Accounting nInformation
nSystems
Instructor’s SolutionsManual
n n
Accounting Information n
Systems
15th Edition n
Marshall B. Romney n n
Professor Emeritus, Brigham Young University
n n n n
Paul John Steinbart
n n
Professor Emeritus, Arizona State University
n n n n
Scott L. Summers
n n
Brigham Young University
n n
David A. Wood n n
Brigham Young University
n n
3-1
Copyright n(c) n2021 nPearson nEducation,
nInc.
, Accounting nInformation
nSystems
This nwork nis nprotected nby nUnited nStates ncopyright nlaws nand nis nprovided
nsolely nfor nthe nuse nof ninstructors nin nteaching ntheir ncourses nand nassessing
nstudent nlearning. nDissemination nor nsale nof nany npart nof nthis nwork
n(including non nthe nWorld nWide nWeb) nwill ndestroy nthe nintegrity nof nthe
nwork nand nis nnot npermitted. The nwork nand nmaterials nfrom nit nshould nnever
nbe nmade navailable nto nstudents nexcept nby ninstructors nusing nthe
naccompanying ntext nin ntheir nclasses. All nrecipients nof nthis nwork nare
nexpected nto nabide nby nthese nrestrictions nand nto nhonor nthe nintended
npedagogical npurposes nand nthe nneedsn of nother ninstructors nwho nrely non nthese
nmaterials.
Copyright n© n2021 nby nPearson nEducation, nInc. nor nits naffiliates. nAll nRights nReserved.
nManufacturedn in nthe nUnited nStates nof nAmerica. nThis npublication nis nprotected nby
ncopyright, nand npermission nshould nbe nobtained nfrom nthe npublisher nprior nto nany
nprohibited nreproduction, nstorage nin na nretrieval n system, nor ntransmission nin nany
nform nor n by nany nmeans, nelectronic, nmechanical, nphotocopying, nrecording, nor
notherwise. nFor ninformation nregarding npermissions, nrequest nforms, nand nthe
nappropriate ncontacts nwithin nthe nPearson nEducation nGlobal nRights nand nPermissions
ndepartment, nplease nvisit nwww.pearsoned.com/permissions/.
PEARSON, nALWAYS nLEARNING, nand nREVEL nare nexclusive ntrademarks nowned
nby nPearsonn
Education, nInc. nor nits naffiliates nin nthe nU.S. nand/or nother ncountries.
Unless notherwise nindicated nherein, nany nthird-party ntrademarks, nlogos, nor nicons
nthat nmay nappear ninn this nwork nare nthe nproperty nof ntheir nrespective nowners, nand
nany nreferences nto nthird-party ntrademarks, nlogos, nicons, nor nother ntrade ndress nare
nfor ndemonstrative nor ndescriptive npurposes nonly.n Such nreferences nare nnot nintended
nto nimply nany nsponsorship, nendorsement, nauthorization, nor npromotion nof nPearson’s
nproducts nby nthe nowners nof nsuch nmarks, nor nany nrelationship nbetween nthe nowner
nand nPearson nEducation, nInc., nor nits naffiliates, nauthors, nlicensees, nor ndistributors.
3-2
Copyright n(c) n2021 nPearson nEducation,
nInc.
, Accounting nInformation
nSystems
chapter 1 n
accounting informationsystems: An
n n n
overview
n
Suggested nAnswers nto nDiscussion nQuestions
1.1 The nvalue nof ninformation nis nthe ndifference nbetween nthe nbenefits
nrealized nfrom nusing nthat ninformation nand nthe ncosts nof nproducing nit.
n Would nyou, nor nany norganization,n ever nproduce ninformation nif nits
nexpected ncosts nexceedednits nbenefits? nIf nso, nprovide nsome nexamples.
nIf nnot, nwhy?
