Accounting Information Systems
aa aa
Instructor’sSolutions Manual
a aa
Accounting Information aa
Systems
15th Edition aa
Marshall B. Romney aa aa
Professor Emeritus, Brigham Young University
aa aa aa aa
Paul John Steinbart
aa aa
Professor Emeritus, Arizona State University
aa aa aa aa
Scott L. Summers
aa aa
Brigham Young University
aa aa
David A. Wood aa aa
Brigham Young University
aa aa
3-1
Copyright (c) 2021 Pearson Education, Inc.
aa aa aa aa aa
, Accounting Information Systems aa aa
This work is protected by United States copyright laws and is provided
aa aa aa aa aa aa aa aa aa aa aa
solely for the use of instructors in teaching their courses and assessing
aa aa aa aa aa aa aa aa aa aa aa aa
student learning. Dissemination or sale of any part of this work
aa aa a a aa aa aa aa aa aa aa aa
(including on the World Wide Web) will destroy the integrity of the work
aa aa aa aa aa aa aa aa aa aa aa aa aa
and is not permitted. The work and materials from it should never be
aa aa aa aa aa aa aa aa aa aa aa aa
made available to students except by instructors using the
aa aa aa aa aa aa aa aa aa
accompanying text in their classes.
aa All recipients of this work are aa aa aa aa aa aa aa aa aa
expected to abide by these restrictions and to honor the intended
aa aa aa aa aa aa aa aa aa aa aa
pedagogical purposes and the needs of other instructors who rely on
aa aa aa aa aa aa aa aa aa aa aa
these materials.
aa aa
Copyright © 2021 by Pearson Education, Inc. or its affiliates. All Rights Reserved.
aa aa aa aa aa aa aa aa aa aa aa aa
Manufactured in the United States of America. This publication is protected by copyright, and
aa aa aa aa aa aa aa aa aa aa aa aa aa aa
permission should be obtained from the publisher prior to any prohibited reproduction, storage
aa aa aa aa aa aa aa aa aa aa aa aa aa
in a retrieval system, or transmission in any form or by any means, electronic, mechanical,
aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
photocopying, recording, or otherwise. For information regarding permissions, request forms,
aa aa aa aa aa aa aa aa aa aa
and the appropriate contacts within the Pearson Education Global Rights and Permissions
aa aa aa aa aa aa aa aa aa aa aa aa
department, please visit www.pearsoned.com/permissions/.
aa aa aa aa
PEARSON, ALWAYS LEARNING, and REVEL are exclusive trademarks owned by Pearson
aa aa aa aa aa aa aa aa aa aa
Education, Inc. or its affiliates in the U.S. and/or other countries.
aa aa aa aa aa aa aa aa aa aa aa
Unless otherwise indicated herein, any third-party trademarks, logos, or icons that may appear in
aa aa aa aa aa aa aa aa aa aa aa aa aa
this work are the property of their respective owners, and any references to third-party
aa aa aa aa aa aa aa aa aa aa aa aa aa aa
trademarks, logos, icons, or other trade dress are for demonstrative or descriptive purposes
aa aa aa aa aa aa aa aa aa aa aa aa aa
only. Such references are not intended to imply any sponsorship, endorsement, authorization,
aa aa aa aa aa aa aa aa aa aa aa aa
or promotion of Pearson‘s products by the owners of such marks, or any relationship between
aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
the owner and Pearson Education, Inc., or its affiliates, authors, licensees, or distributors.
aa aa aa aa aa aa aa aa aa aa aa aa aa
3-2
Copyright (c) 2021 Pearson Education, Inc. aa aa aa aa aa
, Accounting Information Systems aa aa
chapter 1 aa
accountinginformation systems: a aa
An overview
aa aa
Suggested Answers to Discussion Questions
aa aa aa aa
1.1 The value of information is the difference between the
aa aa aa aa aa aa aa aa
aabenefits realized from using that information and the
aa aa aa aa aa aa aa
aacosts of producing it. Would you, or any organization,
aa aa aa a a aa aa aa aa
aaever produce information if its expected costs exceeded
aa aa aa aa aa aa aa
aaits benefits? If so, provide some examples. If not,
aa a a aa aa aa aa a a aa
aawhy?
