manner.
vb vb vb vb vb vb vb vb vb
D) the same thing as data.
vb vb vb vb
Answer: v b B
3) The value of information can best be determined by
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A) its usefulness to decision makers.
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B) its relevance to decision makers.
vb vb vb vb
C) the benefits associated with obtaining the information minus the cost of producing it.
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D) the extent to which it optimizes the value chain.
vb vb vb vb vb vb vb vb
Answer: v b C
4) An accounting information system (AIS) processes
vb vb vb vb vb vb to provide users with
vb vb vb
.
A) data; information vb
B) data; transactions vb
C) information; data vb
D) data; benefits vb
vb Answer: A v b
5) information reduces uncertainty, improves decision makers' ability to vb vb vb vb vb vb vb
make predictions, or confirms expectations.
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A) Timely
1
,B) Reliable
C) Relevant
D) Complete
vb Answer: C v b
6) Information that is free from error or bias and accurately represents the events or
vb vb vb vb vb vb vb vb vb vb vb vb vb
activities of the organization is
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A) relevant.
B) reliable / Faithful Representation.
vb vb vb
C) verifiable.
D) timely.
Answer: v b B
7) Information that does not omit important aspects of the underlying events or
vb vb vb vb vb vb vb vb vb vb vb
activities that it measures is
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A) complete.
B) accessible.
C) relevant.
D) timely.
Answer: v b A
8) Information is vb vb when two knowledgeable people independently produce
vb vb vb vb vb
the same information.
vb vb vb
A) verifiable
B) relevant
C) reliable
D) complete
vb Answer:
v b A
9) Data must be converted into information to be considered useful and meaningful
vb vb vb vb vb vb vb vb vb vb vb
for decision making. There are six characteristics that make information both useful
vb vb vb vb vb vb vb vb vb vb vb vb
and meaningful. If information is free from error or bias and accurately represents the
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
events or activities of the organization, it is representative of the characteristic of
vb vb vb vb vb vb vb vb vb vb vb vb vb
A) relevancy.
B) timeliness.
C) understandability.
D) reliability.
2
, Answer: v b D
10) Inventory information is provided in real time by a firm's accounting information
vb vb vb vb vb vb vb vb vb vb vb
system. The accuracy of this information is questionable, however, since the
vb vb vb vb vb vb vb vb vb vb vb
production manager often reports stock outs of components that the system indicates
vb vb vb vb vb vb vb vb vb vb vb vb
are in stock. Which of the following characteristics of useful information is absent in
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
the situation described above?
vb vb vb vb
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
vb Answer: B v b
11) Cheryl Metrejean has been the controller of Downtown Tires for 25 years.
vb vb vb vb vb vb vb vb vb vb vb
Ownership of the firm recently changed hands and the new owners are conducting an
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
audit of the financial records. The audit has been unable to reproduce financial reports
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
that were prepared by Ms. Metrejean. While there is no evidence of wrongdoing, the
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
auditors are concerned that the discrepancies might contribute to poor decisions.
vb vb vb vb vb vb vb vb vb vb vb
Which of the following characteristics of useful information is absent in the situation
vb vb vb vb vb vb vb vb vb vb vb vb vb
described above?
vb vb
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
vb Answer: F v b
12) In 2003, Singh Manufacturing implemented a Web-based information system that
vb vb vb vb vb vb vb vb vb
allows all employees to access mission-critical information. The intention was to increase
vb vb vb vb vb vb vb vb vb vb vb vb
production efficiency. Unfortunately, it had the opposite effect, as deliveries fell behind
vb vb vb vb vb vb vb vb vb vb vb vb
schedule and costs increased. Shaman Gupta, the director of information technology
vb vb vb vb vb vb vb vb vb vb vb
services, asked Ashlee Wells to come in and talk with him about the system. Ashlee is
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
a long-time employee of Singh, and her opinion is valued by her peers and by her
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
supervisor.
vb
"So Ashlee, how's it going down there in the shop?"
vb vb vb vb vb vb vb vb vb
"Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
production. Now, we got that computer system. Most of us can't figure out how to use it
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
3
1.1 Distinguish data from information, discuss the characteristics of useful information,
vb vb vb vb vb vb vb vb vb
and explain how to determine the value of information.
vb vb vb vb vb vb vb vb vb
1) Which of the following statements below shows the contrast between data
vb vb vb vb vb vb vb vb vb vb
and information?
vb vb
A) Data is the output of an AIS.
vb vb vb vb vb vb
B) Information is the primary output of an AIS. vb vb vb vb vb vb vb
C) Data is more useful in decision making than information.
vb vb vb vb vb vb vb vb
D) Data and information are the same.
vb vb vb vb vb
Answer: v b B
2) Information is best described as vb vb vb vb
A) raw facts about transactions.
vb vb vb
B) data that has been organized and processed so that it is meaningful to the user.
