Question 1

Identify the components of an accounting information system.

Accepted Answer

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Question 2

Define an accounting information system.

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Question 3

An AIS provides value by
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 A and B

Accepted Answer

An AIS provides value by improving products or services through information that increases quality and reduces costs, while also providing timely and reliable information to decision makers. Both of these functions are significant in providing value to an organization.

Question 4

When the AIS provides information in a timely and accurate manner,it stands as an example of
A)improved decision making.
B)improving the quality and reducing the costs of products or services.
C)improving efficiency.
D)all of the above

Accepted Answer

When an AIS provides timely and accurate information, it helps in making better decisions, improving product or service quality, and reducing costs. Additionally, it also enhances efficiency by automating routine tasks and reducing manual intervention. Therefore, option D, i.e., all of the above, is the best choice.

Question 5

The primary objective of accounting is to
A)implement strong internal controls.
B)provide useful information to decision makers.
C)prepare financial statements.
D)ensure the profitability of an organization.

Accepted Answer

The primary objective of accounting is to provide useful information to decision makers. While implementing strong internal controls, preparing financial statements, and ensuring the profitability of an organization are all important aspects of accounting, they are not the primary objective. The primary objective is to provide information that aids in decision making.

Question 6

Updating accounts receivable is part of which transaction cycle?
A)Human resources/payroll.
B)Expenditure.
C)Financing.
D)Revenue.

Accepted Answer

The updating of accounts receivable is part of the revenue transaction cycle, which involves the sale of goods or services and the collection of payment from customers. In this cycle, accounts receivable is recorded when a sale is made, and then updated as payments are received from customers.

Question 7

The AIS must include controls to ensure
A)safety and availability of data.
B)marketing initiatives match corporate goals.
C)information produced from data is accurate.
D)both A and C

Accepted Answer

The AIS must have controls to ensure the safety and availability of data, as well as ensuring the accuracy of information produced from the data. Marketing initiatives matching corporate goals may be important, but it is not directly related to the functions of an AIS.

Question 8

A good example of how an AIS is used to share knowledge within an organization is
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.

Accepted Answer

A corporate database that helps staff identify relevant experts within the organization is an example of using an AIS to share knowledge. This system allows employees to access information about colleagues' skills or expertise, making it easier to find the right person for a particular task and promoting collaboration and knowledge sharing within the organization. The other options (B, C, and D) do not necessarily involve sharing knowledge within an organization.

Question 9

Which of the following is not an example of a common activity in an AIS?
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

Accepted Answer

Recording sales calls for marketing purposes is not a common activity in an AIS. The other options (A, B, and C) are all examples of common activities in an AIS.

Question 10

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
A)the Certified Information Auditor.
B)the Certified Internal Auditor.
C)the Certified Information Technology Professional.
D)the Certified Data Processing Professional.

Accepted Answer

The AICPA formally created the designation known as the Certified Information Technology Professional (CITP) to recognize individual CPAs who have met educational and experiential requirements in the area of AIS and the major impact information technology has on the area of accounting. The other choices such as Certified Information Auditor, Certified Internal Auditor, and Certified Data Processing Professional are also certification programs but are not recognized by the AICPA specifically for the area of AIS and information technology.

Question 11

Who of the following would not be involved in the expenditure cycle?
A)Accounts payable clerk.
B)Receiving clerk.
C)Cashier.
D)Requisition manager.

Accepted Answer

The expenditure cycle involves activities related to the acquisition of and payment for goods and services. The cashier, involved in handling cash transactions, is typically not directly involved in these activities, which are more closely related to purchasing, receiving, and accounts payable functions.

Question 12

How are "Give and Take" transactions classified in business today and what impact does this have on AIS?

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Question 13

Explain what an AIS is,describe the basic tasks it performs in an organization,and give some examples of the types of accounting transactions it processes.

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Question 14

An accounting information system must be able to perform which of the following tasks?
A)collect transaction data
B)process transaction data
C)provide adequate controls
D)all of the above

Accepted Answer

An accounting information system must be able to collect transaction data, process transaction data, and provide adequate controls to ensure accurate financial reporting. Therefore, all of the above options are necessary functions of an accounting information system.

Question 15

Which of the following is not one of the components of an AIS?
A)internal controls and security measures
B)people
C)procedures and instructions
D)hardware

Accepted Answer

An Accounting Information System (AIS) primarily focuses on the collection, storage, and processing of financial and accounting data. While hardware is essential for the operation of an AIS, the core components specifically associated with AIS include internal controls and security measures, people, and procedures and instructions. Hardware falls under the broader category of IT infrastructure rather than being a component of AIS itself.

Question 16

Accounting information plays major roles in managerial decision making by
A)identifying situations requiring management action.
B)reducing uncertainty.
C)providing a basis for choosing among alternative actions.
D)all of the above

Accepted Answer

Accounting information not only identifies situations requiring management action but also helps reduce uncertainty and provides a basis for choosing among alternative actions. Therefore, all of the above options are correct.

Question 17

An accounting information system requires at least one computer.

Accepted Answer

An accounting information system (AIS) can be as simple as a manual system using ledgers and books; it does not necessarily require a computer.

Question 18

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.
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.

Accepted Answer

If an AIS provides too much information without any filtering or condensing, it can overwhelm decision makers and actually hinder their ability to make effective decisions. Too much information can lead to information overload, causing decision makers to miss important information or make decisions based on irrelevant information.

Question 19

Why have accounting software packages been designed with separate transaction modules?

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Question 20

Many modern accounting software packages offer separate transaction cycle modules.What is the reason for this?
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.

Accepted Answer

Different organizations have different needs and therefore not all organizations require all the available transaction cycle modules. Offering separate modules allows organizations to select and implement only the modules that are relevant to their business processes.

Quiz 1: Conceptual Foundations of Accounting Information Systems

Identify the components of an accounting information system.

Define an accounting information system.

An AIS provides value by

When the AIS provides information in a timely and accurate manner,it stands as an example of

The primary objective of accounting is to

Updating accounts receivable is part of which transaction cycle?

The AIS must include controls to ensure

A good example of how an AIS is used to share knowledge within an organization is

Which of the following is not an example of a common activity in an AIS?

Who of the following would not be involved in the expenditure cycle?

How are "Give and Take" transactions classified in business today and what impact does this have on AIS?

Explain what an AIS is,describe the basic tasks it performs in an organization,and give some examples of the types of accounting transactions it processes.

An accounting information system must be able to perform which of the following tasks?

Which of the following is not one of the components of an AIS?

Accounting information plays major roles in managerial decision making by

An accounting information system requires at least one computer.

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.

Why have accounting software packages been designed with separate transaction modules?

Many modern accounting software packages offer separate transaction cycle modules.What is the reason for this?