Computer-Based Accounting Systems
Exam Questions
Course Introduction
Computer-Based Accounting Systems introduces students to the principles and applications of modern accounting software and digital tools used in financial management. The course covers the design, implementation, and operation of computerized accounting systems, emphasizing their role in automating bookkeeping, enhancing data accuracy, and supporting decision-making processes. Students will learn to use popular accounting software packages for tasks such as recording transactions, managing ledgers, generating financial reports, and ensuring system security. The course also explores regulatory compliance, the integration of technology with traditional accounting practices, and current trends shaping the future of accounting information systems.
Recommended Textbook
Accounting Information Systems 12th Edition by Marshall B. Romney
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Page 2
Chapter 1: Accounting Information Systems: an Overview
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Q1) Which of the following is not a key decision to be made when starting a business?
A) How to estimate the allowance for uncollectible accounts
B) Whether to advertise on TV, radio, or newspaper
C) How to raise capital
D) Whether to accept American Express
Answer: A
Q2) Define an accounting information system.
Answer: An AIS is a system that collects,records,stores,and processes data to produce information for decision makers.
Q3) Transaction cycles can be summarized on a high level as "give-get" transactions.An example of "give-get" in the revenue cycle would be
A) give cash, get goods.
B) give goods, get cash.
C) give cash, get labor.
D) give cash, get cash.
Answer: B
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3
Chapter 2: Overview of Transaction Processing and Erp Systems
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Q1) Describe the basic cycles and business activities for a typical merchandising company.
Answer: Revenue cycle deliver inventory to customers and collect cash.Expenditure cycle receive goods and services from vendors and pay cash.Human resources cycle track hours worked by employees and record withholding data.
Q2) Which of the following documents would be found in the expenditure cycle?
A) delivery ticket
B) time card
C) credit memo
D) purchase order
Answer: D
Q3) Documents that are sent to customers or suppliers and then sent back to the company in the course of a business transaction are known as
A) turnaround documents.
B) source documents.
C) source data automation.
D) transaction documents.
Answer: A
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Chapter 3: Systems Documentation Techniques
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Sample Questions
Q1) Which symbol would be used in a flowchart to represent the display of a report on a computer screen?
A) #1
B) #2
C) #3
D) #11
Answer: C
Q2) Discuss the ways in which information professionals interact with documentation tools and the various levels of understanding necessary.
Answer: At a minimum,a professional should be able to read documentation.A professional may also be called upon to evaluate internal control system documentation in order to identify control strengths and weaknesses or recommend improvements.A professional may be engaged to prepare documentation,which requires the greatest amount of skill and understanding of a particular system.
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Chapter 4: Relational Databases
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Questions
Q1) Dana Halsey is chair of the Purebred Marmoset Society,which maintains a database of registered purebred marmosets and their breeding history.One table will store the name,birth date,and other characteristics of all of the marmosets that have been registered.Each marmoset is uniquely identified by a registration number.A second table will contain data that link each marmoset to its male and female parents by means of their registration numbers.The primary key in the first table is:
A) name
B) birth date
C) a foreign key in the second table.
D) the primary key in the second table.
Q2) Reports produced using the data dictionary could include all of the following except a list of
A) programs where a data item is used.
B) synonyms for the data items in a particular file.
C) outputs where a data element is used.
D) the schemas included in a database.
Q3) What are the basic requirements when logically designing a relational database model?
Q4) Explain the relational database data model.
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Chapter 5: Computer Fraud
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Q1) Computer fraud is often much more difficult to detect than other types of fraud because
A) perpetrators usually only steal very small amounts of money at a time, thus requiring a long period of time to have elapsed before they're discovered.
B) massive fraud can be committed in only seconds, leaving little or no evidence.
C) most perpetrators invest their illegal income rather than spend it, thus concealing key evidence.
D) most computer criminals are older and are considered to be more cunning when committing such a fraud.
Q2) Why is computer fraud on the rise?
Q3) All of the following could lead to computer fraud except
A) allowing computer operators full access to the computer room.
B) releasing data to unauthorized users.
C) allowing computer users to test software upgrades.
D) storing backup tapes in a location where they can be quickly accessed.
Q4) What are the actions recommended by the Treadway Commission to reduce the possibility of fraudulent financial reporting?
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Chapter 6: Computer Fraud and Abuse Techniques
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Q1) A fraud technique that allows a perpetrator to bypass normal system controls and enter a secured system is called
A) superzapping.
B) data diddling.
