ACCOUNTING INFORMATION
SYSTEMS 14TH EDITION BY
MARSHALL ROMNEY AND PAUL
STEINBART 2026 PRACTICE
QUESTIONS AND COMPLETE
SOLUTIONS
◉ What are the components of an information system?
Answer: Interrelated components including physical hardware, software,
databases, networks, and the people who use and maintain it.
◉ What is the role of input in an information system?
Answer: Input captures raw and unorganized data into the system for
processing and storage.
◉ What does output refer to in an information system?
Answer: Output refers to information presented in formats that are
useful to users.
◉ What is an Accounting Information System (AIS)?
Answer: A system that performs data collection, transformation, and
reporting specific to financial data.
◉ Define a business event.
,Answer: A single business activity in a business process that occurs
during normal operations, such as selling goods or purchasing
equipment.
◉ What is the profit motive in a business?
Answer: The goal of making a profit to generate cash flow for continued
operations and attract investors.
◉ What are the two reasons for the profit motive?
Answer: 1) Stockholders expect competitive returns based on company
profits. 2) Profits are reinvested to expand operations.
◉ What is a business model?
Answer: A company's plan for operations that identifies the customer
base, products, operation plans, and sources of revenue.
◉ What is a franchise business model?
Answer: A model where individuals purchase and run a franchise of a
popular brand, such as a fast food chain.
◉ Describe the subscription business model.
Answer: A model that charges a monthly fee for unlimited access to a
service or product, like Netflix.
◉ What is the freemium business model?
, Answer: A model that offers free services while charging for upgraded
features.
◉ What are the three primary types of business processes?
Answer: 1) Acquisition and payments processes. 2) Conversion
processes. 3) Marketing, sales, and collections processes.
◉ What is the significance of business events in accounting?
Answer: Business events give rise to accounting transactions that impact
the accounting equation.
◉ What types of events are categorized as operating events?
Answer: Events that occur during normal operations and relate directly
to providing goods or services.
◉ What are financing events?
Answer: Events that involve acquiring cash flows to fund operating
events, such as issuing stocks or applying for loans.
◉ Define investing events.
Answer: Events that provide long-term value by purchasing long-term
assets, such as property or equipment.
◉ What is the basic structure of a business model?
SYSTEMS 14TH EDITION BY
MARSHALL ROMNEY AND PAUL
STEINBART 2026 PRACTICE
QUESTIONS AND COMPLETE
SOLUTIONS
◉ What are the components of an information system?
Answer: Interrelated components including physical hardware, software,
databases, networks, and the people who use and maintain it.
◉ What is the role of input in an information system?
Answer: Input captures raw and unorganized data into the system for
processing and storage.
◉ What does output refer to in an information system?
Answer: Output refers to information presented in formats that are
useful to users.
◉ What is an Accounting Information System (AIS)?
Answer: A system that performs data collection, transformation, and
reporting specific to financial data.
◉ Define a business event.
,Answer: A single business activity in a business process that occurs
during normal operations, such as selling goods or purchasing
equipment.
◉ What is the profit motive in a business?
Answer: The goal of making a profit to generate cash flow for continued
operations and attract investors.
◉ What are the two reasons for the profit motive?
Answer: 1) Stockholders expect competitive returns based on company
profits. 2) Profits are reinvested to expand operations.
◉ What is a business model?
Answer: A company's plan for operations that identifies the customer
base, products, operation plans, and sources of revenue.
◉ What is a franchise business model?
Answer: A model where individuals purchase and run a franchise of a
popular brand, such as a fast food chain.
◉ Describe the subscription business model.
Answer: A model that charges a monthly fee for unlimited access to a
service or product, like Netflix.
◉ What is the freemium business model?
, Answer: A model that offers free services while charging for upgraded
features.
◉ What are the three primary types of business processes?
Answer: 1) Acquisition and payments processes. 2) Conversion
processes. 3) Marketing, sales, and collections processes.
◉ What is the significance of business events in accounting?
Answer: Business events give rise to accounting transactions that impact
the accounting equation.
◉ What types of events are categorized as operating events?
Answer: Events that occur during normal operations and relate directly
to providing goods or services.
◉ What are financing events?
Answer: Events that involve acquiring cash flows to fund operating
events, such as issuing stocks or applying for loans.
◉ Define investing events.
Answer: Events that provide long-term value by purchasing long-term
assets, such as property or equipment.
◉ What is the basic structure of a business model?
