Accounting Technology Exam Practice Tests
Course Introduction
Accounting Technology explores the integration of digital tools and information systems within the accounting profession. This course examines the use of accounting software, cloud-based platforms, and emerging technologies such as artificial intelligence and blockchain to streamline financial processes, ensure data accuracy, and enhance decision-making. Students will gain practical experience with various accounting technologies, learn about data security concerns, and understand how technology is transforming traditional accounting roles and business practices. The course prepares students to effectively utilize current and future technologies in the dynamic field of accounting.
Recommended Textbook
Accounting Information Systems A Practitioner Emphasis 7th Edition by Cynthia D. Heagy
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15 Chapters
1075 Verified Questions
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Page 2
Chapter 1: Significance of Accounting Information Systems
and the Accountants Role
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46 Verified Questions
46 Flashcards
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Sample Questions
Q1) From what do accounting transactions result?
A) Both external and internal activities
B) External activities
C) Internal activities
D) Neither external nor internal activities
Answer: A
Q2) Contemporary accounting information systems include data that could not be economically collected before the current level of computerization.
A)True
B)False
Answer: True
Q3) What are the major components of a computerized accounting system?
Answer: Hardware, software, and people
Q4) Which of the following certifications is specifically designed for internal auditors?
A) Certified information systems auditor
B) Certified internal auditor
C) Certified public accountant
D) Certified fraud examiner
Answer: B
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Chapter 2: Accounting Systems Documentation
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Sample Questions
Q1) What are the broadest and most detailed forms of system documentation, respectively?
A) Block diagrams; system flowcharts
B) Narrative descriptions; block diagrams
C) System flowcharts; narrative descriptions
D) Narrative descriptions; system flowcharts
Answer: D
Q2) Documentation as it relates to accounting systems is a communication device that describes in pictures, words, or both how to use the system, and what the system does, and how the system operates.
A)True
B)False
Answer: True
Q3) Unauthorized documentation circulating in an organization should be immediately destroyed.
A)True
B)False
Answer: False
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Chapter 3: Essential Elements and Basic Activities of Accounting Systems
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Sample Questions
Q1) Which of the following methods can be used to create a transaction file?
A) Keying in or scanning data found on source documents
B) Transmitting data electronically
C) Extracting data from master files or open files
D) All of the above can be used.
Answer: D
Q2) A bill of lading is a written contract between the shipper and the consignee.
A)True
B)False
Answer: False
Q3) What type of file is used to store data about transactions that have been started but not completed?
A) Transaction
B) Master
C) Open
D) Reference
Answer: C
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Page 5
Chapter 4: Data Flows, Activities, and Structure of Accounting Systems
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Sample Questions
Q1) What is the subsystem labeled (2)?
A) General ledger
B) Cost accounting
C) Customer invoicing
D) Inventory management
Q2) Which of the following statements regarding subsystems is true?
A) Subsystems are defined in the broadest terms.
B) The same subsystems are present in all types of organizations.
C) Subsystems perform well-defined transaction-processing functions.
D) Subsystems are referred to as "logical branches" in accounting software packages.
Q3) Which of the following is one of the most common processing activities?
A) Merging
B) Summarization
C) Comparison
D) Updating, or posting
Q4) It is possible for a transaction to be initiated by programmed instructions in a computer program.
A)True
B)False
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Chapter 5: Reporting Process, Coding Methods, and Audit Trails
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80 Flashcards
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Sample Questions
Q1) Which of the following tools would allow an auditor to most easily and efficiently compare a client company's financial results with those of its competitors?
A) HTML tagging
B) XBRL tagging
C) Database management system
D) Electronic spreadsheet
Q2) What is an audit trail?
Q3) A block code leads an accountant or auditor from a data item's specific location in the accounting information system to its preceding or successor location.
A)True
B)False
Q4) Which of the following languages is a financial reporting language developed in part by the accounting profession?
A) Extensible markup language (XML)
B) Extensible business reporting language (XBRL)
C) Structured query language (SQL)
D) Hypertext markup language (HTML)
Q5) What are the reporting principles discussed in this chapter?
