Accounting Information Systems
Study Guide Questions
Course Introduction
Accounting Information Systems (AIS) explores the integration of accounting principles and information technology to facilitate the collection, storage, processing, and analysis of financial data. This course covers the design and implementation of accounting systems, internal controls, data security, and the use of accounting software in decision-making. Students will gain an understanding of how AIS supports business processes, enhances accuracy, and ensures compliance with regulatory standards, preparing them to evaluate and improve information systems within various organizational contexts.
Recommended Textbook
Cornerstones of Cost Accounting 1st Edition by Don R. Hansen
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20 Chapters
2433 Verified Questions
2433 Flashcards
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Page 2
Chapter 1: Introduction to Cost Management
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Sample Questions
Q1) The _______________ is the officer responsible for money management and serves chiefly as the custodian of the organization's funds.
A) Certified Public Accountant
B) controller
C) Chartered Accountant
D) treasurer
Answer: D
Q2) Comparing actual quality costs with planned quality costs is an example of A) planning.
B) controlling.
C) performance evaluation.
D) both b and c.
Answer: D
Q3) How has the nature of accounting systems shifted in response to technology?
Answer: ERP, DSS, and OLAP software have allowed firms to create one database that can be used for many purposes.Information is more accessible and can be used to provide much more effective planning, control, feedback, decision making, and continuous improvement.EDI has allowed the emergence of electronic commerce and supply chain management.
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Page 3
Chapter 2: Basic Cost Management Concepts
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Sample Questions
Q1) Which of the following items would be associated with both a functional-based cost accounting information system and an activity based cost information system?
A) Overhead is assigned on a plant-wide rate based on direct labor hours.
B) Customer service costs are assigned to products using number of complaints as the activity driver.
C) Direct labor cost is assigned to products using direct tracing.
D) None of these.
Answer: C
Q2) If beginning work-in-process inventory is $120,000, ending work-in-process inventory is $160,000, cost of goods manufactured is $400,000, and direct materials used are $100,000, what are the conversion costs?
A) $140,000
B) $280,000
C) $300,000
D) $340,000
Answer: D
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4
Chapter 3: Cost Behavior
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Sample Questions
Q1) Mixed costs, by definition, contain both
A) product and period costs.
B) fixed and variable costs.
C) direct and indirect costs.
D) controllable and noncontrollable costs.
Answer: B
Q2) If all the activity capacity acquired is not used, this is an example of A) practical capacity.
B) activity capacity.
C) unused capacity.
D) ideal capacity.
Answer: C
Q3) Refer to Figure 3-9.What is the cumulative average time per batch using the incremental unit-time learning curve for 2,000 units?
A) 180
B) 100
C) 90
D) 80
Answer: C
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Page 5
Chapter 4: Activity-Based Costing
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Sample Questions
Q1) Which of the following quantities is an example of an activity driver in activity-based costing?
A) number of setups
B) number of orders placed
C) number of machine hours
D) all of these
Q2) Refer to Figure 4-20.Determine the engineering costs assigned to model X using the two most expensive activities for cost pools.The costs of the two relatively inexpensive activities are allocated to the two most expensive activities in proportion to their costs.(Round to two decimal places.)The engineering cost assigned to model X would be
A) $313,330
B) $566,666.67
C) $1,566,666.67
D) $2,819,930
Q3) Refer to Figure 4-18.Machine-related overhead would be classified as a A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.
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Page 6
Chapter 5: Product and Service Costing: Job-Order System
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102 Flashcards
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Sample Questions
Q1) A debit to Materials Inventory indicates materials were
A) purchased.
B) requisitioned.
C) put into production.
D) ordered.
Q2) The principal difficulty with normal costing is that
A) the unit cost information is not received on a timely basis.
B) it can result in fluctuating per-unit overhead costs.
C) estimated overhead and estimated activity are likely to differ from actual overhead and actual costs, resulting in underapplied or overapplied overhead.
D) there is no difficulty associated with using normal costing.
Q3) _______________ is the average activity that a firm experiences in the long term (more than one year).
