Accounting Information Systems Exam
Bank
Course Introduction
Accounting Information Systems explores the intersection of accounting and information technology, focusing on the design, implementation, and management of computerized systems that process financial data. The course covers the principles, concepts, and tools used to capture, process, store, and communicate accounting information to internal and external stakeholders. Students learn about transaction cycles, controls to ensure data accuracy and security, system documentation techniques, and the role of information systems in supporting decision-making and organizational objectives. Ethical considerations, emerging technologies, and the use of popular accounting software are also discussed to equip students with the practical knowledge required for modern accounting environments.
Recommended Textbook
Cost Accounting A Managerial Emphasis 14th Edition by Charles T. Horngren
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23 Chapters
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3902 Flashcards
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Chapter 1: The Accountants Role in the Organization
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Sample Questions
Q1) If there is an ethical conflict concerning your direct supervisor, when is it appropriate to contact authorities or individuals NOT employed by the organization?
A)when there is a personal conflict
B)when your supervisor is about to receive a bonus
C)when there is a clear violation of the law
D)when you are about to be terminated
Answer: C
Q2) The most important planning tool is a ________.
A)performance evaluation report
B)balanced scorecard
C)goal
D)budget
Answer: D
Q3) Staff management includes:
A)manufacturing managers
B)human-resource managers
C)purchasing managers
D)distribution managers
Answer: B
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Page 3
Chapter 2: An Introduction to Cost Terms and Purposes
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Sample Questions
Q1) Costs that are initially recorded as assets and expensed when sold are called:
A)period costs
B)inventoriable costs
C)variable costs
D)fixed costs
Answer: B
Q2) Cost objects include:
A)products
B)customers
C)departments
D)All of these answers are correct.
Answer: D
Q3) Merchandising companies purchase products and sell them to customers without changing their basic form.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Contribution margin and gross margin are terms that can be used interchangeably.
A)True
B)False Answer: False
Q2) Total revenues less total fixed costs equal the contribution margin.
A)True
B)False Answer: False
Q3) For every $25,000 of ticket packages sold, operating income will increase by:
A)$6,250
B)$12,500
C)$18,750
D)an indeterminable amount
Answer: A
Q4) A planned decrease in selling price would be expected to cause an increase in the quantity sold.
A)True
B)False Answer: True
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Chapter 4: Job Costing
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Sample Questions
Q1) The cost allocation base
A)is a grouping of individual indirect cost items.
B)are costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way.
C)is anything for which a measurement of costs is desired.
D)is a systematic way to link an indirect cost or group of indirect costs to cost objects.
Q2) For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system.
Required:
a. direct materials purchased
b. direct materials used
c. direct manufacturing labor
d. indirect manufacturing labor
e. finished goods control
f. cost of goods sold
Q3) Cost objects may be jobs, products, or customers.
A)True
B)False
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Chapter 5: Activity-Based Costing and Activity-Based Management
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Sample Questions
Q1) How much of correspondence costs will be assigned to Department B?
A)$800
B)$6,250
C)$25,000
D)$10,000
Q2) The total amount of indirect cost assigned to produce chess pieces using the traditional method is ________ the total amount assigned using ABC.
A)more than B)less than C)identical to
D)None of these answers are correct.
Q3) If total advertising expense of $300,000 is allocated on the basis of sales, the amount allocated to the Large Department would be:
A)$225,000
B)$90,000
C)$250,000
D)$50,000
Q4) Explain how traditional cost systems, using a single unit-level cost rate, may distort product costs.
7
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Chapter 6: Master Budget and Responsibility Accounting
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Sample Questions
Q1) What is the amount budgeted for cost of goods manufactured in 2012?
A)$2,040,000
B)$1,972,000
C)$2,312,000
D)$2,380,000
Q2) Which budget is NOT necessary to prepare the budgeted balance sheet?
A)cash budget
B)budgeted statement of cash flows
C)budgeted income statement
D)revenues budget
Q3) Financial planning software packages assist management with:
A)assigning responsibility to various levels of management
B)identifying the target customer
C)sensitivity analysis in their planning and budgeting activities
D)achieving greater commitment from lower management
Q4) If a cost is considered controllable, it indicates that all aspects of the cost are under the control of the manager of the responsibility center to which that cost is assigned.
