Accounting Information Systems
Textbook Exam Questions
Course Introduction
Accounting Information Systems explores the intersection of accounting practices and information technology, focusing on how organizations collect, process, and communicate financial data. This course examines the design, implementation, and management of computerized accounting systems, with attention to internal controls, data security, and the role of information systems in supporting decision-making processes. Students will develop an understanding of database management, transaction processing cycles, and the integration of emerging technologies such as cloud computing and data analytics in the accounting function. The course also addresses ethical considerations and regulatory requirements relevant to accounting information systems.
Recommended Textbook
Cornerstones of Cost Accounting 1st Edition by Don
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20 Chapters
2433 Verified Questions
2433 Flashcards
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R. Hansen
Page 2
Chapter 1: Introduction to Cost Management
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Sample Questions
Q1) Which of the following statements is NOT true about world-class firms?
A) World-class firms are firms that are poor in customer support.
B) World-class firms know their market and their products.
C) World-class firms strive continually to improve product design, manufacture, and delivery.
D) World-class firms can compete with the best of the best in a global environment.
Answer: A
Q2) Accounting activities within an organization are usually under the overall supervision of the
A) Certified Public Accountant.
B) controller.
C) Chartered Accountant.
D) treasurer.
Answer: B
Q3) What is the difference between a staff position and a line position?
Answer: A line position has direct responsibility for carrying out the basic objectives of an organization.A staff position has indirect responsibility for the basic objectives and provides a supportive role for line activities.
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3
Chapter 2: Basic Cost Management Concepts
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Sample Questions
Q1) Refer to Figure 2-13.What are the total manufacturing costs added?
A) $ 186,000
B) $ 180,000
C) $ 144,000
D) $ 174,200
Answer: A
Q2) Error costs can be defined as
A) the costs associated with the measurements required by the cost management system.
B) unit costs assigned based on activities.
C) the costs associated with making poor decisions based on bad cost information.
D) none of these
Answer: C
Q3) Conversion costs do NOT include
A) direct materials.
B) direct labor.
C) factory overhead.
D) any of these costs.
Answer: A
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Page 4
Chapter 3: Cost Behavior
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Sample Questions
Q1) Refer to Figure 3-3.Calculate the activity rate per change order.
A) $4 per change order
B) $10 per change order
C) $40 per change order
D) $15 per change order
Answer: C
Q2) Which of the following decision-making tools would NOT be useful in determining the slope and intercept of a mixed cost?
A) linear programming
B) least-squares method
C) high-low method
D) scattergraphs
Answer: A
Q3) Which of the following is NOT a correct statement concerning cost behavior?
A) In the long run, all costs are variable.
B) Variable costs increase in total in relation to the activity driver.
C) Unit fixed costs increase or decrease inversely in relation to the activity driver.
D) All of these
Answer: D
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Page 5
Chapter 4: Activity-Based Costing
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Sample Questions
Q1) The proportion of an overhead activity consumed by a product is the A) overhead ratio.
B) consumption ratio.
C) quick ratio.
D) fixed ratio.
Q2) Refer to Figure 4-10.What is the unit product cost for mops if a plantwide rate is used?
A) $11.00
B) $ 4.00
C) $ 5.40
D) $ 4.12
Q3) In the time-driven ABC systems, managers
A) assign resources to departments, then activities.
B) assign resource costs first to activities, then to products.
C) directly estimate the resource demands imposed by each product.
D) none of these.
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Chapter 5: Product and Service Costing: Job-Order System
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Sample Questions
Q1) If there is a debit balance in overhead control, that implies
A) actual overhead costs exceed overhead applied.
B) applied overhead exceeds actual overhead.
C) actual overhead has not been closed to cost of goods sold.
D) none of these.
Q2) Carlson Company uses a predetermined rate to apply overhead.At the beginning of the year, Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000.Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. If the predetermined overhead rate is based on machine hours, what is the total amount credited to the factory overhead account for the year for Carlson?
A) $249,280
B) $246,000
C) $240,000
D) $264,000
Q3) Unit cost information is needed for
A) costing inventory.
B) financial reporting requirements.
C) decision making.
D) all of these.
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Chapter 6: Process Costing
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Sample Questions
Q1) Refer to Figure 6-5.What are the equivalent units?
A) 200
B) 170
C) 180
D) 150
E) none of these
Q2) Refer to figure 6-5.What were the total number of units to account for?
A) 50
B) 150
C) 200
D) 400
E) none of these
Q3) Refer to Figure 6-10.If materials were added at the beginning of the process, how many equivalent units of production for conversion costs would there be for Irvin using the FIFO costing method?
A) 101,500 units
B) 110,000 units
C) 105,500 units
D) 116,500 units
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Page 8
Chapter 7: Allocating Costs of Support Departments and Joint Products
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Sample Questions
Q1) What is S1's cost equation?
A) S1 = $15,000 + 0.06S2
B) S1 = $8,000 + 0.06S2
C) S1 = $15,000 + 0.10S2
D) S1 = $8,000 + 0.10S2
Q2) Rules of financial reporting (GAAP) require
A) that only direct manufacturing costs be assigned to products.