Most organizations produce information only if its value
aa aa aa aa aa aa aa
exceeds its cost. However, there are two situations
aa aa aa a a aa aa aa aa
where information may be produced even if its cost
aa aa aa aa aa aa aa aa aa
exceeds its value.
aa aa aa
a. It is often difficult to estimate accurately the
aa aa aa aa aa aa aa
value of information and the cost of producing it.
aa aa aa aa aa aa aa aa aa
Therefore, organizations may produce information
aa aa aa aa aa
that they expect will produce benefits in excess of
aa aa aa aa aa aa aa aa aa
its costs, only to be disappointed after the fact.
aa aa aa aa aa aa aa aa aa
b. Production of the information may be mandated by aa aa aa aa aa aa aa
either a government agency or a private
aa aa aa aa aa aa aa
organization. Examples include the tax reports
aa a a aa aa aa aa
required by the IRS and disclosure requirements for
aa aa aa aa aa aa aa aa
financial reporting.
aa aa
1.2 Can the characteristics of useful information listed in
aa aa aa aa aa aa aa
aaTable 1-1 be met simultaneously?
aa Or does achieving one
aa aa aa a a aa aa aa
aamean sacrificing another?
aa aa
Several of the criteria in Table 1.1 can be met
aa aa aa aa aa aa aa aa aa
simultaneously. For example, more timely information is
aa a a aa aa aa aa aa
3-3
Copyright (c) 2021 Pearson Education, Inc. aa aa aa aa aa
, Accounting Information Systems aa aa
also likely to be more relevant.
aa aa aa aa aa a a Verifiable information aa
is likely to be more accurate.
aa aa aa aa aa aa
However, achieving one objective may require sacrificing
aa aa aa aa aa aa
another. For example, ensuring that information is more
aa a a aa aa aa aa aa aa
complete may reduce its timeliness.
aa Similarly, aa aa aa aa a a
increased verifiability and accuracy may reduce its
aa aa aa aa aa aa aa
timeliness.
aa
The decision maker must decide which trade-offs are
aa aa aa aa aa aa aa
warranted in each situation.
aa aa aa aa
1.3 You and a few of your classmates decided to become
aa aa aa aa aa aa aa aa aa
aaentrepreneurs. You came up with a great idea for a new a a aa aa aa aa aa aa aa aa aa
aamobile phone application that you think will make lots
aa aa aa aa aa aa aa aa
aaof money.
aa Your business plan won second place in a a a aa aa aa aa aa aa aa
aalocal competition, and you are using the $10,000 prize
aa aa aa aa aa aa aa aa
aato support yourselves as you start your company.
aa aa aa aa aa aa aa
a. Identify the key decisions you need to make to be aa aa aa aa aa aa aa aa aa
successful entrepreneurs, the information you need to
aa aa aa aa aa aa aa
make them, and the business processes you will need to
aa aa aa aa aa aa aa aa aa aa
engage in.
aa aa
b. Your company will need to exchange information with
aa aa aa aa aa aa aa
various external parties. Identify the external
aa aa aa a a aa aa
parties, and specify the information received from
aa aa aa aa aa aa aa
and sent to each of them.
aa aa aa aa aa aa
The author turns this question into an in-class group
aa aa aa aa aa aa aa aa
activity.
aa Students are divided up in groups, told to a a aa aa aa aa aa aa aa
close their books, and given 15 minutes to:
aa aa aa aa aa aa aa aa
a. Think through the business processes, key decisions,
aa aa aa aa aa aa
and information needs issues in their group.
aa aa aa aa aa aa aa
b. Identify the external users of information and aa aa aa aa aa aa
specify the information received from and sent to
aa aa aa aa aa aa aa aa
each of them.
aa aa aa
One group is selected to present their answers to the
aa aa aa aa aa aa aa aa aa
class.
aa The other groups are told to challenge the
a a aa aa aa aa aa aa aa
group’s answers, provide alternative answers, and chip in
aa aa aa aa aa aa aa aa
with additional answers not provided by the selected
aa aa aa aa aa aa aa aa
group. Since the group that presents is not selected
aa a a aa aa aa aa aa aa aa
until after the time has expired, students are motivated
aa aa aa aa aa aa aa aa aa
to do a good job, as they will be presenting to their
aa aa aa aa aa aa aa aa aa aa aa aa
peers.