A) Expected activity level
B) Normal activity level
C) Theoretical activity level
D) Practical activity level
Q4) Why are firms reluctant to use actual costing? How does normal costing solve the problems?
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Chapter 6: Process Costing
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Sample Questions
Q1) When products and their costs are moved from one process to the next process, these costs are referred to as
A) unit costs.
B) transferred-in costs.
C) WIP inventory costs.
D) equivalent unit costs.
Q2) The appropriate cost accounting system to use when inventory items are produced on an assembly line is
A) job-order costing.
B) process costing.
C) weighted average.
D) perpetual method.
Q3) The material cost per equivalent unit using the weighted average method is calculated as
A) total material costs to account for/equivalent units for materials.
B) material costs added during the period/equivalent units for materials.
C) total material costs to account for/number of partially completed units for materials.
D) material costs added during the period/number of partially completed units for materials.
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Page 8
Chapter 7: Allocating Costs of Support Departments and Joint Products
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Sample Questions
Q1) _______________ are products with substantial value which are produced simultaneously by the same process up to a split-off point.
A) By-products
B) Joint products
C) Minor products
D) Both a and b
Q2) Which of the following industries would most likely have joint costs in production?
A) flour milling
B) dairy products
C) commercial fishing
D) all of these
Q3) Which of the following methods allocates joint production costs based on their proportionate share of eventual revenue less further processing costs?
A) sales-value-at-split-off method
B) net realizable value method
C) physical units method
D) replacement cost method
Q4) Compare and contrast the various methods of accounting for joint product costs.
Page 9
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Chapter 8: Budgeting for Planning and Control
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Sample Questions
Q1) Which of the following is NOT a key feature of an ideal budgetary system?
A) controllable costs
B) single measure for performance
C) incentives
D) frequent feedback
Q2) How many units of A1 does Gerald Company expect to use in production during the second month?
A) 12,000 units
B) 12,500 units
C) 10,000 units
D) 10,750 units
Q3) The budget committee
A) has the responsibility to review the budget.
B) resolves differences that may arise as the budget is prepared.
C) prepares financial statements for the auditor.
D) both a and b
Q4) Compare and contrast static budgets, flexible budgets, and activity-based budgets.
Q5) Discuss the features of an ideal budgetary process.
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Page 10
Chapter 9: Standard Costing: a Functional-Based Control Approach
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Sample Questions
Q1) A mix variance is
A) created whenever the actual mix of inputs differs from the standard mix.
B) the difference in the standard cost of the actual mix of inputs used and the standard cost of the mix of inputs that should have been used.
C) both 'a' and 'b' are correct.
D) none of these are correct.
Q2) Harry Company's standard variable overhead rate is $6 per direct labor hour, and each unit requires 2 standard direct labor hours.During March, Harry recorded 6,000 actual direct labor hours, $37,000 actual variable overhead costs, and 2,900 units of product manufactured. What is the total variable overhead variance for March for Harry?
A) $1,200 (U)
B) $600 (U)
C) $1,000 (U)
D) $2,200 (U)
Q3) How are standards developed? What is the difference between ideal and currently attainable standards?
Q4) Compare and contrast mix and yield variances.
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Chapter 10: Decentralization: Responsibility Accounting, Performance
Evaluation, and Transfer Pricing
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Sample Questions
Q1) Which of the following departments would NOT be classified as a profit center?
A) hardware department
B) men's shoes department
C) accounting department
D) automotive department
Q2) A manufacturing division of a company would most likely be evaluated as a(n)
A) cost center.
B) investment center.
C) revenue center.
D) asset center.
Q3) If the operating asset turnover ratio increased by 30 percent and the margin increased by 20 percent, the divisional ROI
A) would increase by 56 percent.
B) would decrease by 60 percent.
C) would increase by 20 percent.
D) cannot be determined.
Q4) What problems do owners face in encouraging goal congruence of managers? What is a stock option? How can stock options encourage goal congruence?
Q5) How are information, responsibility, and accountability related?