A)True
B)False
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Chapter 7: Flexible Budgets, Direct-Cost Variances, and Management Control
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Sample Questions
Q1) Nonfinancial performance measures:
A)are usually used in combination with financial measures for control purposes
B)are used to evaluate overall cost efficiency
C)allow managers to make informed tradeoffs
D)are often the sole basis of a manager's performance evaluations
Q2) The sales-volume variance is:
A)$9,600 favorable
B)$2,400 unfavorable
C)$10,000 unfavorable
D)$12,000 favorable
Q3) A single variance:
A)signals the cause of a problem
B)should be evaluated in isolation from other variances
C)may be the result of many different problems
D)should be used for performance evaluation
Q4) A favorable variance should be ignored by management.
A)True
B)False
Page 9
Q5) Explain the difference between a static budget and a flexible budget. Explain what is meant by a static budget variance and a flexible budget variance.
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Chapter 8: Flexible Budgets, Overhead Cost Variances, and Management Control
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Sample Questions
Q1) What is the variable overhead spending variance?
A)$420 unfavorable
B)$600 favorable
C)$600 unfavorable
D)$780 favorable
Q2) A nonfinancial measure of performance evaluation is:
A)increased sales
B)reducing distribution costs
C)energy used per machine-hour
D)All of these answers are correct.
Q3) How is a budgeted fixed overhead cost rate calculated?
Q4) When machine-hours are used as a cost-allocation base, the item most likely to contribute to an unfavorable variable overhead efficiency variance is:
A)using more machine hours than budgeted
B)workers wastefully using variable overhead items
C)unused capacity
D)more units being produced than planned
Q5) Explain why there is no efficiency variance for fixed manufacturing overhead costs.
Q6) Explain why sales-volume variance could be helpful to managers.
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Chapter 9: Inventory Costing and Capacity Analysis
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Sample Questions
Q1) All of the following are examples of drawbacks of using absorption costing EXCEPT:
A)management has the ability to manipulate operating income via production schedules
B)manipulation of operating income may ultimately increase the company's costs incurred over the long run
C)operating income solely reflects income from the sale of units and excludes the effects of manipulating production schedules
D)decreasing maintenance activities and increasing production result in increased operating income
Q2) The gross-margin format of the income statement:
A)distinguishes between manufacturing and nonmanufacturing costs
B)distinguishes variable costs from fixed costs
C)is used with variable costing
D)calculates contribution margin
Q3) A manager can increase operating income by deferring maintenance beyond the current accounting period when absorption costing is used.
A)True
B)False
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11
Chapter 10: Determining How Costs Behave
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Sample Questions
Q1) Evidence of relationships and extreme observations are highlighted when costs and their cost drivers are plotted graphically.
A)True
B)False
Q2) When using the high-low method, the two observations used are the high and low observations of the:
A)cost driver
B)dependent variables
C)slope coefficient
D)residual term
Q3) A learning curve is a function:
A)that measures the decline in labor-hours per unit due to workers becoming better at a job
B)that increases at a greater rate as workers become more familiar with their tasks
C)where unit costs increase as productivity increases
D)that is linear
Q4) Simple regression is known as "simple" because it includes only one cost driver.
A)True
B)False
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Chapter 11: Decision Making and Relevant Information
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Sample Questions
Q1) Factors used to decide whether to outsource a part include:
A)the supplier's cost of direct materials
B)if the supplier is reliable
C)the original cost of equipment currently used for production of that part
D)past design costs used to develop the current composition of the part
Q2) In product-mix decisions:
A)always focus on maximizing total contribution margin
B)focus on the product with the greatest contribution margin per machine-hour
C)focus on the full costs of the product
D)never focus on the short-term, but include only long-term considerations
Q3) The cost NOT relevant for this decision is the:
A)acquisition cost of the Trail Blazer
B)acquisition cost of the Grand Cherokee
C)repairs to the Trail Blazer
D)annual operating costs of the Grand Cherokee
Q4) Historical costs are helpful:
A)for making future predictions
B)for decision making
C)because they are quantitative
D)None of these answers is correct.
Page 13
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Chapter 12: Pricing Decisions and Cost Management
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Sample Questions
Q1) A product's markup percentage needs to cover nonmanufacturing variable costs when the cost base is:
A)the full cost of the product
B)the variable cost of the product
C)variable manufacturing costs
D)All of these answers are correct.
Q2) What is the full cost of the product per unit?