Most norganizations nproduce ninformation nonly nif nits nvaluenexceeds nits
ncost. n However, nthere nare n two nsituations nwhere ninformation nmay nbe
nproduced neven nif nits ncost nexceeds nits nvalue.
a. It nis noften ndifficult nto nestimate naccurately nthe nvalue nof
ninformation nand nthe n cost nof nproducing nit. n Therefore,
norganizations nmay nproduce ninformation n that nthey nexpect nwill
nproduce nbenefits nin nexcess nofn its ncosts, nonly nto nbe ndisappointed
nafter nthe nfact.
b. Production nof nthe ninformation nmay nbe nmandated nby neither na
ngovernment nagency nor na nprivate norganization. nExamples ninclude
nthe ntax nreports nrequired nby nthe nIRS nand ndisclosure nrequirements
nfornfinancial nreporting.
1.2 Can nthe ncharacteristics nof nuseful ninformation nlisted ninnTable n1-1 nbe
nmet nsimultaneously? nOr ndoes nachieving none nmean nsacrificing
nanother?
Several nof nthe ncriteria nin nTable n1.1 ncan nbe nmet nsimultaneously. n For
nexample, nmore ntimely ninformation nis
3-3
Copyright n(c) n2021 nPearson nEducation,
nInc.
, Accounting nInformation
nSystems
also nlikely nto nbe nmore nrelevant. n Verifiable ninformationnis nlikely nto nbe
nmore naccurate.
However, nachieving none nobjective nmay nrequire nsacrificingnanother. n For
nexample, nensuring nthat ninformation nis nmoren complete nmay nreduce nits
ntimeliness. n Similarly, nincreased nverifiability nand naccuracy nmay
nreduce nits n timeliness.
The ndecision nmaker nmust ndecide nwhich ntrade-offs narenwarranted
nin neach nsituation.
1.3 You nand na nfew nof nyour nclassmates ndecided nto nbecome nentrepreneurs.
n You ncame nup nwith na ngreat nidea nfor na nnewnmobile nphone napplication
nthat nyou nthink nwill nmake nlots nof nmoney. nYour nbusiness nplan nwon
nsecond nplace nin na nlocal ncompetition, nand nyou nare nusing nthe n$10,000
nprize nto nsupport nyourselves nas nyou nstart nyour ncompany.
a. Identify nthe nkey ndecisions nyou nneed nto nmake nto nbe nsuccessful
nentrepreneurs, nthe ninformation nyou nneed nton make nthem, nand nthe
nbusiness nprocesses nyou nwill nneed nto nengage nin.
b. Your ncompany nwill nneed nto nexchange ninformation nwithnvarious
nexternal nparties. nIdentify nthe nexternal nparties, nand nspecify nthe
ninformation nreceived nfrom nand nsent nto neach nof nthem.
The nauthor nturns nthis nquestion ninto nan nin-class ngroup nactivity.
nStudents nare ndivided nup nin ngroups, ntold nton
close ntheir nbooks, nand
ngiven n15 nminutes nto:
a. Think nthrough nthe nbusiness nprocesses, nkey ndecisions,nand
ninformation nneeds nissues nin ntheir ngroup.
b. Identify nthe nexternal nusers nof ninformation nand nspecify nthe
ninformation nreceived nfrom nand nsent ntoneach nof nthem.
One ngroup nis nselected nto npresent ntheir nanswers nto nthe nclass. nThe nother
ngroups nare ntold nto n challenge nthe ngroup’s nanswers, nprovide nalternative
nanswers, nand n chip nin nwith nadditional nanswers nnot nprovided nby nthe
nselected ngroup. nSince nthe ngroup nthat npresents nis n not nselected n until nafter
nthe ntime nhas nexpired, nstudents nare nmotivated n
to ndo na ngood njob, nas nthey
nwill nbe npresenting nto ntheir npeers.