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
C) facts that are useful when processed in a timely manner.
vb vb vb vb vb vb vb vb vb
D) the same thing as data.
vb vb vb vb
Answer: v b B
3) The value of information can best be determined by
vb vb vb vb vb vb vb vb
A) its usefulness to decision makers.
vb vb vb vb
B) its relevance to decision makers.
vb vb vb vb
C) the benefits associated with obtaining the information minus the cost of producing it.
vb vb vb vb vb vb vb vb vb vb vb vb
D) the extent to which it optimizes the value chain.
vb vb vb vb vb vb vb vb
Answer: v b C
4) An accounting information system (AIS) processes
vb vb vb vb vb vb to provide users with
vb vb vb
.
A) data; information vb
B) data; transactions vb
C) information; data vb
D) data; benefits vb
vb Answer: A v b
5) information reduces uncertainty, improves decision makers' ability to vb vb vb vb vb vb vb
make predictions, or confirms expectations.
vb vb vb vb vb
A) Timely
1
,B) Reliable
C) Relevant
D) Complete
vb Answer: C v b
6) Information that is free from error or bias and accurately represents the events or
vb vb vb vb vb vb vb vb vb vb vb vb vb
activities of the organization is
vb vb vb vb vb
A) relevant.
B) reliable / Faithful Representation.
vb vb vb
C) verifiable.
D) timely.
Answer: v b B
7) Information that does not omit important aspects of the underlying events or
vb vb vb vb vb vb vb vb vb vb vb
activities that it measures is
vb vb vb vb vb
A) complete.
B) accessible.
C) relevant.
D) timely.
Answer: v b A
8) Information is vb vb when two knowledgeable people independently produce
vb vb vb vb vb
the same information.
vb vb vb
A) verifiable
B) relevant
C) reliable
D) complete
vb Answer:
v b A
9) Data must be converted into information to be considered useful and meaningful
vb vb vb vb vb vb vb vb vb vb vb
for decision making. There are six characteristics that make information both useful
vb vb vb vb vb vb vb vb vb vb vb vb
and meaningful. If information is free from error or bias and accurately represents the
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
events or activities of the organization, it is representative of the characteristic of
vb vb vb vb vb vb vb vb vb vb vb vb vb
A) relevancy.
B) timeliness.
C) understandability.
D) reliability.
2
, Answer: v b D
10) Inventory information is provided in real time by a firm's accounting information
vb vb vb vb vb vb vb vb vb vb vb
system. The accuracy of this information is questionable, however, since the
vb vb vb vb vb vb vb vb vb vb vb
production manager often reports stock outs of components that the system indicates
vb vb vb vb vb vb vb vb vb vb vb vb
are in stock. Which of the following characteristics of useful information is absent in
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
the situation described above?
vb vb vb vb
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
vb Answer: B v b
11) Cheryl Metrejean has been the controller of Downtown Tires for 25 years.
vb vb vb vb vb vb vb vb vb vb vb
Ownership of the firm recently changed hands and the new owners are conducting an
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
audit of the financial records. The audit has been unable to reproduce financial reports
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
that were prepared by Ms. Metrejean. While there is no evidence of wrongdoing, the
vb vb vb vb vb vb vb vb vb vb vb vb vb vb
auditors are concerned that the discrepancies might contribute to poor decisions.
vb vb vb vb vb vb vb vb vb vb vb
Which of the following characteristics of useful information is absent in the situation
vb vb vb vb vb vb vb vb vb vb vb vb vb
described above?
vb vb
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
vb Answer: F v b
12) In 2003, Singh Manufacturing implemented a Web-based information system that
vb vb vb vb vb vb vb vb vb
allows all employees to access mission-critical information. The intention was to increase
vb vb vb vb vb vb vb vb vb vb vb vb
production efficiency. Unfortunately, it had the opposite effect, as deliveries fell behind
vb vb vb vb vb vb vb vb vb vb vb vb
schedule and costs increased. Shaman Gupta, the director of information technology
vb vb vb vb vb vb vb vb vb vb vb
services, asked Ashlee Wells to come in and talk with him about the system. Ashlee is
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
a long-time employee of Singh, and her opinion is valued by her peers and by her
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
supervisor.
vb
"So Ashlee, how's it going down there in the shop?"
vb vb vb vb vb vb vb vb vb
"Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
production. Now, we got that computer system. Most of us can't figure out how to use it
vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb vb
3