A)$60
B)$180
C)$198
D)$66
Q3) All of the following are associated with target costing EXCEPT:
A)value engineering
B)the markup component
C)all value-chain business functions
D)cross-functional teams
Q4) Rework is an example of a value-added cost.
A)True
B)False
Q5) What is price discrimination, and when is it illegal?
Page 14
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Chapter 13: Strategy, Balanced Scorecard, and Strategic
Profitability Analysis
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Sample Questions
Q1) What is the cost effect of the growth component for conversion costs?
A)$12,500 U
B)Zero
C)$10,000 U
D)$10,000 F
Q2) Which component of strategy measures the changes in operating income attributed solely to an increase in the quantity of output between Year 1 and Year 2?
A)the growth component
B)the price-recovery component
C)the productivity component
D)the cost leadership component
Q3) ________ is an organization's ability to achieve low costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.
A)Strategy
B)Product differentiation
C)Cost leadership
D)The balanced scorecard
Q4) What are the four key perspectives in the balanced scorecard?
Page 15
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Chapter 14: Cost Allocation, Customer-Profitability Analysis, and Sales-Variance
Analysis
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Q1) ________ categorizes costs related to customers into different cost pools on the basis of either different classes of cost drivers or different degrees of difficulty in determining the cause-and-effect (or benefits-received)relationships.
A)Customer-profitability analysis
B)Customer revenues
C)Customer cost hierarchy
D)Price discounting
Q2) Corporate-sustaining costs are costs of activities to support individual customers, regardless of the number of units or batches of product delivered to the customer.
A)True
B)False
Q3) All of the following illustrate purposes for allocating costs to cost objects EXCEPT to:
A)provide information for economic decisions
B)motivate managers and employees
C)determine a selling price the market will bear
D)measure income and assets for reporting to external parties
Q4) What actions might be taken with an unprofitable customer?
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Chapter 15: Allocation of Support-Department Costs, Common
Costs, and Revenues
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Sample Questions
Q1) If a dual-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Operations Department? Assume budgeted usage is used to allocate fixed copying costs and actual usage is used to allocate variable copying costs.
A)$60,490
B)$59,890
C)$57,000
D)$56,400
Q2) The costs of unused capacity are highlighted when:
A)actual usage based allocations are used
B)budgeted usage allocations are used
C)practical capacity-based allocations are used
D)the dual-rate cost-allocation method allocates fixed costs based on actual usage
Q3) Using the direct method, what amount of Maintenance Department costs will be allocated to Department B?
A)$96,000
B)$128,000
C)$156,000
D)$192,000
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Chapter 16: Cost Allocation: Joint Products and Byproducts
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Sample Questions
Q1) Byproducts and main products are differentiated by the:
A)number of units per processing period
B)weight or volume of outputs per period
C)amount of total sales value
D)None of these answers is correct.
Q2) Physical measures such as weight or volume are the best indicator of the benefits received for allocating joint costs.
A)True
B)False
Q3) The net realizable value method:
A)allocates joint costs to joint products on the basis of a comparable physical measure at the splitoff point
B)allocates joint costs to joint products on the basis of the relative sales value at the splitoff point
C)allocates joint costs to joint products in a way that each product has an identical gross-margin percentage
D)allocates joint costs to joint products on the basis of relative NRV
Q4) List the reasons that the sales value at splitoff method of joint cost allocation should be used.
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Chapter 17: Process Costing
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Sample
Questions
Q1) A major advantage of the weighted-average process costing is that it provides managers with information about changes in the costs per unit from one period to the next.
A)True
B)False
Q2) In a process-costing system when goods move from department to department, the accounting for such transfers is relatively simple under:
A)standard costing
B)FIFO costing
C)weighted-average costing
D)operations costing
Q3) Managers find operation costing useful in cost management because it:
A)often results in profit maximization
B)results in cost minimization
C)captures the financial impact of the control of physical processes
D)All of these answers are correct.
Q4) What is the difference between a weighted-average method of process costing and a first-in, first-out method of process costing?
Q5) List and describe the five steps in process costing.
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Chapter 18: Spoilage, Rework, and Scrap
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Sample Questions
Q1) Companies calculate the units of abnormal spoilage and record the cost in the Loss from Abnormal Spoilage account, which appears as a separate line item in the income statement.
