Deck 2: Foundational Concepts of the AIS

Question 1

When categorizing the accounting software market, a company with revenue of $8 million would most likely purchase software from which segment?

A)Small company
B)Midmarket
C)Beginning ERP
D)Tier 1 ERP

Answer 1

B

Question 2

Which of the following is not one of the general categories of business processes?

A)Revenue Processes
B)Inventory Processes
C)Expenditure Processes
D)Conversion Processes

Answer 2

B

Question 3

Which of the following statements is false?

A)Technology has allowed many industries to provide better, faster, and higher quality information.
B)Business process must adapt to the new technologies.
C)Business processes, IT systems, and the accounting information system are inextricably linked.
D)IT systems have not had a major impact on the input of data into the accounting information system.

Answer 3

D

Question 4

Which of the following correctly states the order of steps in a manual accounting system?

A)Source Documents, Journals, Ledgers, Reports
B)Journals, Source Documents, Ledgers, Reports
C)Source Documents, Ledgers, Journals, Reports
D)Ledgers, Reports, Journals, Source Documents

Question 5

Which of the following is not an advantage of cloud computing when compared to client-server computing?

A)It is more scalable.
B)It is less costly.
C)It increases the amount of computer infrastructure in a company.
D)It has expanded availability.

Question 6

A prescribed sequence of work steps completed in order to produced a desired result for an organization is the definition of:

A)Accounting information system
B)Business process
C)Business transaction
D)Financial statement

Question 7

In documenting systems, which pictorial method is described as a method that diagrams the actual flow and sequence of events?

A)Systems flowchart
B)Process map
C)Data flow diagram
D)Entity relationship diagram

Question 8

CMA Adapted) A company in Florida provides certified flight training programs for aspiring new pilots of small aircraft.Although awarding a pilot's license requires one-on-one flight time, there is also much preparatory training conducted in classroom settings.The company needs to create a conceptual data model for its classroom training program, using an entity-relationship diagram.The company provided the following information: Floridian Flight, Inc.has 10 instructors who can tach up to 30 pilot trainees per class.The company offers 10 different courses, and each course may generate up to eight classes.Identify the entities that should be included in the entity-relationship diagram:

A)Instructor, Floridian Flight Inc., Pilot Trainee
B)Instructor, Floridian Flight Inc., Course, Enrollment, Class
C)Floridian Flight Inc., Enrollment, Course, Class, Pilot Trainee
D)Instructor, Course, Enrollment, Class, Pilot Trainee
TEST BANK - CHAPTER 2 - MULTIPLE CHOICE

Question 9

Which of the following statements is not true?

A)Accounting information systems must maintain both detail and summary information.
B)Business processes may vary from company to company.
C)Regardless of the extent of computerization, all accounting information systems must capture data from the transactions within business processes.
D)Business processes categorized as expenditure processes are not intended to be processes that serve customers.

Question 10

When a transaction occurs there are systematic and defined steps that take place within the organization to complete all of the underlying tasks.These "defined steps" are referred to as:

A)Business Processes
B)Financial Transactions
C)Accounting Information Systems
D)Customer Service Arenas

Question 11

The system that captures, records, processes, and reports accounting information is referred to as an):

A)Accounting information system
B)Management information system.
C)System of business processes.
D)Client-server system.

Question 12

Which of the following statements, related to a business process, is not a true statement?

A)It has a well-defined beginning and end.
B)Usually takes a long-period of time to complete.
C)Occur so that the organization may serve its customers.
D)Is initiated by a particular kind of event.

Question 13

Which of the following is not a method of updating legacy systems?

A)Enterprise application integration
B)Backoffice ware
C)Screen scraper
D)Complete replacement

Question 14

The substance of an accounting information system includes:

A)Initiate an event
B)Steps taken to create a business process
C)Capturing, recording, processing and reporting accounting information
D)Selection of client-server computing

Question 15

Information captured by a system is generated by financial transactions:

A)Within the organization only.
B)Between an organization and its customers only.
C)Between an organization and its vendors only.
D)Within the organization and between an organization and its customers and vendors.

Question 16

When similar transactions are grouped together for a specified time for processing, it is called:

A)Online processing
B)Real-time processing
C)Batch processing
D)Group processing

Question 17

Which of the following is a disadvantage of purchased accounting software, compared with software developed in-house?

A)It is custom designed for that company.
B)It is less costly.
C)The implementation time is shorter.
D)There are fewer bugs.

Question 18

An IT system that uses touch-screen cash registers as an input method is called:

A)Electronic data interchange
B)E-business
C)Point-of-sale system
D)Source documents and keying

Question 19

IT systems have dramatically affected many aspects of business.Which of the following is not one of the changes?

