Accounting Information Systems
Test Preparation
Course Introduction
Accounting Information Systems explores the integration of information technology and accounting processes within organizations. This course covers the design, implementation, and management of systems that collect, process, and report financial data to support decision-making, internal controls, and compliance. Topics include system documentation, database concepts, internal controls, security measures, and the role of AIS in strategic planning. Students will analyze real-world cases, utilize accounting software, and evaluate technological trends shaping modern accounting environments, preparing them to effectively use and manage information systems in a professional context.
Recommended Textbook
Corporate Financial Accounting 12th Edition by Carl
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15 Chapters
2628 Verified Questions
2628 Flashcards
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Page 2
S. Warren
Chapter 1: Introduction to Accounting and Business
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184 Verified Questions
184 Flashcards
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Sample Questions
Q1) The accountant for Franklin Company prepared the following list of account balances from the company's records for the year ended December 31,2011: \(\begin{array}{llll}
\text { FeesEarned } & \$ 165,000 & \text { Cash } & \$ 30,000 \\
\text { Accounts Receivable } & 14,000 & \text { Selling Expenses } & 44,000 \\
\text { Equipment } & 64,000 & \text { Capital Stock } & 7,000 \\
\text { Accounts Payable } & 22,000 & \text { Retained Earnings } & 23,000 \\
\text { Salaries \& Wages Expense } & 40,000 & \text { Prepaid Rent } & 2,000 \\
\text { Dividends } & 5,000 & \text { Income Taxes Expense } & 13,000 \\
\text { Salaries \& Wages Payable } & 15,000 & \text { Rent Expense } & 20,000 \end{array}\)
Determine the total assets at the end of 2011 for Franklin Company. Answer: \( \$ 110,000 \)
\( \$ 30,000 \) Cash \( +\$ 14,000 \) Accounts Receivable \( +\$ 64,000 \) Equipment \( +2,000 \) Prepaid Rent \( =\$ 110,000) \)
Q2) Revenue is earned only when money is received.
A)True
B)False
Answer: False
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3
Chapter 2: Analyzing Transactions
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212 Flashcards
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Sample Questions
Q1) Which of the following statements is not true about liabilities?
A)Liabilities are debts owed to outsiders.
B)Account titles of liabilities often include the term "payable."
C)Receiving cash before a service is performed creates a liability.
D)Liabilities do not include wages owed to employees of the company.
Answer: D
Q2) Which one of the statements below is not a purpose for the journal?
A)to show increases and decreases in accounts
B)to show a chronological order by date
C)to show a complete transaction in one place
D)to help posting transactions to ledger
Answer: A
Q3) The post reference notation used in the ledger is the account number.
A)True
B)False
Answer: False
Q4) The journal includes both debit and credit accounts for each transaction.
A)True
B)False
Answer: True
Page 4
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Chapter 3: The Adjusting Process
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168 Verified Questions
168 Flashcards
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Sample Questions
Q1) By matching revenues and expenses in the same period in which they incur
A)net income or loss will always be underestimated.
B)net income or loss will always be overestimated.
C)net income or loss will be properly reported on the income statement
D)net income or loss will not be determined.
Answer: C
Q2) At year-end,the balance in the prepaid insurance account,prior to any adjustments,is $6,000.The amount of the journal entry required to record insurance expense will be $4,000 if the amount of unexpired insurance applicable to future periods is $2,000.
A)True
B)False
Answer: True
Q3) At the end of April,the first month of the year,the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted.Indicate which items will be incorrectly stated,because of the error,on (a)the income statement for April and (b)the balance sheet as of April 30.Also indicate whether the items in error will be overstated or understated.
Answer: 11ea906a_d1cd_a695_aec7_2dc8419cb734_TB2051_00
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Page 5
Chapter 4: Completing the Accounting Cycle
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192 Verified Questions
192 Flashcards
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Sample Questions
Q1) The income statement is prepared from the adjusted trial balance or the income statement columns on the work sheet.
A)True
B)False
Q2) The end-of-period spreadsheet (work sheet)for the current year for Jamal Company shows Balance Sheet columns with a debit total of $614,210 and a credit total of $630,430.This is before the amount for net income or net loss has been included.In preparing the income statement from work sheet,what is the amount of net income or net loss?
Q3) On which financial statement will Income Summary be shown?