aa
The value of this activity is not in arriving at a
aa aa aa aa aa aa aa aa aa aa
3-4
Copyright (c) 2021 Pearson Education, Inc. aa aa aa aa aa
aa aa
Instructor’sSolutions Manual
a aa
Accounting Information aa
Systems
15th Edition aa
Marshall B. Romney aa aa
Professor Emeritus, Brigham Young University
aa aa aa aa
Paul John Steinbart
aa aa
Professor Emeritus, Arizona State University
aa aa aa aa
Scott L. Summers
aa aa
Brigham Young University
aa aa
David A. Wood aa aa
Brigham Young University
aa aa
3-1
Copyright (c) 2021 Pearson Education, Inc.
aa aa aa aa aa
, Accounting Information Systems aa aa
This work is protected by United States copyright laws and is provided
aa aa aa aa aa aa aa aa aa aa aa
solely for the use of instructors in teaching their courses and assessing
aa aa aa aa aa aa aa aa aa aa aa aa
student learning. Dissemination or sale of any part of this work
aa aa a a aa aa aa aa aa aa aa aa
(including on the World Wide Web) will destroy the integrity of the work
aa aa aa aa aa aa aa aa aa aa aa aa aa
and is not permitted. The work and materials from it should never be
aa aa aa aa aa aa aa aa aa aa aa aa
made available to students except by instructors using the
aa aa aa aa aa aa aa aa aa
accompanying text in their classes.
aa All recipients of this work are aa aa aa aa aa aa aa aa aa
expected to abide by these restrictions and to honor the intended
aa aa aa aa aa aa aa aa aa aa aa
pedagogical purposes and the needs of other instructors who rely on
aa aa aa aa aa aa aa aa aa aa aa
these materials.
aa aa
Copyright © 2021 by Pearson Education, Inc. or its affiliates. All Rights Reserved.
aa aa aa aa aa aa aa aa aa aa aa aa
Manufactured in the United States of America. This publication is protected by copyright, and
aa aa aa aa aa aa aa aa aa aa aa aa aa aa
permission should be obtained from the publisher prior to any prohibited reproduction, storage
aa aa aa aa aa aa aa aa aa aa aa aa aa
in a retrieval system, or transmission in any form or by any means, electronic, mechanical,
aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
photocopying, recording, or otherwise. For information regarding permissions, request forms,
aa aa aa aa aa aa aa aa aa aa
and the appropriate contacts within the Pearson Education Global Rights and Permissions
aa aa aa aa aa aa aa aa aa aa aa aa
department, please visit www.pearsoned.com/permissions/.
aa aa aa aa
PEARSON, ALWAYS LEARNING, and REVEL are exclusive trademarks owned by Pearson
aa aa aa aa aa aa aa aa aa aa
Education, Inc. or its affiliates in the U.S. and/or other countries.
aa aa aa aa aa aa aa aa aa aa aa
Unless otherwise indicated herein, any third-party trademarks, logos, or icons that may appear in
aa aa aa aa aa aa aa aa aa aa aa aa aa
this work are the property of their respective owners, and any references to third-party
aa aa aa aa aa aa aa aa aa aa aa aa aa aa
trademarks, logos, icons, or other trade dress are for demonstrative or descriptive purposes
aa aa aa aa aa aa aa aa aa aa aa aa aa
only. Such references are not intended to imply any sponsorship, endorsement, authorization,
aa aa aa aa aa aa aa aa aa aa aa aa
or promotion of Pearson‘s products by the owners of such marks, or any relationship between
aa aa aa aa aa aa aa aa aa aa aa aa aa aa aa
the owner and Pearson Education, Inc., or its affiliates, authors, licensees, or distributors.
aa aa aa aa aa aa aa aa aa aa aa aa aa
3-2
Copyright (c) 2021 Pearson Education, Inc. aa aa aa aa aa
, Accounting Information Systems aa aa
chapter 1 aa
accountinginformation systems: a aa
An overview
aa aa
Suggested Answers to Discussion Questions
aa aa aa aa
1.1 The value of information is the difference between the
aa aa aa aa aa aa aa aa
aabenefits realized from using that information and the
aa aa aa aa aa aa aa
aacosts of producing it. Would you, or any organization,
aa aa aa a a aa aa aa aa
aaever produce information if its expected costs exceeded
aa aa aa aa aa aa aa
aaits benefits? If so, provide some examples. If not,
aa a a aa aa aa aa a a aa
aawhy?