A)True
B)False
Q2) Harriet has been reviewing the accounting system for her company and she is very concerned about the accounting for spoilage. It appears that spoilage is accounted for only at the end of the processing cycle. While this concept is acceptable in general, Harriet believes that a better method can be found to properly account for the spoilage when it occurs. She believes that there must be something better than the weighted-average method of accounting for spoilage. She would like the company to use a method that provides closer tracking of the spoilage with the accounting for the spoilage.
Required:
Discuss the problems Harriet is having with the accounting system.
Q3) A company might consider all spoilage to be abnormal if it wants to pay serious attention to the problem.
A)True
B)False
Q4) What are the objectives in accounting for spoilage?
Page 20
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Chapter 19: Balanced Scorecard: Quality, Time, and the Theory
of Constraints
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Sample Questions
Q1) The two basic aspects of quality are quality of design and conformance quality. Define and give an example of each.
Q2) An important difference between financial measures of quality and nonfinancial measures of quality is that:
A)financial measures of quality tend to be useful indicators of future long-term performance, while nonfinancial measures have more of a short-term focus
B)nonfinancial measures of quality tend to be useful indicators of future long-term performance, while financial measures of quality have more of a short-term focus
C)nonfinancial measures are generally too subjective to have any long-term value
D)None of these answers is correct.
Q3) What is the total production per day if the change is made?
A)6400 units
B)800 units
C)880 units
D)1600 units
Q4) Warranty costs are an example of internal failure costs.
A)True
B)False
Page 21
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Chapter 20: Inventory Management, Just-In-Time, and Simplified Costing Methods
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Q1) All of the following are potential financial benefits of just-in-time EXCEPT:
A)lower investments in inventories
B)lower investments in plant space for inventories
C)reducing the risk of obsolescence
D)reducing manufacturing lead time
Q2) An Enterprise Resource Planning (ERP)System comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities.
A)True
B)False
Q3) The opportunity cost of the stockout includes lost contribution margin on the sale NOT made plus any contribution margin lost on future sales due to customer ill will.
A)True
B)False
Q4) The annual relevant carrying costs of inventory consist of incremental costs plus the opportunity cost of capital.
A)True
B)False
Q5) What are five features of a just-in-time manufacturing system?
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Chapter 21: Capital Budgeting and Cost Analysis
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Sample Questions
Q1) The nominal approach to incorporating inflation into the net present value method predicts cash inflows in real monetary units and uses a real rate as the required rate of return.
A)True
B)False
Q2) Discounted cash flow methods focus on operating income.
A)True
B)False
Q3) The accrual accounting rate-of-return method is similar to the internal rate-of-return method because both methods calculate a rate-of-return percentage.
A)True
B)False
Q4) The minimum annual acceptable rate of return on an investment is the:
A)accrual accounting rate of return
B)hurdle rate
C)internal rate of return
D)net present value
Q5) Explain capital budgeting and then briefly discuss each of the five stages of a capital budgeting project?
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Chapter 22: Management Control Systems, Transfer
Pricing, and Multinational
Considerations
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Sample Questions
Q1) When an industry has excess capacity, market prices may drop well below their historical average. If this drop is temporary, it is called:
A)distress prices
B)dropped prices
C)low-average prices
D)substitute prices
Q2) The president of Silicon Company has just returned from a week of professional development courses and is very excited that she will not have to change the organization from a centralized structure to a decentralized structure just to have responsibility centers. However, she is somewhat confused about how responsibility centers relate to centralized organizations where a few managers have most of the authority.
Required:
Explain how a centralized organization might allow for responsibility centers.
Q3) An important advantage of decentralized operations is that it improves corporate control.
A)True
B)False
Q4) Briefly explain each of the three methods used to determine a transfer price.
Page 24
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Chapter 23: Performance Measurement, Compensation, and Multinational Considerations
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Sample Questions
Q1) What is the Tiller Division's investment turnover?
A).50
B).833
C)1.2
D)1.5
Q2) Customer-satisfaction measures are an example of the:
A)goal-congruence approach
B)balanced scorecard approach
C)financial report scorecard approach
D)investment success approach
Q3) Which of the following statements about designing an accounting-based performance measure is FALSE?
A)The steps may be followed in a random order.
B)The issues considered in each step are independent.
C)Management's beliefs are present during the analyses.
D)Behavioral criteria are important when evaluating the steps.
Q4) Designing an accounting based performance measure requires six steps. List each step. For three of the steps, describe a question that must be resolved as part of the implementation process.
25
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