,Test Bank For Accounting Information Systems
Chapter 1—The Information System: An Accountant’s Perspective
Chapter 1—The Information System: An Accountant’s Perspective
TRUE/FALSE
1. Information is a business resource.
ANS: T PTS: 1
2. IT outsourcing is location-independent computing.
ANS: F PTS: 1
3. Transaction processing systems convert non-financial transactions into financial transactions.
ANS: F PTS: 1
4. Information lacking reliability may still have value.
ANS: F PTS: 1
5. A balance sheet prepared in conformity with GAAP is an example of discretionary reporting.
ANS: F PTS: 1
6. The Management Reporting System provides the internal financial information needed to manage a
business.
ANS: T PTS: 1
7. Most of the inputs to the General Ledger System come from the Financial Reporting System.
ANS: F PTS: 1
8. When preparing discretionary reports, organizations can choose what information to report and how to
present it.
ANS: T PTS: 1
9. Retrieval is the task of permanently removing obsolete or redundant records from the database.
ANS: F PTS: 1
10. Systems development represents 80 to 90 percent of the total cost of a computer system.
ANS: F PTS: 1
11. The database administrator is responsible for the security and integrity of the database.
1
,Test Bank For Accounting Information Systems
Chapter 1—The Information System: An Accountant’s Perspective
ANS: T PTS: 1
12. Custom software is completely finished, tested, and ready for implementation.
ANS: F PTS: 1
13. The internal auditor represents the interests of third-party outsiders.
ANS: F PTS: 1
14. Information Technology (IT) audits can be performed by both internal and external auditors.
ANS: T PTS: 1
15. Custom software is the most affordable systems development option.
ANS: F PTS: 1
16. A database is a collection of interconnected computers and communications devices that allows users to
communicate, access data and applications, and share information and resources.
ANS: F PTS: 1
17. Systems maintenance consumes the majority of a system’s total costs.
ANS: T PTS: 1
18. Cloud computing is a practice in which the organization sells its IT resources to a third-party outsourcing
vendor then leases back IT services from the vendor for a contract period.
ANS: F PTS: 1
19. A potential benefit of cloud computing is that the client firm does not need to know where its data are
bring processed.
ANS: F PTS: 1
20. One of the greatest disadvantages of database systems is that all data is always available to all users.
ANS: F PTS: 1
21. Under SOX legislation public accounting firms are no longer allowed to provide consulting services to
audit clients.
ANS: T PTS: 1
22. One member of a company’s audit committee must be an independent CPA.
2
, Test Bank For Accounting Information Systems
Chapter 1—The Information System: An Accountant’s Perspective
ANS: F PTS: 1
MULTIPLE CHOICE
1. Which of the following is not a business resource?
a. raw material
b. labor
c. information
d. all are business resources
ANS: D PTS: 1
2. Which level of management is responsible for short-term planning and coordination of activities
necessary to accomplish organizational objectives?
a. operations management
b. middle management
c. top management
d. line management
ANS: B PTS: 1
3. Which level of management is responsible for controlling day-to-day operations?
a. top management
b. middle management
c. operations management
d. executive management
ANS: C PTS: 1
4. Location-independent computing in which shared data centers deliver hosted IT services over the Internet.
a. IT outsourcing
b. Network administration
c. Cloud computing
d. Custom software
ANS: C PTS: 1
5. The value of information for users is determined by all of the following but
a. reliability
b. relevance
c. convenience
d. completeness
ANS: C PTS: 1
6. An example of a nonfinancial transaction is
a. sale of products
b. cash disbursement
c. log of customer calls
3
Chapter 1—The Information System: An Accountant’s Perspective
Chapter 1—The Information System: An Accountant’s Perspective
TRUE/FALSE
1. Information is a business resource.
ANS: T PTS: 1
2. IT outsourcing is location-independent computing.
ANS: F PTS: 1
3. Transaction processing systems convert non-financial transactions into financial transactions.
ANS: F PTS: 1
4. Information lacking reliability may still have value.
ANS: F PTS: 1
5. A balance sheet prepared in conformity with GAAP is an example of discretionary reporting.
ANS: F PTS: 1
6. The Management Reporting System provides the internal financial information needed to manage a
business.
ANS: T PTS: 1
7. Most of the inputs to the General Ledger System come from the Financial Reporting System.
ANS: F PTS: 1
8. When preparing discretionary reports, organizations can choose what information to report and how to
present it.
ANS: T PTS: 1
9. Retrieval is the task of permanently removing obsolete or redundant records from the database.
ANS: F PTS: 1
10. Systems development represents 80 to 90 percent of the total cost of a computer system.
ANS: F PTS: 1
11. The database administrator is responsible for the security and integrity of the database.
1
,Test Bank For Accounting Information Systems
Chapter 1—The Information System: An Accountant’s Perspective
ANS: T PTS: 1
12. Custom software is completely finished, tested, and ready for implementation.
ANS: F PTS: 1
13. The internal auditor represents the interests of third-party outsiders.
ANS: F PTS: 1
14. Information Technology (IT) audits can be performed by both internal and external auditors.
ANS: T PTS: 1
15. Custom software is the most affordable systems development option.
ANS: F PTS: 1
16. A database is a collection of interconnected computers and communications devices that allows users to
communicate, access data and applications, and share information and resources.
ANS: F PTS: 1
17. Systems maintenance consumes the majority of a system’s total costs.
ANS: T PTS: 1
18. Cloud computing is a practice in which the organization sells its IT resources to a third-party outsourcing
vendor then leases back IT services from the vendor for a contract period.
ANS: F PTS: 1
19. A potential benefit of cloud computing is that the client firm does not need to know where its data are
bring processed.
ANS: F PTS: 1
20. One of the greatest disadvantages of database systems is that all data is always available to all users.
ANS: F PTS: 1
21. Under SOX legislation public accounting firms are no longer allowed to provide consulting services to
audit clients.
ANS: T PTS: 1
22. One member of a company’s audit committee must be an independent CPA.
2
, Test Bank For Accounting Information Systems
Chapter 1—The Information System: An Accountant’s Perspective
ANS: F PTS: 1
MULTIPLE CHOICE
1. Which of the following is not a business resource?
a. raw material
b. labor
c. information
d. all are business resources
ANS: D PTS: 1
2. Which level of management is responsible for short-term planning and coordination of activities
necessary to accomplish organizational objectives?
a. operations management
b. middle management
c. top management
d. line management
ANS: B PTS: 1
3. Which level of management is responsible for controlling day-to-day operations?
a. top management
b. middle management
c. operations management
d. executive management
ANS: C PTS: 1
4. Location-independent computing in which shared data centers deliver hosted IT services over the Internet.
a. IT outsourcing
b. Network administration
c. Cloud computing
d. Custom software
ANS: C PTS: 1
5. The value of information for users is determined by all of the following but
a. reliability
b. relevance
c. convenience
d. completeness
ANS: C PTS: 1
6. An example of a nonfinancial transaction is
a. sale of products
b. cash disbursement
c. log of customer calls
3
