Introduction to Accounting Systems
Question Bank
Course Introduction
Introduction to Accounting Systems provides a comprehensive overview of the methods and technologies organizations use to collect, process, and report financial information. The course explores the design, implementation, and control of accounting information systems, emphasizing their role in supporting business operations and decision-making. Topics include transaction cycles, internal controls, database management, and the use of accounting software. Students will also examine current trends such as cloud-based accounting and cybersecurity concerns. Through theoretical learning and practical exercises, this course equips students with foundational skills necessary to analyze and work effectively with modern accounting systems.
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Accounting Information Systems 11th Edition by Marshall B. Romney Paul J. Steinbart
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Chapter 1: Accounting Information Systems
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Q1) Budgeting and human resource practices are examples of
A)operational control
B)management control
C)strategic planning
D)tactical planning
Answer: B
Q2) In Chapter 1,shows the factors that influence the design of AIS.The diagram shows a bi-directional arrow between the organizational culture and the AIS.The reason for this two-way interchange between organizational culture and AIS is
A)that the AIS should not influence the values of the organizational culture.
B)because the organization's culture influences the AIS,and likewise the AIS influences the organization's culture by controlling the flow of information within the organization.
C)due to the transfer of managers between the two corporate elements.
D)the AIS impacts the organization's key strategies.
Answer: B
Q3) Define the concept of a system.
Answer: A system is a set of two or more components that are somehow interrelated and interact together to achieve a specific goal.
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Chapter 2: Overview of Business Processes
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Q1) Basic data storage concepts define both entities and attributes.An entity is something about which information is stored.Which item below would not be considered an entity?
A)a customer address
B)a customer
C)an employee
D)an inventory item
Answer: A
Q2) Describe the purpose of subsidiary and control accounts.
Answer: A subsidiary ledger is used when many sub-accounts (such as customers or vendors)must be tracked in detail.These types of accounts are used frequently for accounts receivable and accounts payable applications.The control account gives the overall or total picture for the subsidiary accounts.The control account will show total balances only and must balance to the sum of the individual detail amounts in the subsidiary accounts.
Q3) Name the major transaction cycles.
Answer: The major transaction cycles are revenue,expenditure,human resources (or payroll),production,and financing.
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Chapter 3: Systems Development and Documentation Techniques
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Q1) In the data flow diagram of the customer payment process,"Customer payment" will appear above or in
A)a square.
B)a circle.
C)two horizontal lines.
D)an arrow.
Answer: D
Q2) In a document flowchart of a manual payroll processing system,"update employee file" will be shown by a(n)__________ symbol,and "prepare payroll check" will be shown by a(n)__________ symbol.
A)input; output
B)input; manual operation
C)manual operation; output
D)manual operation; manual operation
Answer: D
Q3) P62 51)List the various types of flowcharts.
Answer: Document flowcharts,System flowcharts,Program flowcharts,Internal control flowcharts
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Chapter 4: Relational Databases
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Q1) Shandra Bundawi is a new graduate who has been hired by an old-line,family-owned furniture manufacturing company in the northeast.She has been asked to analyze the company's accounting information system and to recommend cost-effective improvements.After noting that the production and sales departments use database systems that are entirely separated,she recommends that they be combined.Implementation of her recommendation would benefit the company by contributing to data
A)independence.
B)integration.
C)redundancy.
D)qualifications.
Q2) What is the difference in logical view and physical view?
Q3) The problem of losing desired information from a database when an unwanted record is purged from the database is referred to as the __________ anomaly. A)purge
B)erase
C)delete
D)integrity
Q4) List the four languages used within a DBMS.
Q5) Describe the information that is contained in the data dictionary.
Page 6
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Chapter 5: Computer Fraud and Security
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Q1) In November of 2005 it was discovered that many of the new CDs distributed by Sony BMG installed software when they were played on a computer.The software was intended to protect the CDs from copying.Unfortunately,it also made the computer vulnerable to attack by malware run over the Internet.The scandal and resulting backlash was very costly.The software installed by the CDs is a
A)virus.
B)worm.
C)rootkit.
D)squirrel.
Q2) Why do fraudulent acts often go unreported and are therefore not prosecuted?
Q3) Characteristics connected with fraud include pressures,opportunities,and rationalizations.Of these characteristics,which one often stems from a lack of internal controls within an organization?
A)pressures
B)opportunities
C)rationalizations
D)none of the above
Q4) Why is computer fraud on the rise?
Q5) How can a system be protected from viruses?
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Chapter 6: Control and Accounting Information Systems
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Q1) What is a weakness of the internal control concept of the separation of duties?
Q2) The COSO control model has five crucial components.Which of the following is not one of them?
