AIS Chapter 1
A change in the AIS that makes information more easily accessible and widely available within an organization is most likely to first influence the Question options: A) organizational culture. B) customer base. C) external financial statement users. D) production activity.
A
A good example of how an AIS is used to share knowledge within an organization is Question options: A) the use of a corporate database to help staff identify the relevant experts who can help with a particular client. B) the use of tablets to access a network for messaging worldwide. C) the monitoring of production equipment to watch for defects. D) the use of point-of-sale data to determine hot-selling items.
A
A well-designed AIS can improve the decision making in an organization. Identify the statement below that describes a situation where an AIS may actually inhibit effective decision making. Question options: A) An AIS provides to its users an abundance of information without any filtering or condensing of such information. B) An AIS identifies situations requiring management action. C) An AIS reduces uncertainty, and therefore accounting information can provide a basis for choosing among alternative courses of action. D) An AIS provides information about the results of previous decisions which provides decision makers with feedback that can be used in future decision making.
A
An accounting information system (AIS) processes ________ to provide users with ________. Question options: A) data; information B) data; transactions C) information; data D) data; benefits
A
Before a firm can identify the information needed to effectively manage a process, the firm must Question options: A) understand the process. B) hire programmers. C) purchase computers and/or workstations. D) obtain internet access.
A
Identify how firms use predictive analysis. Question options: A) to provide an educated guess regarding what is expected to occur in the near future B) to engage in data warehousing C) to engage in a low-cost strategy D) to design the most effective accounting information system
A
Identify the party below that is not internal to the firm. Question options: A) customer B) management C) employees D) CEO
A
Information is ________ when two knowledgeable people independently produce the same information. Question options: A) verifiable B) relevant C) reliable D) complete
A
Information that does not omit important aspects of the underlying events or activities that it measures is Question options: A) complete. B) accessible. C) relevant. D) timely.
A
Many modern accounting software packages offer separate transaction cycle modules. What is the reason for this? Question options: A) Every organization does not need to implement all of the available transaction cycle modules. B) Most businesses do not need the revenue cycle module as part of their AIS. C) The nature of a given transaction cycle is the same irrespective of the type of organization. D) A properly designed AIS does not use the concept of separate business transaction cycles to process transactions.
A
One group that relies on both the adequate collection and transformation of data for decision-making purposes for an organization is Question options: A) management. B) interested outsiders. C) competitors. D) the government.
A
Paid time-off policies, job descriptions, and procedures manuals are examples of information needed to support key decisions in what business process? Question options: A) hire and train employees B) acquire inventory C) sell merchandise D) collect payment from customers
A
Paying state payroll taxes is part of which transaction cycle? Question options: A) human resources/payroll B) expenditure C) financing D) revenue
A
The ________ is not a transaction cycle. Question options: A) general ledger and reporting cycle B) expenditure cycle C) revenue cycle D) human resources cycle
A
The process of creating value for customers is the result of nine activities that form a Question options: A) value chain. B) capitalist operation. C) profitable business. D) information system.
A
The transaction cycle approach yields efficiencies when processing of a large number of transactions because Question options: A) a large number of transactions within a given cycle can be categorized into a relatively small number of distinct types. B) transaction cycles are easier to computerize. C) the transaction cycle approach represents the natural order of business. D) transaction cycles are easy to understand.
A
The transaction cycle approach yields efficiency when processing of a large number of transactions because Question options: A) a large number of transactions within a given cycle can be categorized into a relatively small number of distinct types. B) transaction cycles are easier to computerize. C) the transaction cycle approach represents the natural order of business. D) transaction cycles are easy to understand.
A
The value chain concept is composed of two types of activities known as Question options: A) primary and support. B) primary and secondary. C) support and value. D) technology and support.
A
What is a key decision that needs to be made with regards to selling merchandise? Question options: A) which credit cards to accept B) which employees to hire C) which public accounting firm to employ D) how much capital to acquire
A
Which of the following is not an example of how an AIS adds value to an organization? Question options: A) All employees at a hospital can access and update patient records from any computer terminal in the hospital. B) A customer service representative can find a customer's account data, purchase history, payment history, and salesperson's name while on the phone with the customer, to resolve issues quickly. C) Suppliers are able to access sales data directly from the point-of-sale system of a retailer and deliver inventory automatically when needed. D) Client tax files are encrypted and made available on the CPA firm's network to any employee with an access code.