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Chapter 11: Strategic Cost Management
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Sample Questions
Q1) Which of the following is NOT a trait of a traditional manufacturing system?
A) push-through system
B) short-term supplier contracts
C) value-added focus
D) total quality control
Q2) The operational activity of moving inventory is classified as a A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.
Q3) The operational activity of inspecting is classified as a A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.
Q4) The operational activity of assembling parts is an example of a A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.
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Chapter 12: Activity-Based Management
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Sample Questions
Q1) Which of the following is NOT a common step in an ABM implementation model?
A) Systems planning
B) Assess Value Content of Activities
C) Identify, Define, and Classify Activities
D) All of these are common steps.
Q2) _______________ refer(s) to a global incentive that encourages employees to contribute to the overall financial well-being.
A) Bonuses
B) Demotion
C) Profit sharing
D) Gain sharing
Q3) Setup time for a product is 12 hours.A firm that uses JIT and produces the same product has reduced setup time by 1 hour.Setup labor is $20 per hour.If the company wants to reduce non-value-added costs by 40 percent next year, the currently attainable standard for setup time would be
A) 7.6 hours.
B) 7.2 hours.
C) 6.6 hours.
D) 4.8 hours.
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Page 14
Chapter 13: The Balanced Scorecard: Strategic-Based Control
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Sample Questions
Q1) A manufacturing cell has the theoretical capability of producing 40,000 microchips per quarter.The conversion cost per quarter is $25,000.There are 4,000 production hours available within the cell per quarter. The theoretical velocity per hour is
A) 25.00 units.
B) 16.00 units.
C) 10.00 units.
D) 2.24 units.
Q2) A testable strategy is defined as
A) a strategy that can be implemented.
B) a set of profit goals.
C) a set of linked objectives aimed at an overall goal.
D) a strategy that is verifiable.
Q3) Which of the following would NOT be an objective measure?
A) customer profitability
B) employee capabilities
C) return on investment
D) cost per unit
Q4) Compare and contrast activity-based measures and strategic-based measures.
Page 15
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Chapter 14: Quality and Environmental Cost Management
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157 Flashcards
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Sample Questions
Q1) Managers need quality cost information for which decisions?
A) strategic pricing
B) cost volume profit analysis
C) cost benefit of quality improvement programs
D) all of these
Q2) _______________ is a measure of how well a product meets its requirements or specifications.
A) Quality of conformance
B) Quality of design
C) Service quality
D) Taguchi quality loss function
Q3) Refer to Figure 14-5.For the current year, internal failure costs are what percentage of sales?
A) 9.30%
B) 5.00%
C) 2.50%
D) 7.50%
Q4) Define environmental costs and identify the four categories of environmental costs.Give an example of each category.
Q5) What does quality mean and how has improving quality increased firm value?
Page 16
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Chapter 15: Lean Accounting and Productivity Measurement
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Sample Questions
Q1) In calculating product costs for a value stream with multiple products, average product costs are a good estimate of individual product costs if
A) the products are similar and consume resources in approximately the same proportion.
B) the product mix is relatively stable.
C) the products are homogenous.
D) all of these.
Q2) Refer to Figure 16-2.What is the production rate?
A) 12 units per hour
B) 20 units per hour
C) 15 units per hour
D) 7.5 units per hour
Q3) Lean manufacturing benefits of better quality, reduced lead times, inventory reductions, and reduced setup times result in
A) lower manufacturing costs.
B) increased production rates.
C) reductions in innovative capabilities.
D) both a and b.
Q4) Explain the difference between technical and input trade-off efficiency.
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Chapter 16: Cost-Volume-Profit Analysis
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Sample Questions
Q1) The formula to determine the Y-axis value ($) at point D on the graph is
A) Fixed costs + (Variable costs per unit ´ Number of units).
B) SXY - bSX.
C) Fixed costs/Unit contribution margin.
D) Fixed costs/Contribution margin ratio.
Q2) The variable cost ratio
A) expresses variable costs as a percentage of total costs.
B) expresses the proportion between fixed costs and variable costs.