C) using a trap door.
D) piggybacking.
Q2) 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.This guy in a delivery uniform came up behind me carrying a bunch of boxes.I opened the door for him,he nodded and went on in.I didn't think anything of it until later.Then I wondered if he might have been
A) pretexting.
B) piggybacking.
C) posing.
D) spoofing.
Q3) Describe at least four social engineering techniques.
Q4) How can a system be protected from viruses?
Q5) Describe at least six computer attacks and abuse techniques.
Q6) Describe the differences between a worm and a virus?
Page 8
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Chapter 7: Control and Accounting Information Systems
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Q1) A computer operator is allowed to work as a programmer on a new payroll software project.Does this create a potential internal control problem?
A) Yes, the computer operator could alter the payroll program to increase her salary.
B) Yes, this is a potential problem unless the computer operator is supervised by the payroll manager.
C) No, ideal segregation of duties is not usually possible, and operators are often the best at programming changes and updates.
D) No, as long as the computer operator separately accounts for hours worked in programming and in operations.
Q2) The audit committee of the board of directors
A) is usually chaired by the CFO.
B) conducts testing of controls on behalf of the external auditors.
C) provides a check and balance on management.
D) does all of the above.
Q3) Explain why management's philosophy and operating style are considered to be the most important element of the internal environment.
Q4) Discuss four reasons why AIS threats are increasing.
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Chapter 8: Information Systems Controls for System
Reliability Part 1: Information Security
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Q1) Meaningful Discussions is a social networking site that boasts over a million registered users and a quarterly membership growth rate in the double digits.As a consequence,the size of the information technology department has been growing very rapidly,with many new hires.Each employee is provided with a name badge with a photo and embedded computer chip that is used to gain entry to the facility.This is an example of a(an)
A) authentication control.
B) biometric device.
C) remote access control.
D) authorization control.
Q2) The security technology that evaluates IP packet traffic patterns in order to identify attacks against a system is known as
A) an intrusion prevention system.
B) stateful packet filtering.
C) static packet filtering.
D) deep packet inspection.
Q3) Explain the value of penetration testing.
Q4) Identify three ways users can be authenticated and give an example of each.
Q5) Explain social engineering.
Q6) Describe four requirements of effective passwords . Page 10
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Chapter 9: Information Systems Controls for Systems
Reliability Part 2: Confidentiality and Privacy
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Q1) Which of the following is not associated with asymmetric encryption?
A) No need for key exchange
B) Public keys
C) Private keys
D) Speed
Q2) Which of the following is not one of the 10 internationally recognized best practices for protecting the privacy of customers' personal information?
A) Providing free credit report monitoring for customers
B) Inform customers of the option to opt-out of data collection and use of their personal information
C) Allow customers' browsers to decline to accept cookies
D) Utilize controls to prevent unauthorized access to, and disclosure of, customers' information
Q3) Information encrypted with the creator's private key that is used to authenticate the sender is
A) asymmetric encryption.
B) digital certificate.
C) digital signature.
D) public key.
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Chapter 10: Information Systems Controls for Systems
Reliability Part 3: Processing Integrity and Availability
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Sample Questions
Q1) The best example of a hash total for a payroll transaction file could be
A) total of employees' social security numbers.
B) sum of net pay.
C) total number of employees.
D) sum of hours worked.
Q2) The maximum amount of time between backups is determined by a company's
A) recovery time objective.
B) recovery point objective.
C) recovery objective.
D) maximum time recovery objective.
Q3) User reviews are an example of a(n)
A) data entry control.
B) data transmission control.
C) output control.
D) processing control.
Q4) Check digit verification is an example of a(n)
A) data transmission control.
B) output control.
C) processing control.
D) input control.
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Chapter 11: Auditing Computer-Based Information Systems
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Q1) An auditor examines all documents related to the acquisition,repair history,and disposal of a firm's delivery van.This is an example of collecting audit evidence by A) confirmation.
B) reperformance.
C) vouching.
D) analytical review.
Q2) Regarding program modifications,which statement below is incorrect?
A) Only material program changes should be thoroughly tested and documented.
B) When a program change is submitted for approval, a list of all required updates should be compiled and then approved by management and program users.
C) During the change process, the developmental version of the program must be kept separate from the production version.
D) After the modified program has received final approval, the change is implemented by replacing the developmental version with the production version.
Q3) Audit tests and procedures traditionally have been performed on a sample basis.Do options exist for auditors to test significantly more (or all)transactions?