Most organizations produce information only if its value
aa aa aa aa aa aa aa
exceeds its cost. However, there are two situations
aa aa aa a a aa aa aa aa
where information may be produced even if its cost
aa aa aa aa aa aa aa aa aa
exceeds its value.
aa aa aa
a. It is often difficult to estimate accurately the
aa aa aa aa aa aa aa
value of information and the cost of producing it.
aa aa aa aa aa aa aa aa aa
Therefore, organizations may produce information
aa aa aa aa aa
that they expect will produce benefits in excess of
aa aa aa aa aa aa aa aa aa
its costs, only to be disappointed after the fact.
aa aa aa aa aa aa aa aa aa
b. Production of the information may be mandated by aa aa aa aa aa aa aa
either a government agency or a private
aa aa aa aa aa aa aa
organization. Examples include the tax reports
aa a a aa aa aa aa
required by the IRS and disclosure requirements for
aa aa aa aa aa aa aa aa
financial reporting.
aa aa
1.2 Can the characteristics of useful information listed in
aa aa aa aa aa aa aa
aaTable 1-1 be met simultaneously?
aa Or does achieving one
aa aa aa a a aa aa aa
aamean sacrificing another?
aa aa
Several of the criteria in Table 1.1 can be met
aa aa aa aa aa aa aa aa aa
simultaneously. For example, more timely information is
aa a a aa aa aa aa aa
3-3
Copyright (c) 2021 Pearson Education, Inc. aa aa aa aa aa
, Accounting Information Systems aa aa
also likely to be more relevant.
aa aa aa aa aa a a Verifiable information aa
is likely to be more accurate.
aa aa aa aa aa aa
However, achieving one objective may require sacrificing
aa aa aa aa aa aa
another. For example, ensuring that information is more
aa a a aa aa aa aa aa aa
complete may reduce its timeliness.
aa Similarly, aa aa aa aa a a
increased verifiability and accuracy may reduce its
aa aa aa aa aa aa aa
timeliness.
aa
The decision maker must decide which trade-offs are
aa aa aa aa aa aa aa
warranted in each situation.
aa aa aa aa
1.3 You and a few of your classmates decided to become
aa aa aa aa aa aa aa aa aa
aaentrepreneurs. You came up with a great idea for a new a a aa aa aa aa aa aa aa aa aa
aamobile phone application that you think will make lots
aa aa aa aa aa aa aa aa
aaof money.
aa Your business plan won second place in a a a aa aa aa aa aa aa aa
aalocal competition, and you are using the $10,000 prize
aa aa aa aa aa aa aa aa
aato support yourselves as you start your company.
aa aa aa aa aa aa aa
a. Identify the key decisions you need to make to be aa aa aa aa aa aa aa aa aa
successful entrepreneurs, the information you need to
aa aa aa aa aa aa aa
make them, and the business processes you will need to
aa aa aa aa aa aa aa aa aa aa
engage in.
aa aa
b. Your company will need to exchange information with
aa aa aa aa aa aa aa
various external parties. Identify the external
aa aa aa a a aa aa
parties, and specify the information received from
aa aa aa aa aa aa aa
and sent to each of them.
aa aa aa aa aa aa
The author turns this question into an in-class group
aa aa aa aa aa aa aa aa
activity.
aa Students are divided up in groups, told to a a aa aa aa aa aa aa aa
close their books, and given 15 minutes to:
aa aa aa aa aa aa aa aa
a. Think through the business processes, key decisions,
aa aa aa aa aa aa
and information needs issues in their group.
aa aa aa aa aa aa aa
b. Identify the external users of information and aa aa aa aa aa aa
specify the information received from and sent to
aa aa aa aa aa aa aa aa
each of them.
aa aa aa
One group is selected to present their answers to the
aa aa aa aa aa aa aa aa aa
class.
aa The other groups are told to challenge the
a a aa aa aa aa aa aa aa
group’s answers, provide alternative answers, and chip in
aa aa aa aa aa aa aa aa
with additional answers not provided by the selected
aa aa aa aa aa aa aa aa
group. Since the group that presents is not selected
aa a a aa aa aa aa aa aa aa
until after the time has expired, students are motivated
aa aa aa aa aa aa aa aa aa
to do a good job, as they will be presenting to their
aa aa aa aa aa aa aa aa aa aa aa aa
peers.
aa
The value of this activity is not in arriving at a
aa aa aa aa aa aa aa aa aa aa
3-4
Copyright (c) 2021 Pearson Education, Inc. aa aa aa aa aa