The nvalue nof nthis nactivity nis nnot nin narriving nat na
3-4
Copyright n(c) n2021 nPearson nEducation,
nInc.
nSystems
Instructor’s SolutionsManual
n n
Accounting Information n
Systems
15th Edition n
Marshall B. Romney n n
Professor Emeritus, Brigham Young University
n n n n
Paul John Steinbart
n n
Professor Emeritus, Arizona State University
n n n n
Scott L. Summers
n n
Brigham Young University
n n
David A. Wood n n
Brigham Young University
n n
3-1
Copyright n(c) n2021 nPearson nEducation,
nInc.
, Accounting nInformation
nSystems
This nwork nis nprotected nby nUnited nStates ncopyright nlaws nand nis nprovided
nsolely nfor nthe nuse nof ninstructors nin nteaching ntheir ncourses nand nassessing
nstudent nlearning. nDissemination nor nsale nof nany npart nof nthis nwork
n(including non nthe nWorld nWide nWeb) nwill ndestroy nthe nintegrity nof nthe
nwork nand nis nnot npermitted. The nwork nand nmaterials nfrom nit nshould nnever
nbe nmade navailable nto nstudents nexcept nby ninstructors nusing nthe
naccompanying ntext nin ntheir nclasses. All nrecipients nof nthis nwork nare
nexpected nto nabide nby nthese nrestrictions nand nto nhonor nthe nintended
npedagogical npurposes nand nthe nneedsn of nother ninstructors nwho nrely non nthese
nmaterials.
Copyright n© n2021 nby nPearson nEducation, nInc. nor nits naffiliates. nAll nRights nReserved.
nManufacturedn in nthe nUnited nStates nof nAmerica. nThis npublication nis nprotected nby
ncopyright, nand npermission nshould nbe nobtained nfrom nthe npublisher nprior nto nany
nprohibited nreproduction, nstorage nin na nretrieval n system, nor ntransmission nin nany
nform nor n by nany nmeans, nelectronic, nmechanical, nphotocopying, nrecording, nor
notherwise. nFor ninformation nregarding npermissions, nrequest nforms, nand nthe
nappropriate ncontacts nwithin nthe nPearson nEducation nGlobal nRights nand nPermissions
ndepartment, nplease nvisit nwww.pearsoned.com/permissions/.
PEARSON, nALWAYS nLEARNING, nand nREVEL nare nexclusive ntrademarks nowned
nby nPearsonn
Education, nInc. nor nits naffiliates nin nthe nU.S. nand/or nother ncountries.
Unless notherwise nindicated nherein, nany nthird-party ntrademarks, nlogos, nor nicons
nthat nmay nappear ninn this nwork nare nthe nproperty nof ntheir nrespective nowners, nand
nany nreferences nto nthird-party ntrademarks, nlogos, nicons, nor nother ntrade ndress nare
nfor ndemonstrative nor ndescriptive npurposes nonly.n Such nreferences nare nnot nintended
nto nimply nany nsponsorship, nendorsement, nauthorization, nor npromotion nof nPearson’s
nproducts nby nthe nowners nof nsuch nmarks, nor nany nrelationship nbetween nthe nowner
nand nPearson nEducation, nInc., nor nits naffiliates, nauthors, nlicensees, nor ndistributors.
3-2
Copyright n(c) n2021 nPearson nEducation,
nInc.
, Accounting nInformation
nSystems
chapter 1 n
accounting informationsystems: An
n n n
overview
n
Suggested nAnswers nto nDiscussion nQuestions
1.1 The nvalue nof ninformation nis nthe ndifference nbetween nthe nbenefits
nrealized nfrom nusing nthat ninformation nand nthe ncosts nof nproducing nit.
n Would nyou, nor nany norganization,n ever nproduce ninformation nif nits
nexpected ncosts nexceedednits nbenefits? nIf nso, nprovide nsome nexamples.
nIf nnot, nwhy?
