Accounting Information Systems
Test Bank
Course Introduction
Accounting Information Systems explores the intersection of accounting principles, information technology, and business processes. The course examines how organizations collect, process, store, and report financial information using computerized systems. Students will learn about system design, internal controls, security measures, and the role of AIS in supporting managerial decision-making and external reporting. Topics include system documentation techniques, transaction processing cycles, database management, fraud prevention, and the evaluation and implementation of accounting software. The course prepares students to understand and manage the technological infrastructure that supports modern accounting functions.
Recommended Textbook
Accounting Information Systems 11th Edition by Marshall B. Romney Paul J. Steinbart
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Page 2
Chapter 1: Accounting Information Systems
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Q1) Decisions about the effective and efficient execution of specific tasks are concerned with
A)operational control.
B)management control.
C)strategic planning.
D)tactical planning.
Answer: A
Q2) The primary consideration when producing this type of information is that its benefits exceeds its costs.
A)Discretionary information
B)Essential information
C)Mandatory information
D)Value of information
Answer: A
Q3) 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
Answer: D
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Chapter 2: Overview of Business Processes
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Q1) Source documents are usually generated in the process of conducting common business activities.Name a source document connected with the human resources cycle.
Answer: Human resources (or payroll)cycle documents include employee's W-4 form,time cards,or job time tickets or time sheets.
Q2) Concerning processing,which of the following statements is true?
A)Batch processing ensures that stored information is always current.
B)Batch input is more accurate than on-line data entry.
C)On-line batch processing is a combination of real-time and batch processing.
D)Batch processing is almost never used.
Answer: C
Q3) A typical source document could be
A)in some paper form.
B)a computer data entry screen.
C)a notepad entry.
D)both A and B
Answer: D
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4
Chapter 3: Systems Development and Documentation Techniques
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Q1) Which symbol would be used in a flowchart to represent a connection to another part of the flowchart on the same page?
A)#4
B)#13
C)#14
D)#15
Answer: C
Q2) P 69 63)Identify five important guidelines for drawing a DFD.Select one from your list and describe why it could be the most important one to consider when preparing a DFD.(Hint: You may want to support your argument with an example.)
Answer: Understand the system.Ignore certain aspects of the system (such as control processes and control actions).Determine system boundaries.Develop a context diagram.Identify data flows.Group data flows.Identify transformation processes.Group transformation processes.Identify all files or data stores.Identify all data sources and destinations.All DFD elements are named.Subdivide the DFD.Give each process a sequential number.Repeat the process.Prepare a final copy.(Student answers will vary depending on the items chosen and the quality of their argument.The text provides various items that could be used to answer this question.)
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Chapter 4: Relational Databases
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Q1) The potential inconsistency problem could arise when there are multiple occurrences of a data item in a database.This is called the
A)update anomaly.
B)insert anomaly.
C)inconsistency anomaly.
D)integrity anomaly.
Q2) Discuss the ways in which a well-designed DBMS will facilitate the three basic functions of creating,changing,and querying data.
Q3) The data dictionary usually is maintained
A)automatically by the DBMS.
B)by the database administrator.
C)by the database programmers.
D)by top management.
Q4) All of the following are benefits of database technology except:
A)Data integration and sharing
B)Decentralized management of data
C)Minimal data redundancy
D)Reporting flexibility
Q5) List the four languages used within a DBMS.
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Chapter 5: Computer Fraud and Security
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Q1) I work in the information technology department of a company I'll call CMV.On Wednesday morning,I arrived at work,scanned in my identity card and punched in my code,when this guy in a delivery uniform came up behind me carrying a bunch of boxes.I opened the door for him,he nodded and grunted and went on in.I didn't think anything of it until later.Then I wondered if he might have been
A)typosquatting.
B)piggybacking.
C)posing.
D)spoofing.
Q2) During a routine audit,a review of cash receipts and related accounting entries revealed discrepancies.Upon further analysis,it was found that figures had been entered correctly and then subsequently changed,with the difference diverted to a fictitious customer account.This is an example of A)kiting.
B)data diddling.
C)data leakage.
D)phreaking.
Q3) Why do fraudulent acts often go unreported and are therefore not prosecuted?
Q4) What is a computer fraud?
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Chapter 6: Control and Accounting Information Systems
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Q1) The stock exchange or FASB is best described as external influences that directly affect an organization's
A)hiring practices
B)philosophy and operating style
C)internal environment
D)methods of assigning authority
Q2) Regarding project development and acquisition controls,a ________ shows how a project will be completed,including tasks and who will perform them as well as a timeline and cost estimates.
A)Performance evaluation
B)Project development plan
C)Steering committee
D)Strategic master plan
Q3) What are the three functions of internal controls?
Q4) Management can authorize employees to handle routine transactions without special approval.This is known as
A)Authorization
B)General authorization
C)Special authorization
D)Specific authorization
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Chapter 7: Infromation System Controls for Systems
Reliability
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Q1) The ___________ disseminates information about fraud,errors,breaches and other improper system uses and their consequences.
