Accounting Information Systems Test Bank| James A. Hall; Marshall B. Romney; Vernon Richardson |All Chapters Included| Latest

ACCOUNTING
INFORMATION SYSTEMS
TEST BANK| JAMES A.
HALL; MARSHALL B.
ROMNEY; VERNON
RICHARDSON |ALL
CHAPTERS INCLUDED|
LATEST
Accounting Information Systems Test Bank – Romney,
Steinbart, Summers & Wood
Instructions: Each question has one best answer. Correct answers are bolded, followed
by a rationale and chapter reference.


Chapter 1: Conceptual Foundations of Accounting
Information Systems
1. Which of the following statements below shows the contrast between data and
information?

,A) Data is the primary output of an accounting information system.
B) Information is the primary output of an accounting information system.
C) Data is more useful in decision making than information.
D) Data and information are the same.

Rationale: An AIS processes data (raw facts) to transform it into meaningful
information, which is the primary output that aids users in decision-making. Data is
input; information is output .

2. When a subsystem's goals are inconsistent with the goals of another subsystem
or with the system as a whole, it creates:

A) System inconsistence
B) System conflict
C) Goal inconsistence
D) Goal conflict

Rationale: Goal conflict occurs when a subsystem's objectives are not aligned with the
objectives of another subsystem or the overall organization, hindering the achievement
of the primary goal .

3. When a subsystem achieves its goals while contributing to the organization's
overall goal, it is called:

A) System match
B) System congruence
C) Goal congruence
D) Goal match

Rationale: Goal congruence exists when a subsystem achieves its goals while
contributing to the organization's overall goal. Subsystems should maximize
organizational goals .

4. 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.

Rationale: Information is data that has been organized and processed to be meaningful
to its users. Data are raw facts; information is processed data .

,5. 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.

Rationale: Information is valuable when the benefits derived from its use in decision-
making exceed the costs associated with producing and distributing it .

6. An accounting information system (AIS) processes ________ to provide users with
________.

A) Data; information
B) Data; transactions
C) Information; data
D) Data; benefits

Rationale: An AIS processes data (raw facts) to provide users with information
(meaningful output). Data is input; information is output .

7. ________ information reduces uncertainty, improves decision makers' ability to
make predictions, or confirms expectations.

A) Timely
B) Reliable
C) Relevant
D) Complete

Rationale: Relevant information reduces uncertainty, improves decision makers' ability
to make predictions, or confirms expectations. Relevance is a key characteristic of useful
information .

8. Information that is free from error or bias and accurately represents the events
or activities of the organization is:

A) Relevant
B) Reliable
C) Verifiable
D) Timely

, Rationale: Reliable information is free from error or bias and faithfully represents the
events or activities of the organization. Reliability is essential for decision-making .

9. 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

Rationale: Complete information does not omit important aspects of the underlying
events or activities it measures. Completeness ensures decision makers have all
necessary data .

10. Information is ________ when two knowledgeable people independently produce
the same information.

A) Complete
B) Verifiable
C) Relevant
D) Reliable

Rationale: Verifiable information is information that two knowledgeable people,
working independently, would produce the same results. Verifiability ensures
consistency and reliability .

11. A manager receives a sales report that is complete and accurate but arrives two
weeks after the end of the month. This information lacks which characteristic of
useful information?

A) Relevance
B) Reliability
C) Verifiability
D) Timeliness

Rationale: Timeliness requires information to be provided in time for decision-makers
to use it effectively. Information received too late loses its value .

12. In a retail business, customer sales transaction data is a primary output of
which transaction cycle?