Introduction to Accounting Information Systems
Final Exam
Course Introduction
Introduction to Accounting Information Systems explores the fundamental concepts, technologies, and applications of information systems within the accounting environment. The course covers the design, implementation, and management of accounting systems, emphasizing how these systems help organizations record, process, and report financial information efficiently and securely. Students will learn about the relationship between accounting processes and information technology, the structure and function of accounting databases, internal controls, data security, and the use of accounting software. Practical examples and case studies demonstrate how information systems support decision-making, compliance, and business operations in todays dynamic financial landscape.
Recommended Textbook
Accounting Information Systems A Practitioner Emphasis 7th Edition by Cynthia
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D. Heagy
Chapter 1: Significance of Accounting Information Systems
and
the
Accountants Role
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Q1) Under the Sarbanes-Oxley Act of 2002, auditors are prohibited from providing any non-audit services to its clients.
A)True
B)False
Answer: True
Q2) Which of the following statements is not true?
A) An accounting system deals primarily with economic events that affect an organization's accounting equation.
B) Some accounting events may mature into accounting transactions while others may not.
C) Only accounting events that have matured into accounting transactions must be captured and reported by the accounting system.
D) Most accounting transactions result from an organization's day-to-day operations. Answer: C
Q3) What are the key components of an accounting information system?
Answer: The key components of an accounting information system are computer hardware, accounting software, and people.
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Chapter 2: Accounting Systems Documentation
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Q1) How should distribution of or access to documentation be handled?
A) Through multiple channels
B) Saved so that is can be a basis of comparison for future documentation development
C) On a need-to-know basis
D) None of the above
Answer: C
Q2) Which is not true about a level 0 data flow diagram?
A) It describes the entire system of interest on a sheet of paper.
B) It shows all the major processes, data stores, and external entities.
C) Each process can be exploded into subprocesses.
D) It can only accommodate up to a 10.0 level to ensure understandability.
Answer: D
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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Q1) What file in a computerized accounting system corresponds to a sub-ledger (such as accounts receivable) in a paper-based system?
A) Transaction file.
B) Master file.
C) Open file.
D) Reference file.
Answer: B
Q2) Which of the following statements is NOT correct?
A) In batch posting, the master and open file records are up to date only after posting is completed.
B) Batch posting is more expensive than real-time posting.
C) Batch posting is best done when there is no conflicting activity on the system.
D) With batch posting, a user can print a proof list of the transaction file before posting to try to catch errors.
Answer: B
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Chapter 4: Data Flows, Activities, and Structure of Accounting Systems
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Q1) It is possible for a transaction to be initiated by programmed instructions in a computer program.
A)True
B)False
Q2) Name one accounting system activity other than input data.
Q3) Which of the following is (are) true regarding transactions?
A) May be reported individually
B) May be reported as part of aggregate information
C) May be reported to external auditors only
D) A & B
E) B & C D
Q4) Output from the accounting system is reserved for internal users only.
A)True
B)False
Q5) What are the support activities of an accounting information system?
A) People, input, process
B) People, technology, input
C) People, technology, control
D) People, process, control
Page 6
Q6) What is one of the most common errors made when inputting data?
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Chapter 5: Reporting Process, Coding Methods, and Audit Trails
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Q1) Effective exception reporting depends on an accounting information system having the ability to do which of the following?
A) Sequence selected records based on the size of the differences between comparative account balances
B) Select records based on differences between current actual account balances and prior period actual account balances
C) Select records based on differences between actual account balances and the budgeted amount for those accounts
D) All of the above are important for effective exception reporting.
Q2) Which of the following formats would most likely eliminate reentry of data and significantly reduce reporting costs for a business?
A) Electronic spreadsheet
B) Electronic word processor
C) HTML
D) XBRL
Q3) Explain what is meant by bidirectional and multidimensional aspects of audit trails.
Q4) What numbers should NOT be used for unique reference identifiers?
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Chapter 6: Internal Control and Risk Assessment
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Q1) List some examples of things that would change the risk profile of an organization.
Q2) The Sarbanes-Oxley Act of 2002 requires that a publicly traded company's independent auditor report directly to the audit committee.
A)True
B)False
Q3) What does (5) represent?
A) Total cost
B) Loss area
C) Cost of controls
D) Level of assurance
E) Optimal point of reasonable assurance D
Q4) Why do organizational objectives stress the importance of quality information?
A) Quality information is required for accounting systems to operate effectively.
B) Investors, creditors, managers, and other users rely on this information.
C) The organization's reputation depends on the output of quality information.
D) External auditors insist that the information provided them be of high quality.
Q5) Provide some examples of risks to accounting information systems.
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Chapter 7: Control Activities
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Q1) What kind of reasonable assurance do check digits, screen properties, and reasonableness tests provide?
A) Processing has been performed as intended without omission or double counting of transactions.
B) Only authorized persons have access to files.
C) Data have been correctly entered.
D) Coding of data internal to the computer did not change when the data were moved from one internal storage location to another.
Q2) Duties that should be segregated are authorization of transaction and other events, custody of assets, and modification or creation of related data and program files.
A)True
B)False
Q3) Disaster recovery plans should include all of the following EXCEPT:
A) An alternative means to continue processing after disaster.
B) A strong audit trail for all transactions.
C) Required employee training and periodic testing of the plan.
D) All of the above should be included in the disaster recovery plan.
Q4) Describe the process of cryptography using private and public keys.
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Chapter 8: The Financial Process
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Q1) Why is the time-sensitive entries feature useful?