A
Who of the following is not a stakeholder with whom an accounting information system typically communicates directly? Question options: A) Wall Street industry analyst B) venture capitalist C) company that supplies raw materials D) company that purchases finished goods for resale to consumers
A
Who of the following would not be involved in the revenue cycle? Question options: A) accounts payable clerk B) customer C) cashier D) credit manager
A
How can query languages be used to help make better decisions? Question options: A) They can suggest a course of action. B) They can gather relevant data for decision making. C) They can help the decision maker to interpret results. D) They can model choose among alternative courses of action.
B
Identify the piece of information below that is typically needed to acquire inventory. Question options: A) job descriptions B) vendor performance C) market coverage D) capacity needs
B
Identify the primary reason that it is important for a firm to identify the AIS improvements likely to yield the greatest return. Question options: A) because business strategy directly influences AIS, but not information technology B) because most organizations have limited resources C) because a firm never wants to waste time addressing issues that are not urgent D) because it is expensive to improve accounting information systems
B
In which transaction cycle would information for inventory purchases be most likely to pass between internal and external accounting information systems? Question options: A) the revenue cycle B) the expenditure cycle C) the human resources / payroll cycle D) the financing cycle
B
Information is best described as Question options: A) raw facts about transactions. B) data that has been organized and processed so that it is meaningful to the user. C) facts that are useful when processed in a timely manner. D) the same thing as data.
B
Information that is free from error or bias and accurately represents the events or activities of the organization is Question options: A) relevant. B) reliable. C) verifiable. D) timely.
B
Inventory information is provided in real time by a firm's accounting information system. The accuracy of this information is questionable, however, since the production manager often reports stock outs of components that the system indicates are in stock. Which of the following characteristics of useful information is absent in the situation described above? Question options: A) relevant B) reliable C) complete D) timely E) understandable F) verifiable G) accessible
B
Obtaining financing from outside investors is part of which cycle? Question options: A) the revenue cycle B) the financing cycle C) the production cycle D) the payroll cycle
B
The primary objective of accounting is to Question options: A) implement strong internal controls. B) provide useful information to decision makers. C) prepare financial statements. D) ensure the profitability of an organization.
B
Transaction cycles can be summarized on a high level as "give-get" transactions. An example of "give-get" in the revenue cycle would be Question options: A) give cash, get goods. B) give goods, get cash. C) give cash, get labor. D) give cash, get cash.
B
Which of the following is not one of the three basic types of data about a specific sales transaction that should be captured by an Accounting Information System? Question options: A) name of the employee who completed the sale B) daily sales quota C) product sold D) date
B
Which of the following statements below shows the contrast between data and information? Question options: A) Data is the output of an AIS. B) Information is the primary output of an AIS. C) Data is more useful in decision making than information. D) Data and information are the same.
B
_______ are examples of activities that constitute inbound logistics Question options: A) Activities that transform inputs into final products or services B) Activities that consist of receiving, storing, and distributing the materials used as inputs by the organization to create goods and/or services it sells C) Activities that provide post-sale support to customers D) Activities that help customers to buy the organization's products or services
B
Arranging delivery of products to customers constitutes ________ in value chain analysis. Question options: A) shipping B) inbound logistics C) outbound logistics D) delivery
C
Identify a recent technological advance that provides an opportunity to gain a competitive advantage. Question options: A) CVVP analysis B) discounted cash flows C) predictive analysis D) economic order quantity (EOQ)
C
One activity within the value chain is research and development. This activity can be identified as a Question options: A) firm infrastructure activity. B) human resources activity. C) technology activity. D) purchasing activity.
C
The American Institute of Certified Public Accountants (AICPA) has recognized the importance of AIS and the major impact information technology has on the area of accounting. To recognize individual CPAs who have met educational and experiential requirements in this area, the group formally created the designation known as Question options: A) the Certified Information Auditor. B) the Certified Internal Auditor. C) the Certified Information Technology Professional. D) the Certified Data Processing Professional.
