Accounting Information Systems 3e Vernon Richardson, Janie Chang, Rodney
Smith (Test Bank All Chapters, 100% Original Verified, A+ Grade) Answers At The
End Of Each
1|Page
,Chapter 1:
1) After a college football game, a box score is produced detailing the number of yards passing and
running, receptions made and the number of interceptions and fumbles lost (among other statistics).
Using the characteristics of useful information (including relevance and reliability), please explain
how this box score meets (or does not meet) the characteristics of useful information. How would
the football coach use this information to prepare for the next game, decide which players to start,
etc.?
Answer:
Relevance: The statistics reflect the team’s and individual players’ performance, helping the
coach make tactical decisions.
Reliability: If recorded accurately, the data reliably represents the game events.
Other characteristics: Timely (available soon after the game), understandable, and complete
for key metrics.
Use by coach: Decide which players to start, identify areas for improvement, adjust game
strategies, and plan training focus (e.g., more passing plays if running yards are low).
2) List and explain three ways that AIS affects the income statement and the firm’s profitability.
Answer:
1. Revenue tracking: Accurate recording ensures proper recognition of sales, impacting net
income.
2. Expense monitoring: Tracks costs like payroll, utilities, and COGS, allowing management to
control expenses and improve profitability.
3. Financial reporting: Timely, reliable reports allow managers to analyze profit margins and
make informed strategic decisions to maximize profits.
2|Page
,3) Some would argue that the role of accounting is simply as an information provider. Others
suggest that accountants serve the role of business analyst. Which role produces more value for a
company like Starbucks? In the area of accounting information systems, what specifically can the
accountant do to serve as a business analyst to help address business opportunities?
Answer:
More value: Business analyst role, as it provides actionable insights for strategic decisions.
Specific AIS tasks:
o Analyze sales and loyalty card data to identify top-selling products.
o Forecast inventory needs and optimize supply chain.
o Suggest marketing strategies based on customer trends.
o Evaluate profitability of new stores or promotions.
4) Explain the types of discretionary information a company like Google would collect from its
accounting information system.
Answer:
Customer trends and preferences (ad clicks, app usage, searches).
Profitability analysis by product or service.
Forecasting and budgeting data.
Cost-benefit analysis for projects and investments.
Strategic insights for new product launches or market expansion.
3|Page
, 5) Why would the transform IT strategic role be more impactful on stock price than the automate IT
strategic role?
Answer:
Automate IT: Improves efficiency and reduces operational costs.
Transform IT: Enables new business models, creates revenue streams, and provides
competitive advantage.
Impact: Investors value growth and innovation, so transformational IT has a greater effect on
stock price than simple automation.
6) Stephen Gillett, Starbucks CIO, argues that his most crucial duty is to enhance Starbucks’ ability
to mine its customer data to help “reignite our passion with our customers.” Starbucks used loyalty
cards (Starbucks’ Reward cards) and surveys to track its customers’ purchases and build profiles of
their customers as mentioned in the opening chapter vignette. Why is this a good example of
customer relationship management (CRM)?
Answer:
Tracks individual customer purchases, preferences, and frequency.
Builds detailed customer profiles for targeted promotions.
Enables personalized offers and communications, increasing customer loyalty.
Drives repeat business and strengthens the customer relationship, the core goal of CRM.
7) Michael Dell of Dell Computer explained: “We tell our suppliers exactly what our daily production
requirements are so it is not, "Well, every two weeks deliver 5,000 to this warehouse, and we'll put
them on the shelf, and then we'll take them off the shelf." It is, "Tomorrow morning we need 8,562,
4|Page
Smith (Test Bank All Chapters, 100% Original Verified, A+ Grade) Answers At The
End Of Each
1|Page
,Chapter 1:
1) After a college football game, a box score is produced detailing the number of yards passing and
running, receptions made and the number of interceptions and fumbles lost (among other statistics).
Using the characteristics of useful information (including relevance and reliability), please explain
how this box score meets (or does not meet) the characteristics of useful information. How would
the football coach use this information to prepare for the next game, decide which players to start,
etc.?
Answer:
Relevance: The statistics reflect the team’s and individual players’ performance, helping the
coach make tactical decisions.
Reliability: If recorded accurately, the data reliably represents the game events.
Other characteristics: Timely (available soon after the game), understandable, and complete
for key metrics.
Use by coach: Decide which players to start, identify areas for improvement, adjust game
strategies, and plan training focus (e.g., more passing plays if running yards are low).
2) List and explain three ways that AIS affects the income statement and the firm’s profitability.
Answer:
1. Revenue tracking: Accurate recording ensures proper recognition of sales, impacting net
income.
2. Expense monitoring: Tracks costs like payroll, utilities, and COGS, allowing management to
control expenses and improve profitability.
3. Financial reporting: Timely, reliable reports allow managers to analyze profit margins and
make informed strategic decisions to maximize profits.
2|Page
,3) Some would argue that the role of accounting is simply as an information provider. Others
suggest that accountants serve the role of business analyst. Which role produces more value for a
company like Starbucks? In the area of accounting information systems, what specifically can the
accountant do to serve as a business analyst to help address business opportunities?
Answer:
More value: Business analyst role, as it provides actionable insights for strategic decisions.
Specific AIS tasks:
o Analyze sales and loyalty card data to identify top-selling products.
o Forecast inventory needs and optimize supply chain.
o Suggest marketing strategies based on customer trends.
o Evaluate profitability of new stores or promotions.
4) Explain the types of discretionary information a company like Google would collect from its
accounting information system.
Answer:
Customer trends and preferences (ad clicks, app usage, searches).
Profitability analysis by product or service.
Forecasting and budgeting data.
Cost-benefit analysis for projects and investments.
Strategic insights for new product launches or market expansion.
3|Page
, 5) Why would the transform IT strategic role be more impactful on stock price than the automate IT
strategic role?
Answer:
Automate IT: Improves efficiency and reduces operational costs.
Transform IT: Enables new business models, creates revenue streams, and provides
competitive advantage.
Impact: Investors value growth and innovation, so transformational IT has a greater effect on
stock price than simple automation.
6) Stephen Gillett, Starbucks CIO, argues that his most crucial duty is to enhance Starbucks’ ability
to mine its customer data to help “reignite our passion with our customers.” Starbucks used loyalty
cards (Starbucks’ Reward cards) and surveys to track its customers’ purchases and build profiles of
their customers as mentioned in the opening chapter vignette. Why is this a good example of
customer relationship management (CRM)?
Answer:
Tracks individual customer purchases, preferences, and frequency.
Builds detailed customer profiles for targeted promotions.
Enables personalized offers and communications, increasing customer loyalty.
Drives repeat business and strengthens the customer relationship, the core goal of CRM.
7) Michael Dell of Dell Computer explained: “We tell our suppliers exactly what our daily production
requirements are so it is not, "Well, every two weeks deliver 5,000 to this warehouse, and we'll put
them on the shelf, and then we'll take them off the shelf." It is, "Tomorrow morning we need 8,562,
4|Page