A)Data input into accounting information systems.
B)The way that data is processed in the system.
C)The accounting information that is reported by the system.
D)The outputs of the system.

Question 20

Which of the following is not a disadvantage of maintaining legacy systems?

A)There are fewer programmers available to support and maintain legacy systems.
B)They contain invaluable historical data that may be difficult to integrate into newer systems.
C)Hardware or hardware parts may be unavailable for legacy systems.
D)It can be difficult to integrate various legacy systems into an integrated whole.

Question 21

Which of the following is one of the advantages of maintaining a legacy system?

A)The system often supports unique business processes not inherent in generic accounting software.
B)The system is complicated and takes time to learn and understand
C)The system focuses on source documents, journals, and ledgers.
D)The system is cheap to maintain.

Question 22

The record that captures the key data of a transaction is called:

A)Turnaround document
B)Ledger
C)Journal
D)Source document

Question 23

In order to organize the study of accounting information systems, the authors divided the systems in place into three categories.Which of the following is not one of those categories?

A)Manual Systems
B)Client-Server Systems
C)Legacy Systems
D)Integrated IT Systems

Question 24

An existing system within the organization that uses older technology is called an):

A)Manual system
B)Legacy system
C)Client-server system
D)Modern integrated system

Question 25

Which of the following is not one of the advantages of maintaining the legacy systems?

A)Legacy systems are inexpensive to maintain.
B)The system contains invaluable historical data that may be difficult to integrate into a new system.
C)The system is well supported and understood by existing personnel who are already trained to use the system.
D)The system has been customized to meet specific needs of the organization.

Question 26

Which of the following statements is true?

A)All accounting systems in use today are computerized systems.
B)All accounting systems, whether computerized or not, must capture data, process the data, and provide outputs
C)It is not necessary for an accounting system to maintain summary information if it maintains detail information.
D)The general ledger will be summarized and then posted to the subsidiary ledger.

Question 27

The book of original entry for any transaction not recorded in a special journal is the:

A)Special Ledger
B)General Ledger
C)General Journal
D)Subsidiary Journal

Question 28

Which of the following statements does not refer to a legacy system?

A)Includes source documents, journals, and ledgers.
B)Have been in place for many years.
C)Much time has been spent developing, maintaining, and customizing the system.
D)Often based on old or inadequate technology.

Question 29

Organizations are often reluctant to abandon their legacy systems because:

A)The system was customized to meet specific needs.
B)The process to replace the systems is inexpensive.
C)The time involved for replacement is minimal.
D)Information contained on the system is outdated.

Question 30

Special journals are created, or established, to record specific types of transactions.Which of the following is not one of the special journals?

A)Fixed Asset Journal
B)Cash Receipts Journal
C)Purchases Journal
D)Payroll Journal

Question 31

What time frame is required for a business processing system to be considered a "legacy system"?

A)30 years
B)10 years
C)20 years
D)None of the above

Question 32

Which of the following items is not one of the manual records in a manual accounting system?

A)Journals
B)Ledgers
C)Source Documents
D)Trial Balance

Question 33

A source document serves important functions in the accounting system.Which of the following is not one of those functions?

A)Provides the output data for financial reports
B)Serves as part of the permanent audit trail
C)Triggers beginning of business processes
D)Provides the input data to record the transaction

Question 34

Chapter 2 discusses the different approaches that can be used to enhance existing legacy systems.Which approach intends to consolidate, connect, and organize all of the computer applications, data, and business processes both legacy and new) into a seamlessly interfaced framework of system components?

A)Screen scrapers
B)Legacy replacement integration
C)Enterprise application integration
D)Resource management integration

Question 35

The purpose of this item is to maintain the detailed information regarding routine transactions, with an account established for each entity.

A)Purchases Journal
B)Subsidiary Ledger
C)General Journal
D)General Ledger

Question 36

The choice of accounting information system will depend on all of the following except:

A)The size of the organization
B)The philosophy of management
C)The ability of the company to capture information
D)The nature of its processes

Question 37

Which of the following is an example of a source document?

A)Purchase order
B)Employee time card
C)Cash receipts
D)All of the above are examples of source documents.

Question 38

Which of the following statements is true related to manual systems?

A)Few small organizations use computerized accounting systems.
B)Computerized systems often rely on some manual record keeping.
C)Most medium sized organizations rely on manual accounting systems.
D)When using a computerized system, it is not necessary to understand the manual system.

Question 39

Which of the following provides details for the entire set of accounts used in the organization's accounting systems?

A)General Ledger
B)Special Journal
C)Subsidiary Ledger
D)General Journal

Question 40

An output of the accounting system that can be used as an input in a different part of the accounting system is referred to as:

A)Round table document
B)Source document
C)Turnaround document
D)Financial report

Question 41

Instead of completely replacing their systems, organizations often try to use new technology to enhance existing systems.Which of the following is not one of the approaches taken by these organizations?

