Test Bank For Accounting Information Systems 10e James
A. Hall
Chapter 1
1. Information is a business resource.
*a. True
b. False
2. IT outsourcing is location-independent computing.
AP
a. True
*b. False
3. Transaction processing systems convert non-financial transactions
into financial transactions.
EX
a. True
*b. False
4. Information lacking reliability may still have value.
SO
a. True
*b. False
5. A balance sheet prepared in conformity with GAAP is an example of
discretionary reporting.
LU
a. True
*b. False
6. The management reporting system provides the internal financial
information needed to manage a business.
TI
*a. True
b. False
O
7. Most of the inputs to the general ledger system come from the
financial reporting system.
N
a. True
*b. False
S
8. When preparing discretionary reports, organizations can choose what
information to report and how to present it.
*a. True
b. False
, 9. Retrieval is the task of permanently removing obsolete or redundant
records from the database.
a. True
*b. False
10. Systems development represents 80 to 90 percent of the total cost
of a computer system.
AP
a. True
*b. False
11. The database administrator is responsible for the security and
integrity of the database.
EX
*a. True
b. False
12. Custom software is developed and maintained by enterprise resource
SO
planners.
a. True
*b. False
13. The internal auditor represents the interests of third-party
LU
outsiders.
a. True
*b. False
TI
14. Information technology (IT) audits can be performed by both
internal and external auditors.
*a. True
O
b. False
15. Custom software is the most affordable systems development option.
N
a. True
*b. False
S
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.
a. True
*b. False
, 17. Systems maintenance consumes the majority of a system’s total
costs.
*a. True
b. False
AP
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
EX
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
SO
20. One of the greatest disadvantages of database systems is that all
data is always available to all users.
a. True
*b. False
LU
21. Under SOX legislation public accounting firms are no longer allowed
to provide consulting services to audit clients.
*a. True
TI
b. False
22. One member of a company’s audit committee must be an independent
O
CPA.
a. True
*b. False
N
23. Which of the following is not a business resource?
S
a. raw material
b. labor
c. information
*d. all are business resources
, 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
AP
25. Which level of management is responsible for controlling day-to-day
operations?
a. top management
b. middle management
*c. operations management
EX
d. executive management
26. Location-independent computing in which shared data centers deliver hosted IT
services over the Internet is called
SO
a. IT outsourcing
b. network administration
*c. cloud computing
d. custom software
27. The value of information for users is determined by all of the following except
LU
a. reliability
b. relevance
*c. convenience
d. completeness
TI
28. An example of a nonfinancial transaction is
a. sale of products
O
b. cash disbursement
*c. log of customer calls
d. purchase of inventory
N
29. An example of a financial transaction is
S
*a. the purchase of computer
b. a supplier’s price list
c. a delivery schedule
d. an employee benefit brochure
30. Which subsystem is not part of the accounting information system?
A. Hall
Chapter 1
1. Information is a business resource.
*a. True
b. False
2. IT outsourcing is location-independent computing.
AP
a. True
*b. False
3. Transaction processing systems convert non-financial transactions
into financial transactions.
EX
a. True
*b. False
4. Information lacking reliability may still have value.
SO
a. True
*b. False
5. A balance sheet prepared in conformity with GAAP is an example of
discretionary reporting.
LU
a. True
*b. False
6. The management reporting system provides the internal financial
information needed to manage a business.
TI
*a. True
b. False
O
7. Most of the inputs to the general ledger system come from the
financial reporting system.
N
a. True
*b. False
S
8. When preparing discretionary reports, organizations can choose what
information to report and how to present it.
*a. True
b. False
, 9. Retrieval is the task of permanently removing obsolete or redundant
records from the database.
a. True
*b. False
10. Systems development represents 80 to 90 percent of the total cost
of a computer system.
AP
a. True
*b. False
11. The database administrator is responsible for the security and
integrity of the database.
EX
*a. True
b. False
12. Custom software is developed and maintained by enterprise resource
SO
planners.
a. True
*b. False
13. The internal auditor represents the interests of third-party
LU
outsiders.
a. True
*b. False
TI
14. Information technology (IT) audits can be performed by both
internal and external auditors.
*a. True
O
b. False
15. Custom software is the most affordable systems development option.
N
a. True
*b. False
S
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.
a. True
*b. False
, 17. Systems maintenance consumes the majority of a system’s total
costs.
*a. True
b. False
AP
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
EX
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
SO
20. One of the greatest disadvantages of database systems is that all
data is always available to all users.
a. True
*b. False
LU
21. Under SOX legislation public accounting firms are no longer allowed
to provide consulting services to audit clients.
*a. True
TI
b. False
22. One member of a company’s audit committee must be an independent
O
CPA.
a. True
*b. False
N
23. Which of the following is not a business resource?
S
a. raw material
b. labor
c. information
*d. all are business resources
, 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
AP
25. Which level of management is responsible for controlling day-to-day
operations?
a. top management
b. middle management
*c. operations management
EX
d. executive management
26. Location-independent computing in which shared data centers deliver hosted IT
services over the Internet is called
SO
a. IT outsourcing
b. network administration
*c. cloud computing
d. custom software
27. The value of information for users is determined by all of the following except
LU
a. reliability
b. relevance
*c. convenience
d. completeness
TI
28. An example of a nonfinancial transaction is
a. sale of products
O
b. cash disbursement
*c. log of customer calls
d. purchase of inventory
N
29. An example of a financial transaction is
S
*a. the purchase of computer
b. a supplier’s price list
c. a delivery schedule
d. an employee benefit brochure
30. Which subsystem is not part of the accounting information system?