B) that only producing department costs be assigned to products.
C) that direct manufacturing costs and a fair share of indirect manufacturing costs be assigned to products.
D) that only indirect manufacturing costs be assigned to products.
Q3) Which joint cost allocation method is described by the following statement? Overall sales revenue minus overall costs (joint plus further processing costs) is calculated to yield gross profit and the gross profit percentage.Each product is then assigned the same cost of goods sold percentage.
A) constant gross margin method
B) weighted average method
C) sales-value-at-split-off method
D) net realizable method
Page 9
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Chapter 8: Budgeting for Planning and Control
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Sample Questions
Q1) What is the activity variance for purchasing?
A) $500 U
B) $100 U
C) $50 U
D) none of these
Q2) How many units of A2 are expected in the raw material inventory at the end of the second month?
A) 30 units
B) 45 units
C) 40 units
D) 35 units
Q3) Which of the following is NOT a component of the master budget?
A) Sales Budget
B) Capital Budget
C) Cost of Goods Sold Budget
D) Budget to Actual Variance Analysis
Q4) Define budgeting and control.How are budgets used in planning? How are budgets used to control? What are some of the reasons for budgeting?
Q5) Compare and contrast static budgets, flexible budgets, and activity-based budgets.
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Chapter 9: Standard Costing: a Functional-Based Control Approach
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Sample Questions
Q1) Refer to 9-2.What is the labor efficiency variance for Bender Corporation?
A) $480 (U)
B) $552 (F)
C) $552 (U)
D) $480 (F)
Q2) Price standards are the responsibility of
A) accounting.
B) purchasing.
C) personnel.
D) all of these.
Q3) How many actual labor hours were worked during February for Claire Company?
A) 10,000
B) 2,000
C) 1,200
D) 12,000
Q4) Standard costing
A) establishes price and quantity standards for inputs.
B) provides journal entry support.
C) is not used in unit costing.
D) none of these.
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Chapter 10: Decentralization: Responsibility Accounting,
Performance Evaluation, and Transfer Pricing
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Sample Questions
Q1) 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.
Q2) When there is an outside market for an intermediate product that is perfectly competitive, the most equitable method of transfer pricing is A) market price.
B) production cost pricing.
C) variable cost pricing.
D) cost plus markup pricing.
Q3) If the turnover increased by 30 percent and the margin decreased by 30 percent, the ROI would
A) decrease by 9 percent.
B) increase by 69 percent.
C) increase by 91 percent.
D) stay the same.
Q4) How are information, responsibility, and accountability related?
Page 12
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Chapter 11: Strategic Cost Management
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Sample Questions
Q1) Which of the following manufacturing costs is assigned to products in JIT environment using direct tracing?
A) material handling
B) repairs and maintenance
C) custodial services
D) all of these
Q2) The ___________________ approach to quality control strives for zero defects.
A) acceptable quality level
B) total quality control
C) traditional
D) both a and c
Q3) When a computer company targets customers in the South, it is following a
A) focusing strategy.
B) low-cost strategy.
C) differentiation strategy.
D) strategic allocation strategy.
Q4) Explain the difference between acceptable quality level and total quality control.
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Chapter 12: Activity-Based Management
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Sample Questions
Q1) Activity-based management can be viewed as an information system with broad objectives.Which of the following is NOT on of the broad objectives of ABM?
A) Support continuous improvement through cost reduction.
B) Increase the non-value-added costs through increased collection of more accurate cost accounting information.
C) Improve decision making through more accurate cost data.
D) All of these are broad objectives of ABM.
Q2) The value-added costs are
A) $4.
B) $8.
C) $64.
D) $72.
Q3) Which of the following is a value-added activity?
A) moving
B) inspection
C) processing
D) waiting
Q4) Describe how activity-based management and activity-based costing systems differ.
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Chapter 13: The Balanced Scorecard: Strategic-Based Control
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Sample Questions
Q1) The theoretical velocity per hour is
A) 4.0 units.
B) 3.6 units.
C) 1.1 units.
D) 1.0 units.
Q2) Which of the following is NOT a condition that must be present for a strategy to become attainable?
A) budgetary process must provide the resources necessary to carry out the initiatives
B) resources must be allocated to strategic initiatives
C) the organization must decide how much of the strategic targets will be achieved for the coming year
D) all are conditions that must be met for strategy to become actionable
Q3) Which of the following is NOT a measure commonly used to evaluate asset utilization?
A) return on investment
B) economic value added
C) market share
D) Return on investment
Q4) Compare and contrast activity-based measures and strategic-based measures.
15
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Chapter 14: Quality and Environmental Cost Management
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Sample Questions
Q1) Which of the following is NOT a dimension of quality?
A) performance
B) durability
C) reliability
D) All of these are dimensions of quality.
Q2) According to the robust view, the strategy for reducing quality costs is NOT based on which assumption?
A) For every failure there is a root cause.
B) Causes are preventable.
C) Prevention costs must be balanced with the benefits.
D) Continually redirecting prevention efforts will lead to further improvements.