A)Chief information officer
B)Chief operations officer
C)Chief security officer
D)Computer emergency response team
Q2) Compatibility tests utilize a(n)__________,which is a list of authorized users,programs,and data files the users are authorized to access or manipulate.
A)validity test
B)biometric matrix
C)logical control matrix
D)access control matrix
Q3) Which of the following is an example of a corrective control?
A)Physical access controls
B)Encryption
C)Intrusion detection
D)Emergency response teams
Q4) What are the problems with symmetric encryption?
Q5) Describe four requirements of effective passwords
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Chapter 8: Auditing Computer-Based Information Systems
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Q1) The system and the receiving unit calculate a summary statistic and compare it.
A)Echo check
B)Numbered batches
C)Parity check
D)Trailer record
Q2) This determines if the characters in a field are of the proper type.
A)Field check
B)Limit check
C)Range check
D)Reasonableness test
Q3) Visual scanning is an example of
A)Data entry controls
B)Output controls
C)Processing controls
D)Source data controls
Q4) Identify four useful procedures for controlling access to system outputs.
Q5) Identify a fundamental control procedure for protecting that confidentiality of sensitive information.
Q6) Identify the 10 internationally recognized best practices for protecting the privacy of customers' personal information.
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Chapter 9: Auditing Computer-Based Informtion Systems
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Q1) The __________ part of the auditing process involves (among other things)the auditors observing the operating activities and having discussion with employees.
A)audit planning
B)collection of audit evidence
C)communication of audit results
D)evaluation of audit evidence
Q2) The purpose of __________ is to determine why,how,when,and who will perform the audit.
A)audit planning
B)the collection of audit evidence
C)the communication of audit results
D)the evaluation of audit evidence
Q3) The __________ audit is concerned with the economical and efficient use of resources and the accomplishment of established goals and objectives.
A)financial
B)informational
C)information systems
D)operational
Q4) What is the risk-based audit approach?
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Chapter 10: The Revenue Cycle: Sales an Cash Collections
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Q1) One applicable control procedure is to separate the shipping and billing functions within an organization.This control feature is designed to neutralize the threat of A)the failure to bill customers.
B)billing errors.
C)loss of data.
D)poor performance.
Q2) The maximum allowable account balance for a given customer is called the A)credit checkpoint.
B)credit limit.
C)reorder point.
D)backorder point.
Q3) Once a customer order has been approved,which document is produced next?
A)the sales invoice
B)the packing slip
C)the remittance advice
D)the purchase order
Q4) What is a CRM system?
Q5) Name and briefly define the two types of accounts receivable systems.
Q6) Why is credit approval an important part of the revenue cycle?
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Chapter 11: The Expenditure Cycle: Purchasing and Cash
Disbursements
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Q1) A standing order to purchase specified items at a designated price,from a particular supplier for a set period of time,is called a
A)set order.
B)blanket purchase order.
C)purchase order.
D)commodity order.
Q2) Which of the following is generally not shown on a receiving report?
A)price of the items
B)quantity of the items
C)purchase order number
D)counted and inspected by
Q3) Bob Chum is the sales manager at Folding Squid Technologies.At lunch with the company CEO,he proudly announced that he had negotiated a ______ with a client that defined a long-term commitment to buy components from Folding Squid.
A)purchase order
B)blanket purchase order
C)receiving report
D)debit memo
E)credit memo
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Chapter 12: The Production Cycle
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Q1) The use of various forms of information technology in the production process is referred to as
A)computerized investments and machines.
B)computerized integration of machines.
C)computer-integrated manufacturing.
D)computer intense manufacturing.
Q2) An AIS should be designed to provide timely and accurate information about production cycle activities that impact the other business cycles.One type of information deals with planning and controlling manufacturing costs and evaluating performance.This type of information is called
A)product mix.
B)product pricing.
C)resource allocation.
D)cost management.
Q3) The expenses associated with a product recall are ______ costs.
A)prevention
B)inspection
C)internal failure
D)external failure
Q4) What is a master production schedule (MPS)?
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Chapter 13: The Human Resources Managementpayroll Cycle
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Q1) Which area provides information to the system about hiring,terminations,and pay rate changes?
A)payroll
B)timekeeping
C)purchasing
D)HRM
Q2) Why are accurate cumulative earnings records important?
Q3) Employee turnover will always occur and some experts believe it may even be desirable in an organization.Experts estimate that on average the costs associated with replacing an employee are about __________ that of the employee's annual salary.
A)one-quarter
B)one-half
C)one and one-half
D)twice
Q4) A "zero balance check" refers to which of the following control procedures?
A)batch totals
B)cross-footing the payroll register
C)a payroll clearing account
D)online edit control
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Chapter 14: General Ledger and Reporting System
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Q1) The general ledger system of an organization should be designed to serve the information requirements of both financial and nonfinancial users.This means that the system should
A)support producing regular periodic reports.
B)support the real-time inquiry needs of all users.
C)support producing regular periodic reports and respond to real-time inquiry needs.