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Chapter 6: Internal Control and Risk Assessment
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Sample Questions
Q1) What does (3) represent?
A) Total cost
B) Loss area
C) Cost of controls
D) Level of assurance
E) Optimal point of reasonable assurance C
Q2) What are the components of internal control?
Q3) The audit committee is composed of top managers of a company.
A)True
B)False
Q4) Which of the following is not a responsibility of an audit committee?
A) Recommending an external auditor
B) Attesting to the fairness of the financial statements
C) Reviewing significant financial information
D) Seeing that an effective internal control is maintained
Q5) IT governance refers to the board of directors' policies and procedures related to the choice of IT audit firms.
A)True
B)False
Q6) Define Enterprise Risk Management.
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Chapter 7: Control Activities
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Sample Questions
Q1) Explain what key(s) would be used by a business transmitting sensitive data and why the key(s) would be used.
Q2) Identify and briefly describe the classification scheme for control activities.
Q3) What are controls that concern all computer activities?
A) General controls.
B) Application controls.
C) Change controls.
D) IT audit controls.
Q4) The authority for receiving incoming shipments of goods and the responsibility for checking them normally resides with which of the following?
A) Receiving department and quality control personnel
B) Purchasing agent and quality control personnel
C) Employee who initiated the order and quality control personnel
D) Quality control personnel
Q5) What is the most common computer-related problem confronting organizations?
A) Hardware malfunction
B) Input errors
C) Disruption to the processing activities as a result of natural disasters
D) Fraud
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Chapter 8: The Financial Process
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Sample Questions
Q1) What type of account is used to accumulate physical, as opposed to monetary, data?
A) Normal account
B) Statistical account
C) Sub-account
D) Master account
Q2) What type of transaction would initially be recorded in the general ledger?
A) Payment of a lawsuit settlement of $5 million
B) Payroll
C) Purchases from vendors
D) Sales to customers
Q3) Which of the following illustrates a difference between GAAP and IFRS?
A) Under IFRS, component depreciation is allowed.
B) Under IFRS, impairment adjustments cannot be reversed.
C) Under IFRS, the classification of some financial instruments will cause a change to GAAP-calculated debt ratios.
D) Under IFRS, whether or not an entity is consolidated has to do with whether the consolidation was handled using the purchase method.
Q4) List the types of entries recorded in the financial process.
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Chapter 9: The Revenue Process
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Sample Questions
Q1) The revenue process includes not only reporting but also facilitating and controlling certain business processes of the firm.
A)True
B)False
Q2) What is the purpose of sales analysis reporting?
A) It gives management a basis for judging the performance of individual sales personnel.
B) Customers providing disappointing gross profit on the sales dollar may be identified.
C) Historical sales data are used to provide planning and control information for managers.
D) All of the above are valid purposes of sales analysis reports.
Q3) What is the difference between credit limit, credit rating, and credit hold?
Q4) In the open item system, payments are applied to the outstanding balance rather than against particular invoices.
A)True
B)False
Q5) Explain why gross profit analysis is more useful than sales analysis.
Q6) Give two examples of data verification controls found in the revenue process.
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Chapter 10: The Purchasing Process
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Sample Questions
Q1) Describe some factors which may complicate competitive bidding.
Q2) The following actions are associated with which of the following triggers in the purchasing process:
A) Associate/match purchase order, receiving report, vendor invoice.
B) Add to open vendor invoice file.
C) Update vendor master file.
D) Receipt of goods.
E) Shipment to customer.
F) Arrival of due date for payment.
G) None of the above.
Q3) Which of the following initiates a bidding situation among suppliers?
A) Request for quotation; request for proposal
B) Request for bid response; request for quotation
C) Request for deliverables; request for quotation
D) Request for proposal; request for bid response
Q4) The delivery of goods or provision of contracted services places the organization under an obligation to pay the vendor.
A)True
B)False
Q5) Describe output controls typically found in the purchasing process.