Q3) What is the environmental costs as a percentage of sales for 2012?
A) 100%
B) 10%
C) 80%
D) 1,000%
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?
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Chapter 15: Lean Accounting and Productivity Measurement
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Sample Questions
Q1) Which of the following is true in regards to a lean accounting system?
A) The cost of people with specialized skills, such as industrial engineers, are allocated to all manufacturing cells based on an activity driver.
B) Workers are multiskilled and responsible for setting up equipment, maintaining equipment, and operating equipment.
C) Implementing a value stream system will require more workers.
D) Workers are highly skilled in one specialized area or activity and are not expected to spend time on other value-added activities.
Q2) A financial productivity measure uses _______________ to measure input and output.
A) revenues
B) costs
C) dollars
D) physical quantities
Q3) What is the materials productivity ratio for 2011?
A) 13
B) 12
C) 10
D) 8
Page 17
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Chapter 16: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Refer to Figure 16-1.What is the variable product cost per unit for Kringel?
A) $0.85
B) $1.25
C) $0.40
D) $2.50
Q2) In 2011, Angel's Bath and Body Shop had variable costs of $27,000, fixed costs of $18,000, and a net loss of $4,500. The annual sales volume required for Angel's to have a before-tax income of $18,000 is
A) $126,000.
B) $84,000.
C) $73,500.
D) $42,000.
Q3) A decrease in the sales price in the basic cost-volume-profit model would
A) require a recomputation of the gross profit per unit.
B) be offset by an increase in unit costs.
C) decrease the break-even volume.
D) increase the break-even volume.
Q4) In the Cost-Volume-Profit analysis, what are two ways management can deal with risk and uncertainty?
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Chapter 17: Activity Resource Usage Model and Tactical Decision Making
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Sample Questions
Q1) An important qualitative factor to consider regarding a special order is the A) variable costs associated with the special order.
B) avoidable fixed costs associated with the special order.
C) effect the sale of special-order units will have on the sale of regularly priced units.
D) incremental revenue from the special order.
Q2) For flexible resources, which of the following statements is true?
A) A change in resource spending will only occur if the demand for a resource drops permanently and exceeds demand enough so the activity capacity will be reduced. B) Often, resources are acquired in advance for multiple periods and are therefore irrelevant.
C) Decisions often affect multi-period capabilities.
D) If the demand for an activity changes across alternatives, then resource spending will change and the cost of the activity will be relevant to the decision.
Q3) What are relevant costs? How do they relate to decision making?
Q4) Describe the steps in the decision-making process.What is the role of qualitative factors in tactical decision-making?
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Page 19
Chapter 18: Pricing and Profitability Analysis
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Sample Questions
Q1) Absorption costing net income would be _______________ variable costing net income.
A) $150,000 greater than
B) $150,000 less than
C) $240,000 less than
D) $240,000 greater than
Q2) What is the markup based on cost of goods sold?
A) 50.0%
B) 100.0%
C) 37.5%
D) 62.5%
Q3) Refer to Figure 18-1.What is the total cost per case for drugstore chains?
A) $2.17 per case
B) $2.20 per case
C) $2.35 per case
D) $2.45 per case
Q4) Compare and contrast the various pricing policies used by companies.
Q5) Discuss the limitation of profit measurement.
Q6) What are some of the pricing practices regulated by law?
Page 20
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Chapter 19: Capital Investment
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Sample Questions
Q1) A project requires an investment of $40,000 in equipment.Annual cash flows of $8,000 are expected to occur for the next eight years.No salvage value is expected.The company uses the straight-line method of depreciation with no mid-year convention.Ignore income taxes. The accounting rate of return on the original investment for the project is
A) 6.25%.
B) 7.50%.
C) 16.00%.
D) 20.00%.
Q2) Which of the following is an example of an independent project?
A) A manufacturing plant considering a major overhaul of an existing machine or replacing the existing machine with a new model.
B) A hospital considering the purchase of a new MRI machine and a new cardiac monitoring system.
C) A bank deciding between keeping a manual check sorting process or an automated sort process.
D) A retailer deciding between an inventory management system offered by two different vendors.
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21
Chapter 20: Inventory Management: Economic Order
Quantity, Jit, and the Theory of Constraints
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Sample Questions
Q1) Margaret Company has an economic order quantity for item B of 100 units.The annual demand for the product is 1,400 units, and the unit carrying cost per year is $7.The company operates 200 days a year, the lead time for the item is ten days, and the safety stock is 100 units. What is the reorder point?
A) 70 units
B) 170 units
C) 1000 units
D) 100 units
Q2) A withdrawal Kanban specifies
A) how much should be produced to replace inventory.
B) the quantity that a subsequent process should withdraw from the preceding process.
C) when customers should be notified to pick up orders.
D) when suppliers should be notified to deliver more parts.
Q3) JIT avoids shutdowns due to materials shortage in all of the following ways EXCEPT
A) using total preventive maintenance.
B) holding inventory.
C) using total quality control to reduce defective materials.
D) working with suppliers to ensure the availability of materials.
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