Solution manual for
Accounting
information systems
4th edition
[Document subtitle]
Vernon J ,Richardson ….ALL chapters covered ANSWERSHEET
[COMPANY NAME] [Company address]
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
TESTBANK 2025
Chapter 1: Accounting Information Systems and Firm Value
Multiple Choice Questions
1. (LO 1-1) Accounting information systems
a. are always computerized.
b. report only financially related information.
c. are information systems that record, process, and report on
transactions to provide financial and nonfinancial information
for decision making and control.
d. require a CITP designation to understand.
Answer: C
2. (LO 1-1) Which of the following is a characteristic of relevance?
a. Materiality
b. Timeliness
c. Verifiable
d. Cost to
generate Answer: A
3. (LO 1-2) Which of the following is considered to be mandatory
information required by a regulatory body?
a. 10-Q submission to the Securities and Exchange Commission
b. The cost to produce a Samsung Galaxy
c. The number of organic bananas that are sold at Whole Foods on July 28
d. The cost to build an all-new Starbucks restaurant in
Shenzhen, China Answer: A
4. (LO 1-4) The correct order of events in the value chain is
a. Inbound logistics ➛ Operations ➛ Service.
b. Inbound logistics ➛ Outbound logistics ➛ Marketing and sales.
c. Inbound logistics ➛ Operations ➛ Outbound logistics.
d. Inbound logistics ➛ Operations ➛ Marketing and Sales.
Answer: C
1
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
5. (LO 1-8) Which system contributes information on direct labor to a cost accounting
system?
a. Supply chain management system (SCMS)
b. Financial reporting system (FRS)
c. Customer Relational Management System (CRM)
2
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
d. Human resource management
system (HRMS) Answer: D
6. (LO 1-7) A supply chain
a. supplies jewelry chains.
b. refers to the flow of materials, information, payments, and services.
c. is similar in function and purpose to the value chain.
d. does not apply to a service firm like an accounting firm.
Answer: B
7. (LO 1-7) Customer relationship management software does not include information
about
a. current customers.
b. prospective customers.
c. former customers.
d. current employees.
Answer: D
8. (LO 1-6) An information system that measures and records
accounting transactions and reports them in the financial
statements is called a
a. financial reporting system (FRS).
b. enterprise system (ES).
c. manufacturing system (MS).
d. cost accounting system.
Answer: A
9. (LO 1-3) What is the name of the position for a person
responsible for determining Information needs of a business
and designing a system to meet those needs?
a. Chief information officer
b. Controller
c. IT auditor
d. Systems
3
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
analyst Answer: D
10. (LO 1-9) The balance sheet account most likely affected by an AIS
investment in supply chain management software would be
a. inventories.
b. fixed assets.
c. cash and cash equivalents.
4
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
d. unearned revenue.
Answer: A
11. (LO 1-7) The software/system that helps make sure the retail firm doesn’t have a
stockout is
a. supply chain management software.
b. customer relationship management software.
c. enterprise systems.
d. human resource systems.
Answer: A
12. (LO 1-9) Data analytics performed to identify the most
profitable customers would be most likely to affect which income
statement account?
a. Selling, general, and administrative expenses (SG&A)
b. Interest expense
c. Revenues
d. Cost of goods
sold Answer: C
13. (LO 1-7, LO 1-9) Customer relationship management systems would
generally be considered to be an
a. internal business process.
b. external business process.
c. interior business process.
d. exterior business process.
Answer: B
14. (LO 1-3) An auditor testing internal controls would generally be
considered to fill which role with respect to accounting information
systems?
a. User
b. Manager
c. Designer
5
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
d. Evalua
tor Answer: D
15. (LO 1-2) Which of these represents the proper transformation
from data to decision according to the information value chain?
a. Data ➛ Information ➛ Knowledge ➛ Decision
b. Data ➛ Knowledge ➛ Information ➛ Decision
6
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
c. Data ➛ Business event ➛ Information ➛ Decision
d. Data ➛ Analysis ➛ Information
➛ Decision Answer: A
Discussion Questions
1. Brainstorm a list of discretionary information that might be an
output of an accounting information system and be needed by
Starbucks. Prioritize which items might be most important and
provide support.
Answers will vary. Here are some potential answers:
The cost of a cup of coffee, by type: Breakfast blend, Cafe estima, caffe
Verona, espresso roast, Ethiopia sidamo, French roast, Gold Coast
blend, Guatemala Antigua, house blend, Italian roast, Kenya coffee,
komodo dragon blend, organic Serena blend, organic shade grown
Mexico, Sumatra, decaf caffe Verona, decaf espresso roast, decaf house
blend, and decaf Sumatra!
Monthly Sales per square foot of retail
space. Employee cost for each
operating hour.
Advertising expenditures per dollar of sales.
The cost of condiments per dollar sales of coffee. Condiments might
include sweeteners, liquid creamers, cream canisters, sugar packets,
sugar canisters, stir sticks!
The cost of electricity per operating hour each month of the year.
2. Explain the information value chain. How do business events turn into
data then into information and then into knowledge? Give an example
7
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
starting with the business event of the purchase of a Super Smash Bros.
Nintendo Switch Game at GameStop all the way to giving useful
information for the CEO and other decision makers.
The information value chain represents the overall transformation from
a business need and business event (like each individual sale of U.S.
flag) to an ultimate decision. The information value chain might be
represented considering the purchase of a Nintendo Switch Game at Best
Buy in the following way:
The game will be recorded as sales revenue and then after deducting its
costs will add to or subtract from corporate income. The cash from the
game sale will also add to the operating cash flows.