Page 12
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Chapter 11: The Inventory Process
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Sample Questions
Q1) If the sum of free stock and units on order equals the reorder point, the recommended order size is equal to the economic order quantity.
A)True
B)False
Q2) Which of the following are software systems that expand an organization's reach outside to suppliers and customers?
A) Enterprise resource planning systems
B) Just in time inventory systems
C) Supply chain management systems
D) None of the above
Q3) What are the tasks that supply chain management software can perform?
Q4) Where does most of the data entry relating to inventory occur?
A) In the inventory and revenue processes.
B) In the revenue and financial processes.
C) In the revenue and purchasing processes.
D) In the inventory and purchasing process.
Q5) The reorder point is reached when the stock on hand equals the safety stock. A)True
B)False
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Chapter 12: Database Structure of Accounting Systems
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Sample Questions
Q1) What are the three ways in which a user can interface with a database management system?
Q2) The database architecture includes an external level, which is the physical implementation of the conceptual level.
A)True
B)False
Q3) A framework that is helpful for discussing different aspects of a database is its architecture.
A)True
B)False
Q4) Which of the following statements about a relationship in a database is correct?
A) It is a connection or interaction between tables.
B) It may exist because of the nature of the data elements themselves.
C) It may exist because of the need to relate information in the database in some prescribed manner.
D) A and B, but not C
E) A, B, and C E
Q5) Describe data redundancy in an accounting system and the problems it causes.
Q6) Identify the types of relationships that can exist between tables in a database.
Q7) Define the two database models discussed in the chapter.
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Chapter 13: Developing a Relational Database for an Accounting Information System
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Sample Questions
Q1) What are the steps required to develop a relational database for an accounting system using the system output approach?
Q2) Which of the following statements regarding normal forms is incorrect?
A) A table is in first normal form if it has multivalued or repeating data elements.
B) A table that has a single primary key is in second normal form.
C) Converting a table into second normal form applies only to a table that has a composite key.
D) A table is in third normal form if it is in second normal form and has no transitive dependencies.
Q3) A table is in the first normal form if it has no transitive dependencies. A)True B)False
Q4) What are the three steps that will normalize data with respect to the third normal form?
Q5) What is the step that will normalize data with respect to the first normal form?
Q6) Tables in a relational database are documented by a data flow diagram. A)True B)False
Page 15
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Chapter 14: Electronic Business
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Sample Questions
Q1) What characterizes a "discrete" bar code (as contrasted with "continuous")?
A) It has a fixed length.
B) It has inter-character gaps.
C) It represents a limited amount of data.
D) It uses white and black bars to represent data.
E) None of the above B
Q2) The EDI standard most commonly used by businesses in the USA is
A) A comprehensive standard that encompasses all lines of businesses
B) The only common factor in EDI used by USA businesses is that they are all approved by a standards setting organization.
C) There is a single standard with extensive standard variations to accommodate unique requirements of various industries.
D) Most businesses in the USA use an international standard.
Q3) List the three types of e-business and give one example of each.
Q4) EDI standards are set under the supervision of the American National Standards Institute domestically and the United Kingdom internationally.
A)True
B)False
Q5) Identify three of the four functions of a VAN listed in the chapter.
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Chapter 15: Ais Selection and Implementation
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Sample Questions
Q1) What is a common threat in AIS software selection?
A) The danger of adopting "cutting edge" technology that contains defects
B) Newer software products have a greater number of "bugs."
C) The language in licensing contracts
D) All of these are common threats in AIS software selection.
Q2) The current business model for AIS implementation is to purchase a commercial off-the- shelf accounting software package.
A)True
B)False
Q3) What is a Gantt chart?
A) A diagram planning tool showing the order in which to perform tasks
B) A bar chart with all major tasks on the vertical axis and a calendar on the horizontal axis
C) A bar chart with all major tasks on the horizontal axis and a calendar on the vertical axis
D) A decision chart designed to determine a single versus multiple suppliers
Q4) Discuss the various methods of conversion to an AIS system.
Q5) Many CPAs advise against any modifications of a commercial off-the-shelf AIS.
A)True
B)False
Page 17
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