A)Enterprise application integration
B)Screen scrapers
C)Enterprise resource planning
D)Using interface bridges

Question 42

Which of the following is not a main characteristic of client-server system?

A)Client and server computer are networked together.
B)Individual parts of processing are shared between the server and the client.
C)The system appears to users to be one integrated whole.
D)The client does not participate in the processing or data manipulation.

Question 43

Which of the following statements is false related to client-server computing?

A)Tasks are assigned to either the server or the client based on the size of the task.
B)A large number of client-server applications are moving toward a web-based model.
C)The client is more efficient at manipulating subsets of data.
D)The server is more efficient in managing large databases.

Question 44

Client-server computing can be divided into two levels.These two levels are known as ___________ and ___________.

A)Distributed presentation; distributed application
B)Physical interface; graphical interface
C)Software as a Service SaaS); Database as a Service DaaS)
D)Database level; server level

Question 45

Which of the following is not one of the disadvantages of maintaining the legacy systems?

A)They become difficult to integrate when companies merge or acquire other companies.
B)They are often difficult to modify to make them web based.
C)They are well supported and understood by existing personnel.
D)They lack adequate, up-to-date supporting documentation.

Question 46

Which of the following statements is false?

A)When a modern, integrated system is purchased, they are often modified by the IT staff to meet the needs of the organization.
B)New programs sold by software development companies are not as user friendly as the legacy systems.
C)Purchased software has a lower cost, shorter implementation time, and fewer bugs.
D)The modern, integrated systems typically use the latest technology.

Question 47

The modern integrated systems discussed by the authors include different types of architectures or model.Which of the following is not one of those models?

A)Client-server model
B)Legacy accounting
C)Cloud computing
D)All of the listed are examples of the modern integrated systems.

Question 48

Which of the following is one of the disadvantages of maintaining the legacy systems?

A)Often support unique business processes not inherent in generic accounting software.
B)May not easily run on new hardware.
C)Contain invaluable historical data.
D)Existing personnel are already trained to use the system.

Question 49

In the context of cloud computing, what does scalability mean for a growing company?

A)Scalability allows a growing company to purchase new capacity incrementally from a cloud provider.
B)Scalability allows a growing company to offer its online services to a greater number of consumers at once.
C)Scalability allows a growing company to purchase more hardware to improve its cloud network
D)Scalability allows a growing company to gain the greatest return on capital of online investments.

Question 50

This type of computing means that there are two types of computers networked together to accomplish the application processing.

A)Cloud computing
B)IT-Software computing
C)Client-Server computing
D)Web-Server computing

Question 51

A company that wishes to buy cloud computing services enters into an agreement with a cloud computing provider.This agreement is called a:

A)Cloud Computing Contract CCC)
B)Service Level Agreement SLA)
C)Agency Contract for Corporations ACC)
D)Cloud Provider Agreement CPA)

Question 52

All of the following are disadvantages to a cloud-based system except:

A)Fewer manual controls over reporting transactions
B)Fewer IT employees would be needed to maintain the system
C)Increased risk of fraudulent activities
D)The system relies heavily on the functionality of the host server

Question 53

Frontware, which adds modern, user friendly screen interfaces to legacy systems are referred to as:

A)Turnaround software
B)Graphical user face
C)COBOL
D)Screen scrapers

Question 54

A set of processes, software and hardware tools, methodologies, and technologies to integrate software systems is referred to as:

A)Enterprise application integration
B)Client-server interface
C)Screen scrapers
D)Complete integration

Question 55

There are a number of cloud computing services, and one of those services is called SaaS.This acronym stands for:

A)Software as a Service
B)Systems at a Server
C)Server adding another System
D)Software as actual Services

Question 56

Which of the following is not an advantage to a cloud model of e-mail?

A)It may be accessed and read from any device you use.
B)You are not required to maintain e-mail software and data storage.
C)Costs associated with maintaining are higher but are more controllable.
D)Fewer IT employees would be needed.

Question 57

The advantage of client-server computing is:

A)PC clients perform as "smart" terminals that can accomplish some share of the process tasks.
B)The server is housed at the client's location and is maintained by the client.
C)The client PC works with the entire database, whereas the server works with only a portion of the client data.
D)Each of the parts - the client PC and the server - work separately and are viewed separately by the users.

Question 58

A use of enterprise application integration would include:

A)Bridge the legacy systems to the new hardware and software.
B)Intended to consolidate, connect, and organize all of the computer applications, data, and business processes.
C)Allow real-time exchange and management of all the critical information.
D)All of the listed items would be included.

Question 59

What common characteristic is shared by both online processing and real-time processing?