C
The value of information can best be determined by Question options: A) its usefulness to decision makers. B) its relevance to decision makers. C) the benefits associated with obtaining the information minus the cost of producing it. D) the extent to which it optimizes the value chain.
C
What is a key decision that needs to be made with regards to acquiring inventory? Question options: A) which credit cards to accept B) which employees to hire C) which vendors to use D) how much capital to acquire
C
________ information reduces uncertainty, improves decision makers' ability to make predictions, or confirms expectations. Question options: A) Timely B) Reliable C) Relevant D) Complete
C
Accounting information plays major roles in managerial decision making by Question options: A) identifying situations requiring management action. B) reducing uncertainty. C) providing a basis for choosing among alternative actions. D) All of these
D
An AIS provides value by Question options: A) improving products or services through information that increases quality and reduces costs. B) providing timely and reliable information to decision makers. C) creating new products. D) both improving products or services through information that increases quality and reduces costs and providing timely and reliable information to decision makers
D
An AIS that makes information more easily accessible and more widely available is likely to increase pressure for Question options: A) centralization and defined procedures. B) centralization and autonomy. C) decentralization and defined procedures. D) decentralization and autonomy.
D
Clemente Santiago has formed a business that sells carved gourmet coconuts. He has hired five employees. The most senior is Friday, who manages the carving process. Monday is the newest employee. She collects the coconuts. Tuesday takes calls from unhappy customers. Wednesday tosses finished coconuts into the sea, sending them to the wholesaler. Thursday sends smoke signals to the wholesaler extolling the virtues of the latest production run of nuts that are drifting across the bay. Which of the following functions in the value chain is Thursday performing? Question options: A) Inbound logistics B) Operations C) Outbound logistics D) Marketing and sales E) Service
D
Data must be converted into information to be considered useful and meaningful for decision making. There are six characteristics that make information both useful and meaningful. If information is free from error or bias and accurately represents the events or activities of the organization, it is representative of the characteristic of Question options: A) relevancy. B) timeliness. C) understandability. D) reliability.
D
Identify the party below that is not external to the firm. Question options: A) customer B) vendor C) government agencies D) CEO
D
Identify the piece of information below that is typically needed to acquire a building. Question options: A) job descriptions B) vendor performance C) market coverage D) capacity needs
D
In which transaction cycle would information for borrowing money be most likely to pass between internal and external accounting information systems? Question options: A) the revenue cycle B) the expenditure cycle C) the human resources / payroll cycle D) the financing cycle
D
The AIS must include controls to ensure Question options: A) safety and availability of data. B) marketing initiatives match corporate goals. C) information produced from data is accurate. D) both safety and availability of data and information produced from data is accurate
D
When the AIS provides information in a timely and accurate manner, it stands as an example of Question options: A) improved decision making. B) improving the quality and reducing the costs of products or services. C) improving efficiency. D) All of these
D
Which of the following is a primary activity in the value chain? Question options: A) infrastructure B) technology C) purchasing D) marketing and sales
D
Which of the following is not an example of a common activity in an AIS? Question options: A) buy and pay for goods and services B) sell goods and services and collect cash C) summarize and report results to interested parties D) record sales calls for marketing purposes
D
Which of the following is not one of the components of an AIS? Question options: A) internal controls and security measures B) people C) procedures and instructions D) hardware
D
Identify the false statement below. Question options: A) Retail stores do not have a production cycle. B) Financial institutions have installment-loan cycles. C) Every organization should implement every transaction cycle module. D) A service company does not have an inventory system.
E
Cheryl Metrejean has been the controller of Downtown Tires for 25 years. Ownership of the firm recently changed hands and the new owners are conducting an audit of the financial records. The audit has been unable to reproduce financial reports that were prepared by Ms. Metrejean. While there is no evidence of wrongdoing, the auditors are concerned that the discrepancies might contribute to poor decisions. Which of the following characteristics of useful information is absent in the situation described above? Question options: A) relevant B) reliable C) complete D) timely E) understandable F) verifiable G) accessible
F
A frantic Barney Rubble lost a large sale because he could not access the system to verify the inventory was in stock and ready to be shipped. Which of the following characteristics of useful information is absent in the situation described above? Question options: A) relevant B) reliable C) complete D) timely E) understandable F) verifiable G) accessible
G