Q2) Which of the following is a part of the financial process?
A) Inventory management
B) Sales order processing
C) Budget preparation
D) Vendor invoicing
Q3) Define the following: chart of accounts, credit rating, FOB point, picking list.
Q4) In accounting software packages, what is the equivalent term for accounts in a subsidiary ledger?
A) Master accounts
B) Modules
C) Sub-accounts
D) Normal accounts
Q5) The most significant conceptual difference between manual and computerized accounting systems is that in the computerized financial process, the vast majority of transactions are first recorded in other processes and then transferred to the financial process.
A)True
B)False
Q6) What are the three types of transactions recorded in the financial process?
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Chapter 9: The Revenue Process
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Q1) Standing orders represent an application of the recurring entry concept.
A)True
B)False
Q2) Which of the following actions result from a pledge (with agreement to pay) to a non- profit organization?
A) A receivable is recorded.
B) The cash receipts transaction file increases by one record.
C) A purchase order is generated.
D) The open invoice file record is closed.
Q3) Which of the following is an action resulting from the "receipt of cash" trigger in a sales- support organization?
A) Adding to the open customer invoice file.
B) Creation a sales transaction file record.
C) Creation of a cash receipts transaction file record.
D) Collection of transaction-based query information.
Q4) List five of the six actions that result from a shipment notification (shipment to a customer) in a merchandising or manufacturing organization.
Q5) Why is preparing an aging schedule for balance forward accounts more difficult than for open item accounts?
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Chapter 10: The Purchasing Process
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Q1) Discuss two of the risks associated with the procurement of vendor goods and services.
Q2) Recording a payable after the invoice is matched with other documents requires which journal entry?
A) Debit to cash; credit to accounts payable
B) Debit to accounts payable; credit to unbilled payables
C) Debit to unbilled payables; credit to cash
D) Debit to unbilled payables; credit to accounts payable
Q3) What is the most voluminous task in the purchasing process?
A) Accounts payable data entry
B) Purchase order data entry
C) Cash payments data entry
D) Receiving data entry
Q4) List and explain the activities in the purchasing process.
Q5) What is a unique aspect of vendor maintenance?
A) Add a new vendor
B) 1099 tasks
C) Deactivate a vendor
D) Tax Form 1099
Q6) Describe some factors which may complicate competitive bidding.
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Chapter 11: The Inventory Process
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Q1) Which of the following is a leading supply chain management system?
A) Great Plains
B) Manugistics
C) ACCPAC
D) MAS90
Q2) List three of the four tasks that supply chain management systems can perform.
Q3) The maximum stocking level equals the economic order quantity.
A)True
B)False
Q4) List and discuss some reports that are used to help manage the inventory process.
Q5) Discuss the benefits and risks of outsourcing that should be considered before enlisting a third party service provider.
Q6) Which of the following is NOT a reason for outsourcing?
A) Lower labor costs overseas.
B) Quality of the component will not decrease.
C) Loss of jobs in the home country.
D) Higher levels of technical knowledge in the third-party service provider's country.
Q7) Discuss various activities in the inventory process.
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Chapter 12: Database Structure of Accounting Systems
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Q1) Which of the following statements about the internal level of a database is true?
A) It is the physical implementation of the conceptual level.
B) It includes the file organizations to store data on the physical storage devices.
C) It is the way all the data in the entire database are viewed logically.
D) A and B, but not C
E) B and C, but not A D
Q2) The earliest computerized accounting systems used conventional files that separated accounting data into dependent files.
A)True
B)False
Q3) In an accounting system that uses a database, the application programs interact with the data stored in the database rather than with the database management system.
A)True
B)False
Q4) What are the three ways in which a user can interface with a database management system?
Q5) 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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Q1) For an accounting system to be successful, only the system's developers and the organization's accountants must actively participate in developing the database for the accounting system.
A)True
B)False
Q2) Which of the following data elements are called repeating data elements in an invoicing application?
A) Product number, product description, invoice number, customer code
B) Product number, product description, unit sales price, quantity sold
C) Product number, unit sales price, invoice date, quantity sold
D) Product number, unit sales price, customer city, customer code
Q3) What are the steps required to develop a relational database for an accounting system using the system output approach?
Q4) 6 Accounting information system activities are the events according to the REA framework.
A)True B)False
Q5) Briefly summarize the steps required to develop a database for an accounting system using the REA framework approach.
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Chapter 14: Electronic Business
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Q1) Identify the three approaches to support EDI over the Internet and briefly describe each one.
Q2) Which of the following web assurance services assures the consumer that the site is genuine and not a "spoof" site?
A) TRUSTe
B) VeriSign
C) BBB OnLine
D) WebTrust
E) SysTrust B
Q3) Companies are rapidly moving their EDI transaction to the Internet because this approach is much less expensive while providing the same level of security as value-added networks.
A)True
B)False
Q4) How can companies that use e-commerce prevent repudiation?
A) Incorporate firewalls in their systems
B) Make payments using electronic funds transfer
C) Create audit trails by logging message transmissions
D) Use digital signatures
Q5) Identify at least two benefits of EDI.
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Chapter 15: Ais Selection and Implementation
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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) With parallel conversion, the old system is stopped and the new system is started.
A)True
B)False
Q3) If you buy an AIS system directly from a developer, you may have more ability to negotiate than if you buy from a VAR.
A)True
B)False
Q4) Newer AIS software products will have a greater number of "bugs" than older products.
A)True B)False
Q5) Most accounting VARs handle only one to three accounting software packages. A)True
B)False
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