C) expresses variable cost in terms of sales dollars.
D) expresses the proportion of sales dollars available to cover fixed costs and provide for a profit.
Q3) A profit-volume graph
A) measures profit or loss on the horizontal axis.
B) illustrates total revenues, total cost, and profits at various sales volumes.
C) is not subject to the same limiting assumptions as cost-volume-profit graphs.
D) illustrates the relationship between volume and profits.
Q4) In the Cost-Volume-Profit analysis, what are two ways management can deal with risk and uncertainty?
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Page 18
Chapter 17: Activity Resource Usage Model and Tactical Decision Making
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Sample Questions
Q1) Upfront resource spending
A) is always relevant because it relates to the future.
B) is always relevant because it could reduce future costs.
C) is a sunk cost and therefore never relevant.
D) is always relevant because upfront resource spending will generate future revenues or benefits.
Q2) Refer to Figure 17-2.If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
A) $153,000 increase.
B) $45,000 increase.
C) $450,000 increase.
D) $90,000 decrease.
Q3) Which of the following costs is NOT relevant to a decision to sell a product at split-off or process the product further and then sell the product?
A) joint costs allocated to the product
B) the selling price of the product at split-off
C) the additional processing costs after split-off
D) the selling price of the product after further processing
Q4) What are relevant costs? How do they relate to decision making?
Page 19
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Chapter 18: Pricing and Profitability Analysis
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Sample Questions
Q1) The market share variance is calculated by
A) [(Actual industry sales in units - Budgeted industry sales in units) ´ (Budgeted market share percentage)] ´ (Budgeted average unit contribution margin).
B) [(Actual market share percentage - Budgeted market share percentage) ´ (Actual industry sales in units)] ´ (Budgeted average unit contribution margin).
C) (Actual quantity sold - Budgeted quantity sold) ´ Budgeted average unit contribution margin.
D) (Actual quantity sold - Budgeted quantity sold) ´ Actual average unit contribution margin.
Q2) What is the value of the ending inventory using the absorption costing method?
A) $240,000
B) $360,000
C) $600,000
D) $420,000
Q3) Compare and contrast the various pricing policies used by companies.
Q4) What are some of the pricing practices regulated by law?
Q5) Discuss the limitation of profit measurement.
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Page 20
Chapter 19: Capital Investment
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Sample
Questions
Q1) Jones Company is considering the purchase of a new machine for $57,000.The machine would generate an annual cash flow of $17,411 for five years.At the end of five years, the machine would have no salvage value.The company's cost of capital is 12 percent.The company uses straight-line depreciation with no mid-year convention. What is the internal rate of return for the machine rounded to the nearest percent, assuming no taxes are paid?
A) 12%
B) 18%
C) 14%
D) 16%
Q2) The system will cost $9,000,000 and will last ten years.The company's cost of capital is 12 percent.
What is the NPV for the computer-aided manufacturing system?
A) $9,000,000
B) $(525,000)
C) $(5,610,000)
D) $8,475,000
Q3) What are the differences that affect capital investment decisions regarding advanced technology and environmental considerations?
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Page 21
Chapter 20: Inventory Management: Economic Order
Quantity, Jit, and the Theory of Constraints
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Sample Questions
Q1) What is the constraint on labor hours for Tiffany Manufacturing Company?
A) 10X + 90Y £ 200
B) 1X + 2Y £ 400
C) 1X + 2Y £ 200
D) 1X + 4Y £ 400
Q2) JIT reduces lead times to meet delivery dates by
A) reducing setup times.
B) expediting delivery to customers.
C) having more inventory available.
D) working overtime to fill orders.
Q3) Which of the following is NOT an example of an ordering cost?
A) receiving costs
B) salespeople's salaries costs
C) clerical costs of preparing documents
D) insurance costs on shipment
Q4) The JIT approach to inventory management
A) allows greater flexibility as to when products can be manufactured.
B) results in higher inventory levels but reduces ordering and setup costs.
C) results in lower inventory carrying costs.
D) none of these.
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