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Chapter 12: The Revenue Cycle: Sales to Cash Collections
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Q1) A company uses the method for tracking accounts receivable where customers pay according to individual sales invoices.This describes the ________ method.
A) monthly statement
B) open-invoice
C) balance forward
D) cycle billing
Q2) Which of the decisions below is not ordinarily found as part of the revenue cycle?
A) What credit terms should be offered?
B) How often should accounts receivable be subjected to audit?
C) How can customer payments be processed to maximize cash flows?
D) What are the optimal prices for each product or service?
Q3) During the sales order entry process,a ________ is performed to verify that each transaction record contains all appropriate data items.
A) completeness test
B) redundant data check
C) field check
D) reasonableness test
Q4) Describe the basic revenue cycle activities.
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Chapter 13: The Expenditure Cycle: Purchasing to Cash
Disbursements
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Q1) Identify ten threats and applicable control procedures in the expenditure cycle.
Q2) Under what conditions is MRP more suitable than JIT and vice versa?
Q3) All of the following are opportunities to improve efficiency of the accounts payable function except
A) use blanket purchase orders.
B) convert a manual AIS system to EDI and EFT.
C) streamline noninventory purchases.
D) use evaluated receipt settlement.
Q4) Requiring all packing slips be reconciled to purchase orders before accepting a delivery of inventory would be most likely to prevent which of the following situations?
A) A supplier delivers more inventory than ordered at the end of the year and sends an invoice for the total quantity delivered.
B) An employee mails a fake invoice to the company, which is then paid.
C) The inventory records are incorrectly updated when a receiving department employee enters the wrong product number on the receiving report.
D) Receiving department employees steal inventory and then claim the inventory was received and delivered to the warehouse.
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Chapter 14: The Production Cycle
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Q1) Describe five threats in the production cycle and the applicable control procedures used to mitigate each threat.
Q2) To reduce the threat of theft or destruction of inventories and other fixed assets,the organization may wish to implement which of the following controls?
A) review and approval of fixed asset acquisitions
B) improved and more timely reporting
C) better production and planning systems
D) document all movement of inventory through the production process
Q3) Clint Smith operates a machine shop in Burbank,California.He places bids on small lot production projects submitted by firms throughout the Los Angeles area.Which of the following is most likely to be a cost driver for the allocation of utility costs?
A) Number of units produced
B) Number of labor hours
C) Number of projects completed
D) Sales revenue
Q4) What are the two major types of cost accounting systems and what are the differences between the two?
Q5) Explain what CIM means and its benefits.
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Chapter 15: The Human Resources Management and Payroll Cycle
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Q1) What is the purpose of a general ledger payroll clearing account?
A) to check the accuracy and completeness of payroll recording and its allocation to cost centers
B) to make the bank reconciliation easier
C) to make sure that all employees are paid correctly each week
D) to prevent the cashier from having complete control of the payroll cycle
Q2) The payroll transaction file would contain
A) entries to add new hires.
B) time card data.
C) changes in tax rates.
D) All of the above are correct.
Q3) In the payroll system,checks are issued to
A) employees and to banks participating in direct deposit.
B) a company payroll bank account.
C) government agencies.
D) All of the above are correct.
Q4) Explain benefits to companies and to employees of using electronic direct deposit for payroll.
Q5) Why are accurate cumulative earnings records important?
Q6) Describe benefits and threats of incentive and bonus programs. Page 18
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Chapter 16: General Ledger and Reporting System
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Q1) Which of the following are appropriate controls for the general ledger and reporting system?
A) using well-designed documents and records
B) online data entry with the use of appropriate edit checks
C) prenumbering documents and accounting for the sequence numbers
D) All of the above are appropriate.
Q2) The benefits of XBRL include:
A) organizations can publish financial information only once, using standard XBRL tags.
B) tagged data is readable and interpretable by computers, so users don't need re-enter data into order to work with it.
C) Both are benefits of XBRL.
D) Neither are benefits of XBRL.
Q3) Who provides the adjusting entries for a well-designed general ledger and reporting system?
A) various user departments
B) the treasurer's area
C) the other major AIS subsystems
D) the controller's area
Q4) Explain the purpose of a journal voucher file.
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Chapter 17: The Rea Data Model
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Q1) The minimum cardinality of a relationship in an REA diagram can be either
A) 0 or 1.
B) 0 or N.
C) 1 or N.
D) none of the above
Q2) Which of the following is not one of the rules in creating an REA data model?