A)retained earnings statement
B)balance sheet
C)income statement
D)none of these
Q4) The most important output of the accounting cycle is the financial statements. A)True B)False
Q5) A work sheet heading is dated for a period of time. A)True B)False
6
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Chapter 5: Accounting for Merchandising Businesses
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217 Verified Questions
217 Flashcards
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Sample Questions
Q1) Which of the following items should not be included in the cost of ending merchandise inventory?
A)purchased units in transit,shipped FOB shipping point
B)purchased units in transit,shipped FOB destination
C)units on hand in the warehouse
D)sold units in transit,not invoiced and shipped FOB destination
Q2) In a perpetual inventory system,merchandise returned to vendors reduces the merchandise inventory account.
A)True
B)False
Q3) Merchandise is sold for cash.The selling price of the merchandise is $5,000 and the sale is subject to a 7% state sales tax.The journal entry to record the sale would include
A)A credit to Cash for $5,000.
B)A credit to Sales for $5,350.
C)A credit to Sales Tax Payable for $350.
D)None of these answers are correct.
Q4) The seller records the sales tax as part of the sales amount.
A)True
B)False
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Chapter 6: Inventories
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Sample Questions
Q1) For the year ended December 31,2014 Depot Max's cost of merchandise sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Compute Depot Max's inventory turnover for the year.
A)8.7
B)7.8
C)8.3
D)44
Q2) During periods of rapidly rising costs,the use of the LIFO method results in illusory or inventory profits.
A)True
B)False
Q3) Too much inventory on hand
A)reduces solvency
B)increases the cost to safeguard the assets
C)increases the losses due to price declines
D)all of the above
Q4) The lower of cost or market is a method of inventory valuation.
A)True
B)False
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Chapter 7: Sarbanes-Oxley, internal Control, and Cash
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175 Verified Questions
175 Flashcards
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Sample Questions
Q1) Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called
A)accounting controls
B)cash controls
C)preventive controls
D)detective controls
Q2) Most companies who have several bank accounts,petty cash,and cash on hand,would list each separately on the balance sheet.
A)True
B)False
Q3) Describe the features of a voucher system and list typical supporting documents for a voucher.
Q4) The debit balance in Cash Short and Over at the end of an accounting period is reported as
A)an expense on the income statement
B)income on the income statement
C)an asset on the balance sheet
D)a liability on the balance sheet
Q5) List the principal advantage of Electronic Funds Transfers.
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Chapter 8: Receivables
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Sample Questions
Q1) At the end of the current year,Accounts Receivable has a balance of $675,000;Allowance for Doubtful Accounts has a debit balance of $5,400;and net sales for the year total $3,000,000.An analysis of receivables indicates the uncollectible receivables are estimated to be $45,000. Determine (a)the amount of the adjusting entry for bad debt expense; (b)the adjusted balances of Accounts Receivable,Allowance of Doubtful Accounts;and Bad Debt Expense;and (c)the net realizable value of accounts receivable.
Q2) An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $6,400.If Allowance for Doubtful Accounts has a $1,300 debit balance,the adjustment to record the bad debt expense for the period will require a
A)debit to Bad Debt Expense for $7,700.
B)debit to Bad Debt Expense for $6,400.
C)debit to Bad Debt expense for $5,100 D)credit to Allowance for Doubtful Accounts for $1,300.
Q3) The interest on a 6%,60-day note for $5,000 is $300. A)True B)False
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Chapter 9: Fixed Assets and Intangible Assets
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Sample Questions
Q1) The double declining balance depreciation method calculates depreciation each year by taking twice the straight line rate times the book value of the asset at the beginning of each year.
A)True
B)False
Q2) Expenditures that increase operating efficiency or capacity for the remaining useful life of a fixed asset are betterments.
A)True
B)False
Q3) Machinery was purchased on January 1,2010 for $51,000.The machinery has an estimated life of 7 years and an estimated salvage value of $9,000.Double-declining balance depreciation for 2011 would be
A)$10,929
B)$6,000
C)$10,500
D)$10,408
Q4) The normal balance of the accumulated depreciation account is debit.
A)True
B)False
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Chapter 10: Current Liabilities and Payroll
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) On October 30,Seba Salon,Inc.issued a 90-day note with a face amount of $60,000 to Reyes Products,Inc.for merchandise inventory.Assuming a 360-day year,determine the proceeds of the note assuming the note is discounted at 8%.
A)$55,200
B)$64,800
C)$58,800
D)$61,200
Q2) Florida Keys Construction installs swimming pools.They calculate that warranty obligations are 3% of gross sales.For the year just ending Florida Keys' gross sales were $1,450,000.Due to previous quarter recognitions,the Warranty Liability account has a credit balance of $28,700.Determine the year's total warranty liability and journalize any necessary value to establish the year's liability at December 31st.