8
Accounting
information systems
4th edition
[Document subtitle]
Vernon J ,Richardson ….ALL chapters covered ANSWERSHEET
[COMPANY NAME] [Company address]
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
TESTBANK 2025
Chapter 1: Accounting Information Systems and Firm Value
Multiple Choice Questions
1. (LO 1-1) Accounting information systems
a. are always computerized.
b. report only financially related information.
c. are information systems that record, process, and report on
transactions to provide financial and nonfinancial information
for decision making and control.
d. require a CITP designation to understand.
Answer: C
2. (LO 1-1) Which of the following is a characteristic of relevance?
a. Materiality
b. Timeliness
c. Verifiable
d. Cost to
generate Answer: A
3. (LO 1-2) Which of the following is considered to be mandatory
information required by a regulatory body?
a. 10-Q submission to the Securities and Exchange Commission
b. The cost to produce a Samsung Galaxy
c. The number of organic bananas that are sold at Whole Foods on July 28
d. The cost to build an all-new Starbucks restaurant in
Shenzhen, China Answer: A
4. (LO 1-4) The correct order of events in the value chain is
a. Inbound logistics ➛ Operations ➛ Service.
b. Inbound logistics ➛ Outbound logistics ➛ Marketing and sales.
c. Inbound logistics ➛ Operations ➛ Outbound logistics.
d. Inbound logistics ➛ Operations ➛ Marketing and Sales.
Answer: C
1
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
5. (LO 1-8) Which system contributes information on direct labor to a cost accounting
system?
a. Supply chain management system (SCMS)
b. Financial reporting system (FRS)
c. Customer Relational Management System (CRM)
2
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
d. Human resource management
system (HRMS) Answer: D
6. (LO 1-7) A supply chain
a. supplies jewelry chains.
b. refers to the flow of materials, information, payments, and services.
c. is similar in function and purpose to the value chain.
d. does not apply to a service firm like an accounting firm.
Answer: B
7. (LO 1-7) Customer relationship management software does not include information
about
a. current customers.
b. prospective customers.
c. former customers.
d. current employees.
Answer: D
8. (LO 1-6) An information system that measures and records
accounting transactions and reports them in the financial
statements is called a
a. financial reporting system (FRS).
b. enterprise system (ES).
c. manufacturing system (MS).
d. cost accounting system.
Answer: A
9. (LO 1-3) What is the name of the position for a person
responsible for determining Information needs of a business
and designing a system to meet those needs?
a. Chief information officer
b. Controller
c. IT auditor
d. Systems
3
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
analyst Answer: D
10. (LO 1-9) The balance sheet account most likely affected by an AIS
investment in supply chain management software would be
a. inventories.
b. fixed assets.
c. cash and cash equivalents.
4
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
d. unearned revenue.
Answer: A
11. (LO 1-7) The software/system that helps make sure the retail firm doesn’t have a
stockout is
a. supply chain management software.
b. customer relationship management software.
c. enterprise systems.
d. human resource systems.
Answer: A
12. (LO 1-9) Data analytics performed to identify the most
profitable customers would be most likely to affect which income
statement account?
a. Selling, general, and administrative expenses (SG&A)
b. Interest expense
c. Revenues
d. Cost of goods
sold Answer: C
13. (LO 1-7, LO 1-9) Customer relationship management systems would
generally be considered to be an
a. internal business process.
b. external business process.
c. interior business process.
d. exterior business process.
Answer: B
14. (LO 1-3) An auditor testing internal controls would generally be
considered to fill which role with respect to accounting information
systems?
a. User
b. Manager
c. Designer
5
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
d. Evalua
tor Answer: D
15. (LO 1-2) Which of these represents the proper transformation
from data to decision according to the information value chain?
a. Data ➛ Information ➛ Knowledge ➛ Decision
b. Data ➛ Knowledge ➛ Information ➛ Decision
6
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
c. Data ➛ Business event ➛ Information ➛ Decision
d. Data ➛ Analysis ➛ Information
➛ Decision Answer: A
Discussion Questions
1. Brainstorm a list of discretionary information that might be an
output of an accounting information system and be needed by
Starbucks. Prioritize which items might be most important and
provide support.
Answers will vary. Here are some potential answers:
The cost of a cup of coffee, by type: Breakfast blend, Cafe estima, caffe
Verona, espresso roast, Ethiopia sidamo, French roast, Gold Coast
blend, Guatemala Antigua, house blend, Italian roast, Kenya coffee,
komodo dragon blend, organic Serena blend, organic shade grown
Mexico, Sumatra, decaf caffe Verona, decaf espresso roast, decaf house
blend, and decaf Sumatra!
Monthly Sales per square foot of retail
space. Employee cost for each
operating hour.
Advertising expenditures per dollar of sales.
The cost of condiments per dollar sales of coffee. Condiments might
include sweeteners, liquid creamers, cream canisters, sugar packets,
sugar canisters, stir sticks!
The cost of electricity per operating hour each month of the year.
2. Explain the information value chain. How do business events turn into
data then into information and then into knowledge? Give an example
7
, End of Chapter Solutions Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition
starting with the business event of the purchase of a Super Smash Bros.
Nintendo Switch Game at GameStop all the way to giving useful
information for the CEO and other decision makers.
The information value chain represents the overall transformation from
a business need and business event (like each individual sale of U.S.
flag) to an ultimate decision. The information value chain might be
represented considering the purchase of a Nintendo Switch Game at Best
Buy in the following way:
The game will be recorded as sales revenue and then after deducting its
costs will add to or subtract from corporate income. The cash from the
game sale will also add to the operating cash flows.
8