Most norganizations nproduce ninformation nonly nif nits nvaluenexceeds nits
ncost. n However, nthere nare n two nsituations nwhere ninformation nmay nbe
nproduced neven nif nits ncost nexceeds nits nvalue.
a. It nis noften ndifficult nto nestimate naccurately nthe nvalue nof
ninformation nand nthe n cost nof nproducing nit. n Therefore,
norganizations nmay nproduce ninformation n that nthey nexpect nwill
nproduce nbenefits nin nexcess nofn its ncosts, nonly nto nbe ndisappointed
nafter nthe nfact.
b. Production nof nthe ninformation nmay nbe nmandated nby neither na
ngovernment nagency nor na nprivate norganization. nExamples ninclude
nthe ntax nreports nrequired nby nthe nIRS nand ndisclosure nrequirements
nfornfinancial nreporting.
1.2 Can nthe ncharacteristics nof nuseful ninformation nlisted ninnTable n1-1 nbe
nmet nsimultaneously? nOr ndoes nachieving none nmean nsacrificing
nanother?
Several nof nthe ncriteria nin nTable n1.1 ncan nbe nmet nsimultaneously. n For
nexample, nmore ntimely ninformation nis
3-3
Copyright n(c) n2021 nPearson nEducation,
nInc.
, Accounting nInformation
nSystems
also nlikely nto nbe nmore nrelevant. n Verifiable ninformationnis nlikely nto nbe
nmore naccurate.
However, nachieving none nobjective nmay nrequire nsacrificingnanother. n For
nexample, nensuring nthat ninformation nis nmoren complete nmay nreduce nits
ntimeliness. n Similarly, nincreased nverifiability nand naccuracy nmay
nreduce nits n timeliness.
The ndecision nmaker nmust ndecide nwhich ntrade-offs narenwarranted
nin neach nsituation.
1.3 You nand na nfew nof nyour nclassmates ndecided nto nbecome nentrepreneurs.
n You ncame nup nwith na ngreat nidea nfor na nnewnmobile nphone napplication
nthat nyou nthink nwill nmake nlots nof nmoney. nYour nbusiness nplan nwon
nsecond nplace nin na nlocal ncompetition, nand nyou nare nusing nthe n$10,000
nprize nto nsupport nyourselves nas nyou nstart nyour ncompany.
a. Identify nthe nkey ndecisions nyou nneed nto nmake nto nbe nsuccessful
nentrepreneurs, nthe ninformation nyou nneed nton make nthem, nand nthe
nbusiness nprocesses nyou nwill nneed nto nengage nin.
b. Your ncompany nwill nneed nto nexchange ninformation nwithnvarious
nexternal nparties. nIdentify nthe nexternal nparties, nand nspecify nthe
ninformation nreceived nfrom nand nsent nto neach nof nthem.
The nauthor nturns nthis nquestion ninto nan nin-class ngroup nactivity.
nStudents nare ndivided nup nin ngroups, ntold nton
close ntheir nbooks, nand
ngiven n15 nminutes nto:
a. Think nthrough nthe nbusiness nprocesses, nkey ndecisions,nand
ninformation nneeds nissues nin ntheir ngroup.
b. Identify nthe nexternal nusers nof ninformation nand nspecify nthe
ninformation nreceived nfrom nand nsent ntoneach nof nthem.
One ngroup nis nselected nto npresent ntheir nanswers nto nthe nclass. nThe nother
ngroups nare ntold nto n challenge nthe ngroup’s nanswers, nprovide nalternative
nanswers, nand n chip nin nwith nadditional nanswers nnot nprovided nby nthe
nselected ngroup. nSince nthe ngroup nthat npresents nis n not nselected n until nafter
nthe ntime nhas nexpired, nstudents nare nmotivated n
to ndo na ngood njob, nas nthey
nwill nbe npresenting nto ntheir npeers.
The nvalue nof nthis nactivity nis nnot nin narriving nat na
3-4
Copyright n(c) n2021 nPearson nEducation,
nInc.