Q3) Federal unemployment taxes are paid by the employer and the employee.
A)True
B)False
Q4) Payroll taxes are based on the employee's net pay.
A)True
B)False
Q5) List five internal controls that relate directly to payroll.
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Chapter 11: Corporations: Organization, stock Transactions, and Dividends
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Sample Questions
Q1) The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.
A)True
B)False
Q2) The Dayton Corporation began the current year with a retained earnings balance of $32,000.During the year,the company corrected an error made in the prior year,which was a failure to record depreciation expense of $3,000 on equipment.Also,during the current year,the company earned net income of $12,000 and declared cash dividends of $7,000.Compute the year end retained earnings balance.
A)$34,000
B)$37,000
C)$41,000
D)$44,000
Q3) One of the main disadvantages of the corporate form is the A)professional management
B)double taxation of dividends
C)charter
D)corporation must issue stock
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Chapter 12: Long-Term Liabilities: Bonds and Notes
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183 Flashcards
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Sample Questions
Q1) When the market rate of interest was 11%,Valley Corporation issued $100,000,8%,10-year bonds that pay interest semiannually.Using the straight-line method,the amount of discount or premium to be amortized each interest period would be
A)$4,000
B)$896
C)$17,926
D)$1,793
Q2) When the effective-interest method is used,the amortization of the bond premium
A)increases interest expense each period
B)decreases interest expense each period
C)increases interest expense in some periods and decreases interest expense in other periods
D)has no effect on the interest expense in any period
Q3) There are two methods of amortizing a bond discount or premium: the straight-line method and the double-declining-balance method.
A)True
B)False
Q4) (a) Prepare the journal entry to issue $500,000 bonds which sold for $490,000 (b) Prepare the journal entry to issue $500.000 bonds which sold for $515,000
Page 14
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Chapter 13: Investments and Fair Value Accounting
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Sample Questions
Q1) On February 12,Addison,Inc.purchased 6,000 shares of Lucas Company at $22 per share plus a $240 brokerage fee.On August 22,Lucas paid a $0.42 dividend per share.On November 10,4,000 shares of Lucas stock were sold for $28 per share less a $160 brokerage fee.The journal entry for the sale would include:
A)a debit to Cash for $111,840
B)a credit to Investments for $112,000
C)a credit to Loss on Sale for $23,680
D)a debit to Cash for $112,000
Q2) On January 1,2014,Blanton Company's Valuation Allowance for Trading Investments account has a debit balance of $23,200.On December 31,2014,the cost of the trading securities portfolio was $80,000.The fair value was $98,000.Which of the following would Blanton report on the income statement for 2014?
A)an Unrealized Loss on Trading Investments of $5,200.
B)an Unrealized Gain on Trading Investments of $5,200.
C)an Unrealized Gain on Trading Investments of $18,000.
D)an Unrealized Loss on Trading Investments of $18,000.
Q3) Define (1)debt securities and (2)equity securities.Include their similarities and differences in your discussion.
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Chapter 14: Statement of Cash Flows
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159 Flashcards
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Sample Questions
Q1) The statement of cash flows is not useful for:
A)planning future investing and financing activities
B)determining a company's ability to pay its debts
C)determining a company's ability to pay dividends
D)calculating the net worth of a company
Q2) Repayments of bonds would be shown as a cash outflow in the investing section of the statement of cash flows.
A)True
B)False
Q3) The cost of merchandise sold during the year was $45,000.Merchandise inventories were $13,500 and $10,500 at the beginning and end of the year,respectively.Accounts payable were $7,000 and $5,000 at the beginning and end of the year,respectively.Using the direct method of reporting cash flows from operating activities,cash payments for merchandise total
A)$46,000
B)$44,000
C)$50,000
D)$40,000
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Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) When computing the rate earned on total common stockholders' equity,preferred stock dividends are subtracted from net income.
A)True
B)False
Q2) Which of the following is not included in the computation of the quick ratio?
A)inventory
B)marketable securities
C)accounts receivable
D)cash
Q3) An advantage of the current ratio is that it considers the makeup of the current assets.
A)True
B)False
Q4) The excess of current assets over current liabilities is referred to as working capital.
A)True
B)False
Q5) Why would you compare or not compare Coca-Cola and Pepsi-Cola (PepsiCo)as companies to each other?
Q6) Define solvency and profitability.How are they alike?
Page 17
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