ACC406 FINAL EXAM QUESTIONS WITH
CORRECT ANSWERS 2025/2026
Accounting information system (AIS) - CORRECT ANSWER -a system that collects, records, stores,
and processes business data to produce information for decision makers
Decision makers - CORRECT ANSWER -internal users - management, employees
External users - stockholders, creditors, customers, government, financial institutions
The accounting process - CORRECT ANSWER -1. Capture transaction data on source documents
2. Journalize transactions
3. Post transactions to ledger
4. Prepare trial balance
5. Journalize and post adjusting entries
6. Prepare adjusted trial balance
7. Prepare financial statements
8. Journalize and post closing entries
9. Prepare post-closing trial balance
Problems with the traditional view of accounting - CORRECT ANSWER -- transactions-oriented as
opposed to events-oriented
- narrow focus on financial data
- reporting is periodic and not real-time
- limited accessibility to information
- too high level of aggregation
- limited flexibility
,2 forms of computerized bookkeeping - CORRECT ANSWER -1. COBOL (Common Business-
Oriented Language) - custom built for each firm
2. Accounting software package - off the shelf
The database approach - CORRECT ANSWER -store all business data in one place, one time, in its
most disaggregated form; events-oriented
Enterprise wide repository - CORRECT ANSWER -storage of all entity and event data in a single
integrated repository
ERP system - CORRECT ANSWER -span the entire enterprise and address all of the enterprise's
resources; support cross-functional integration
3-tier architecture of ERP system - CORRECT ANSWER -1. Presentation layer - what users see
2. Application layer - number-crunching
3. Database layer - where raw data is inputted
Data - CORRECT ANSWER -raw, unprocessed facts, that are useless without further processing
Information - CORRECT ANSWER -data made meaningful
Characteristics of useful information - CORRECT ANSWER -- relevant
- reliable
- complete
- timely
- understandable
, - verifiable
Bit - CORRECT ANSWER -binary digit that can take a value of 0 (turned off) or 1 (turned on)
Byte - CORRECT ANSWER -a group of bits (usually 8)
Field - CORRECT ANSWER -a group of related bytes
Records - CORRECT ANSWER -a group of related fields
File - CORRECT ANSWER -a group of logical records
Database - CORRECT ANSWER -a collection of logically related files
Numeric field - CORRECT ANSWER -used to store integers and real numbers
Text (alphanumeric) field - CORRECT ANSWER -can store any keyboard character
Currency field - CORRECT ANSWER -used for monetary values
Date/time field - CORRECT ANSWER -can store date only, time only, or both date and time
Boolean field - CORRECT ANSWER -can have only 1 of 2 possible values (i.e. True/false)
Counter field - CORRECT ANSWER -automatically incremented by 1 every time a new record is
added
CORRECT ANSWERS 2025/2026
Accounting information system (AIS) - CORRECT ANSWER -a system that collects, records, stores,
and processes business data to produce information for decision makers
Decision makers - CORRECT ANSWER -internal users - management, employees
External users - stockholders, creditors, customers, government, financial institutions
The accounting process - CORRECT ANSWER -1. Capture transaction data on source documents
2. Journalize transactions
3. Post transactions to ledger
4. Prepare trial balance
5. Journalize and post adjusting entries
6. Prepare adjusted trial balance
7. Prepare financial statements
8. Journalize and post closing entries
9. Prepare post-closing trial balance
Problems with the traditional view of accounting - CORRECT ANSWER -- transactions-oriented as
opposed to events-oriented
- narrow focus on financial data
- reporting is periodic and not real-time
- limited accessibility to information
- too high level of aggregation
- limited flexibility
,2 forms of computerized bookkeeping - CORRECT ANSWER -1. COBOL (Common Business-
Oriented Language) - custom built for each firm
2. Accounting software package - off the shelf
The database approach - CORRECT ANSWER -store all business data in one place, one time, in its
most disaggregated form; events-oriented
Enterprise wide repository - CORRECT ANSWER -storage of all entity and event data in a single
integrated repository
ERP system - CORRECT ANSWER -span the entire enterprise and address all of the enterprise's
resources; support cross-functional integration
3-tier architecture of ERP system - CORRECT ANSWER -1. Presentation layer - what users see
2. Application layer - number-crunching
3. Database layer - where raw data is inputted
Data - CORRECT ANSWER -raw, unprocessed facts, that are useless without further processing
Information - CORRECT ANSWER -data made meaningful
Characteristics of useful information - CORRECT ANSWER -- relevant
- reliable
- complete
- timely
- understandable
, - verifiable
Bit - CORRECT ANSWER -binary digit that can take a value of 0 (turned off) or 1 (turned on)
Byte - CORRECT ANSWER -a group of bits (usually 8)
Field - CORRECT ANSWER -a group of related bytes
Records - CORRECT ANSWER -a group of related fields
File - CORRECT ANSWER -a group of logical records
Database - CORRECT ANSWER -a collection of logically related files
Numeric field - CORRECT ANSWER -used to store integers and real numbers
Text (alphanumeric) field - CORRECT ANSWER -can store any keyboard character
Currency field - CORRECT ANSWER -used for monetary values
Date/time field - CORRECT ANSWER -can store date only, time only, or both date and time
Boolean field - CORRECT ANSWER -can have only 1 of 2 possible values (i.e. True/false)
Counter field - CORRECT ANSWER -automatically incremented by 1 every time a new record is
added