A) Each event is linked to at least one resource that it affects.
B) Each event is linked to at least one other event.
C) Each event is linked to at least two participating agents.
D) All of the above are important rules.
Q3) The "give" event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization's stock of an economic resource.
C) reduces the organization's stock of a resource that has economic value.
D) none of the above
Q4) The "get" event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization's stock of an economic resource.
C) reduces the organization's stock of a resource that has economic value.
D) none of the above
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Chapter 18: Implementing an Rea Model in a Relational Database
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Q1) Explain the five rules for drawing integrated REA diagrams.
Q2) Integrating separate REA diagrams developed for individual transaction cycles into a single,comprehensive enterprise-wide data model
A) is possible.
B) requires understanding what the cardinalities in each separate diagram reveal about the organization's business policies and activities.
C) provides a single comprehensive enterprise-wide model of the organization.
D) All of the above are true.
Q3) Much of the information about an organization's assets that is traditionally recorded in ledgers is stored in ________ tables in an REA-based relational database.
A) Account
B) Agent
C) Event
D) Resource
Q4) Explain a completeness check.
Q5) What are the advantages of the REA data model over the traditional AIS model?
Q6) Explain where in the REA model you can find the information normally found in a ledger.
Page 22
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Chapter 19: Special Topics in Rea Modeling
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Q1) In an REA diagram for the HR/Payroll cycle,the ________ relationship between Skills and Recruiting reflects the fact that one specific advertisement may list several specific skills and,over time,there may be several advertisements for one specific skill.
A) 1:1
B) 1:N
C) M:N
D) 0:N
Q2) The cardinality pair from the Financial Institution entity to the Cash resource has a ________ minimum and an ________ maximum because companies will probably only keep information about financial institutions with which they have accounts but may have more than one account at the same financial institution.
A) 0; N
B) 0; 1
C) 1; N
D) M; N
Q3) Why might an REA diagram show relationships between agents?
Q4) Why might an REA diagram show relationships between resources and agents?
Q5) Why is cost information stored in several relational tables?
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Chapter 20: Introduction to Systems Development Systems Analysis
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Q1) What is the role of the information systems steering committee?
A) It is a team of systems specialists, managers, accountants, and auditors that guides project development.
B) Since AIS development spans functional and divisional boundaries, an executive-level group is established to plan and oversee the IS function.
C) The group takes an active role in designing system controls and periodically monitoring and testing the system to verify the controls are implemented and functioning properly.
D) None of the descriptions above are appropriate.
Q2) Which planning technique does not show the relationships among various activities?
A) Gantt chart
B) PERT
C) the critical path method
D) VAN
Q3) What are some of the reasons why behavioral problems occur when a new AIS is introduced?
Q4) Describe economic feasibility analysis.What techniques are used in economic feasibility analysis?
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Chapter 21: Ais Development Strategies
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Q1) Which of the following were CASE tools not designed to do?
A) replace skilled designers
B) plan, analyze, design, program, and maintain an information system
C) automate important aspects of the software development process
D) enhance the efforts of managers in understanding information needs
Q2) Total costs are usually lower,and less time is required for vendor preparation and company evaluation,when requests for proposal are solicited based on A) exact equipment needs.
B) generalized software needs.
C) specific hardware and software specifications.
D) None of the above are correct.
Q3) Firms should consider preparing a software prototype if the application
A) will be used for a critical function like inventory management.
B) automates a structured task.
C) can be produced using outside developers.
D) inputs and outputs are not clearly defined.
Q4) What guidelines should be followed when contracting with an outside developer to create custom software?
Q5) Explain the concept of an application service provider.
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Chapter 22: Systems Design, implementation, and Operation
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Q1) Which of the following statements is true?
A) Structured programming divides programs into well-defined segments to reduce complexity.
B) Structured programming is used to debug logic errors in programs.
C) Structured programming is accomplished by using a flowchart to guide design.
D) Structured programming pieces together standard code strings into a completed program.
Q2) Which of the following activities is not part of data conversion?
A) changing data content
B) moving file servers
C) changing file formats
D) moving files to a new storage medium
Q3) Which of the following is not a reason for preparing the conceptual systems design report?
A) It can be used to guide physical systems design activities.
B) It communicates how management and user information needs will be met.
C) It discusses the design alternatives that were not selected for the project.
D) It helps the steering committee assess system feasibility.
Q4) Describe the eight basic steps in program design.
Q5) Describe structured programming.
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