Accounting Information Systems 16th Edition Test Bank by Romney & Steinbart – 2025 Verified Exam Questions & Answers PDF

[TEST BANK] ACCOUNTING
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INFORMATION SYSTEMS, 15TH
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EDITION BY ROMNEY,
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STEINBART, SUMMERS, WOOD
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, Chapter 1 nn n n Accounting Information Systems: An Overview nn nn nn nn




1.1 Distinguish data from information, discuss the characteristics of useful information, and
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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?
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A) Data is the output of an AIS.
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B) Information is the primary output of an AIS. nn nn nn nn nn nn nn



C) Data is more useful in decision making than information.
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D) Data and information are the same.
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Answer: B n n




2) Information is best described as nn nn nn nn




A) raw facts about transactions.
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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.
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D) the same thing as data.
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Answer: B n n




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.
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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.
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Answer: C n n




4) An accounting information system (AIS) processes
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.
A) data; information nn



B) data; transactions nn



C) information; data nn



D) data; benefits nn




nn Answer: A n n




5) information reduces uncertainty, improves decision makers' ability to make nn nn nn nn nn nn nn nn



predictions, or confirms expectations.
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A) Timely


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,B) Reliable
C) Relevant
D) Complete

nn Answer: C n n




6) Information that is free from error or bias and accurately represents the events or
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activities of the organization is
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A) relevant.
B) reliable / Faithful Representation.
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C) verifiable.
D) timely.

Answer: B n n




7) Information that does not omit important aspects of the underlying events or
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activities that it measures is
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A) complete.
B) accessible.
C) relevant.
D) timely.

Answer: A n n




8) Information is nn nn when two knowledgeable people independently produce the
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same information.
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A) verifiable
B) relevant
C) reliable
D) complete

nn Answer:

n n A

9) Data must be converted into information to be considered useful and meaningful for
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decision making. There are six characteristics that make information both useful and
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meaningful. If information is free from error or bias and accurately represents the events
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or activities of the organization, it is representative of the characteristic of
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A) relevancy.
B) timeliness.
C) understandability.
D) reliability.

2

, Answer: D n n




10) Inventory information is provided in real time by a firm's accounting information
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system. The accuracy of this information is questionable, however, since the production
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manager often reports stock outs of components that the system indicates are in stock.
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Which of the following characteristics of useful information is absent in the situation
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described above?
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A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible

nn Answer: B n n




11) Cheryl Metrejean has been the controller of Downtown Tires for 25 years. Ownership
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of the firm recently changed hands and the new owners are conducting an audit of the
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financial records. The audit has been unable to reproduce financial reports that were
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prepared by Ms. Metrejean. While there is no evidence of wrongdoing, the auditors are
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concerned that the discrepancies might contribute to poor decisions. Which of the
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following characteristics of useful information is absent in the situation described above?
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A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible

nn Answer: F n n




12) In 2003, Singh Manufacturing implemented a Web-based information system that
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allows all employees to access mission-critical information. The intention was to increase
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production efficiency. Unfortunately, it had the opposite effect, as deliveries fell behind
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schedule and costs increased. Shaman Gupta, the director of information technology
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services, asked Ashlee Wells to come in and talk with him about the system. Ashlee is a
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long-time employee of Singh, and her opinion is valued by her peers and by her
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supervisor.
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"So Ashlee, how's it going down there in the shop?"
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"Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan
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production. Now, we got that computer system. Most of us can't figure out how to use it to
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do our jobs. Is there some way to print out a pick list?"
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