A)The transaction is processed immediately
B)Transactions are processed in smaller groups
C)Data output is available directly after the transaction takes place
D)Transactions are entered and processed individually

Question 60

Which of the following is not an example of cloud computing?

A)The current method that Apple now uses to manage iTunes.
B)Google's Gmail - e-mail software.
C)Purchasing songs from iTunes and downloading those songs onto your computer.
D)Email accounts such as Yahoo.

Question 61

In a manual accounting system, the processing of accounting information includes:

A)Recording in the ledger
B)Posting to the journal
C)Closing the necessary ledger accounts
D)Adjusting the journal

Question 62

Source documents are usually preprinted and sequentially prenumbered.Which of the following is not one of the reasons for this prenumbering and preprinting?

A)To have an established format to capture data.
B)To assure that there are no duplicate source documents.
C)To be sure that all of the documents have been recorded.
D)To be sure that all of the documents are accounted for.

Question 63

After the accounting information has been input into the accounting system, it must be processed.Process accounting data involves:

A)Source documents and keying
B)Bar codes and point of sale
C)Electronic data interchange and e-business
D)Calculations, classification, and summarization

Question 64

The letter UPC, when relating to bar codes, stands for:

A)United Price Code
B)Universal Product Code
C)Unity Product Cost
D)Ulterior Price Company

Question 65

Quickbooks and Peachtree would be part of which market segment of accounting software?

A)Small Segment
B)Midmarket Segment
C)Beginning ERP Segment
D)Legacy Segment

Question 66

An organization that has applications having large volumes of similar transactions that can be processed at regular intervals is best suited to use which method of processing?

A)Real-time processing
B)Point of sale processing
C)Batch processing
D)Sequential processing

Question 67

Bar codes can be used in a number of different instances for input:

A)Products that are sold
B)Identification of individuals
C)Track work in process
D)Prepare financial statements

Question 68

The inter-company, computer-to-computer transfer of business documents in a standard business format is referred to as:

A)Electronic Data Interchange
B)E-Business Document Identification
C)Earned Daily Interest
D)Electronic Document Idea

Question 69

When all similar transactions are grouped together for a specified time and then processed together as a group, the process is referred to as:

A)Grouped processing
B)Batch processing
C)Bound processing
D)Unit processing

Question 70

This method of input for AIS is considered to be time consuming and error prone due to the human effort required to write on some documents and to manually key in the data:

A)Bar Coding
B)Key Punching
C)Source Documents and Keying
D)Point of Sale Systems

Question 71

A method of using hardware and software that captures retail sales transactions by standard bar coding is referred to as:

A)Point of Sale System
B)COBOL System
C)Inventory Tracking System
D)UPC System

Question 72

There are a number of advantages to cloud computing.Which of the following is one of those advantages?

A)As a company grows, it can easily purchase new capacity from the cloud provider.
B)Once the software and data are stored in the cloud, it can be accessed by multiple devices from multiple locations.
C)The company has a reduced need for servers and data storage.
D)All of the above.

Question 73

Five different input methods were identified by the authors.Which of the following is one of those input methods?

A)EDI
B)ERP
C)EAI
D)EPS

Question 74

Databases that reside in the cloud are called Database as a Service DaaS).Sometimes the database is combined with an operating system and is referred to as:

A)Infrastructure as a Service
B)Platform as a Service
C)Cloud computing
D)Software as a Service

Question 75

The use of employee prepared time cards and the entering of the time worked by the payroll department is a good example of which type of input method for AIS?

A)EDI
B)Bar Coding
C)Point of Use System
D)Source Documents and Keying

Question 76

There were four market segments identified by the authors in chapter 2.Which of the following is not one of those segments?

A)Small Company Systems
B)Midmarket Company Systems
C)Legacy Company Systems
D)Beginning ERP Systems

Question 77

The major difference between EDI and e-business is:

A)EDI uses the internet and e-business uses dedicated networks.
B)EDI does not require the use of computers.
C)EDI uses dedicated networks and e-business uses the internet.
D)There is no difference between EDI and e-business.

Question 78

SAP and PeopleSoft are part of which market segment of accounting software?

A)Small Segment
B)Midmarket Segment
C)Beginning ERP Segment
D)Tier 1 ERP Segment

Question 79

A company with revenue of $50 million would be most likely to purchase software from which one of the four market segments?

A)Midmarket Segment
B)Beginning ERP Segment
C)Tier 1: ERP Segment
D)Integrated Segment

Question 80

A printed code consisting of a series of vertical, machine readable, rectangular bars and spaces, that vary in width and are arranged in a specific ways to represent letters and numbers are referred to as:

A)COBOL Coding
B)Bar Coding
C)Key Coding
D)EOS Coding