D)support access by investors and creditors of the organization to general ledger balances.
Q2) When a manager uses statistical methods and artificial intelligence to search for patterns in a database,she is performing
A)data mining.
B)object linking and embedding (OLE.)
C)data marting.
D)online analytical processing (OLAP.)
Q3) Corrections are entries made to correct errors found in __________.
A)all journals.
B)special journals.
C)the general ledger.
D)the financial statements.
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Chapter 15: Data Modeling and Database Design
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Q1) Which is a true statement about the REA data model?
A)The REA data model classifies entities into three distinct categories.
B)The term REA is an acronym that stands for resources,entities,and agents.
C)Using an REA data model is not helpful when creating an R-E diagram.
D)The "E" in the REA data model stands for things that have an economic value to the organization.
Q2) Each event in an REA model will in most cases have at least one __________ agent and one __________ agent involved with the event.
A)internal; resource
B)external; entity
C)internal; employee
D)internal; external
Q3) Accountants should be involved in __________ aspect(s)of the database design process.
A)only the physical modeling
B)all
C)only the data flow diagram
D)only the requirements analysis
Q4) What is data modeling?
Q5) What are the three steps in developing an REA diagram?
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Chapter 16: Implementing an Rea Model in a Relational Database
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Q1) Concerning the creation of tables from an REA diagram,which of the following is false?
A)M:N relationships must be implemented as separate tables.
B)1:N relationships are implemented with the primary key of the 1 side becoming a foreign key on the N side.
C)1:1 relationships are implemented with the primary key of either entity included as a foreign key in the table representing the other entity.
D)All of the above are true
Q2) Which table is most likely to have a concatenated key?
A)customer
B)sales
C)customer-sales
D)none of the above
Q3) _______ databases are commonly used to support transaction processing.
A)Access
B)E-R
C)REA
D)Relational
Q4) Explain a completeness check.
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Chapter 17: Special Topics in Rea Modeling
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Q1) Why is the event Issue Debt often modeled as a separate event entity?
Q2) The relationship between the Fill Customer Order and Ship Order events is 1-1.The minimum cardinalities reflect the fact that the two events are sequential.
A)0:N
B)1:1
C)1:N
D)M:N
Q3) Customer number is least likely to be a foreign key in:
A)Call on Customers
B)Customers
C)Fill Customer Order
D)Take Customer Order
Q4) Give an example of an M:N Agent-Event relationship
Q5) There are four main events of interest included in a typical production cycle REA diagram.Which of the following is not one of them?
A)Issuance of raw materials
B)Use of general and administrative expenses
C)Use of labor in production
D)Use of machinery and equipment in production
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Chapter 18: Introduction to Systems Development and Systems Analysis
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Q1) On March 18,2008,a newly installed robotic painting system broke down.A technician was called to repair the system.She found that a shoe had been shoved into the system's innards.This is an example of dealing with change by A)deterrence.
B)projection.
C)avoidance. D)aggression.
Q2) What four strategies can be used for determining user requirements?
Q3) It is appropriate to develop several different design approaches to meeting system requirements for a project.Capital budgeting techniques are used to evaluate the economic merits of each alternative.The technique where estimated future cash flows are discounted back to the present is referred to as
A)the future value method.
B)the internal rate of return.
C)the net present value method.
D)the payback method.
Q4) Identify the main reasons why companies change existing systems?
Q5) What are the three other main activities performed during the SDLC?
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Q6) Who makes up the project development team and what is the team's purpose?
Chapter 19: Ais Development Strategies
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Q1) One of the principles of business process reengineering is to centralize and disperse data.How is this principle defined?
A)certain processes can be performed in parallel and integrated at the end
B)data is entered once in an on line database and made available to all who need it
C)existing job descriptions and departmental boundaries are eliminated
D)information technology can maintain a centralized database,while telecommunications technology can disburse data to necessary locations
Q2) Benathir Donathat,director of the project committee,has received approval from management for implementation of a new accounting information system.After putting out an RFP,the committee settled on a vendor that will provide an industry standard software package and post-sale technical support.Their decision is to go with A)canned software.
B)a turnkey system.
C)an outsourced system.
D)an end-user developed system.
Q3) Briefly identify the difficulties encountered when developing an AIS.
Q4) Briefly discuss how an organization can develop custom software.
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Chapter 20: Systems Design, Implementation and Operation
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Q1) Several types of documentation must be prepared for a new system.The type of documentation that includes operating schedules and file retention requirements is called
A)development documentation.
B)operations documentation.
C)reference documentation.
D)user documentation.
Q2) Effective AIS training involves
A)instruction on new hardware and software.
B)orientation to new policies and operations.
C)planning and scheduling so it occurs before system testing and conversion.
D)All of the above are correct.
Q3) In the file and database design step of the physical systems design phase,it is advantageous to have
A)a compatible format.
B)easy access.
C)timely queries.
D)various capabilities.
Q4) What is the objective of output design? What are the output design considerations? What are the various categories of outputs?
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