A)control environment
B)risk assessment
C)compliance with federal,state,or local laws
D)monitoring
Q3) The risk that exists before management takes any steps to control the likelihood or impact of a risk is
A)Inherent risk
B)Residual risk
C)Risk appetite
D)Risk assessment
Q4) Which of the following control classifications does not fit with the others listed below?
A)preventative
B)detective
C)administrative
D)corrective
Q5) What are the three functions of internal controls?
Page 8
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Chapter 7: Infromation System Controls for Systems
Reliability
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Q1) This is designed to identify and drop packets that are part of an attack.
A)Deep packet inspection
B)Intrusion prevention system
C)Stateful packet filtering
D)Static packet filtering
Q2) In developing policies related to personal information about customers,Folding Squid Technologies adhered to the Trust Services framework.The standard applicable to these policies is
A)security.
B)confidentiality.
C)privacy.
D)availability.
Q3) Asymmetric key encryption combined with the information provided by a certificate authority allows unique identification of
A)the user of encrypted data.
B)the provider of encrypted data.
C)both the user and the provider of encrypted data.
D)either the user or the provider of encrypted data.
Q4) Describe four requirements of effective passwords
Q5) What are the problems with symmetric encryption?
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Chapter 8: Auditing Computer-Based Information Systems
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Q1) The maximum acceptable down time after a computer system failure is determined by a firm's
A)recovery time objective.
B)recovery point objective.
C)recovery objective.
D)maximum time recovery objective.
Q2) The most important change management technique is probably
A)User rights and privileges are carefully monitored during change process.
B)Changes tested thoroughly prior to implementation.
C)All documentation is updated to reflect changes to the system.
D)Adequate monitoring and review by top management.
Q3) The Spontaneous Combustion Rocket Shoppe in downtown Fargo,North Dakota,generates three quarters of its revenue from orders taken over the Internet.The revenue clearing account is debited by the total of cash and credit receipts and credited by the total of storefront and Internet sales.This is an example of a
A)data integrity test.
B)zero-balance test.
C)trial balance audit.
D)cross-footing balance test.
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Chapter 9: Auditing Computer-Based Informtion Systems
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Q1) Practically all audits follow a similar sequence of activities that can be divided into four stages.Organizing the audit team and the physical examination of assets are components of which two separate audit stages?
A)audit planning; evaluation of audit evidence
B)audit planning; collection of audit evidence
C)collection of audit evidence; communication of audit results
D)audit planning only
Q2) What is the risk-based audit approach?
Q3) a)What is test data processing?
b)How is it done?
c)What are the sources that an auditor can use to generate test data?
Q4) Which of the following is the first step in the risk-based audit approach?
A)identify the control procedures that should be in place
B)evaluate the control procedures
C)determine the threats facing the AIS
D)evaluate weaknesses to determine their effect on the audit procedures
Q5) Name the different types of audits.
Q6) How and to whom does an auditor communicate the audit results?
Q7) List the types of risk possible when conducting an audit.
Q8) How is a financial audit different from an information systems audit?
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Chapter 10: The Revenue Cycle: Sales an Cash Collections
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Q1) In addition to the sales order entry process there are three other processes in the revenue cycle.Which of the following is not one of them?
A)shipping
B)billing
C)general ledger
D)cash collections
Q2) Laz Chance wears roller blades and headphones when he is at work at the Squishy Things Toy Company.He is a product packer.The headphones give him computer-generated instructions so he knows the location of each item and quantity that should be included in the order.These instructions are the equivalent of a
A)picking ticket.
B)bill of lading.
C)packing slip.
D)remittance advice.
E)credit memo.
Q3) What is cycle billing?
Q4) Name and briefly define the two types of accounts receivable systems.
Q5) a)Define revenue cycle.
b)What are the basic revenue cycle activities?
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Chapter 11: The Expenditure Cycle: Purchasing and Cash
Disbursements
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Q1) Identify ten threats and applicable control procedures for each process/activity in the expenditure cycle.
Q2) a)What is the major cost driver in the purchasing function?
b)How can information technology be used to control this cost driver?
Q3) The receiving clerk at Folding Squid Technologies examines incoming shipments and checks their purchase order numbers.A receiving report is then sent to accounts payable,where it is reconciled with the relevant purchase orders and invoices and payment is authorized.Which of the following would correct control weaknesses,if any,related to these activities?
A)Vendor invoices should be approved for payment by the shipping clerk after the purchase order and receiving report are reconciled.
B)Vendor invoices should be approved for payment by the purchasing manager.
C)Purchase orders and receiving reports should be reconciled by the purchasing manager.
D)Controls are adequate under the current system.
Q4) Name and describe the two common systems for approving vendor payments.
Q5) Under what conditions is MRP preferable to JIT and vice versa?
Q6) Briefly discuss the differences among EOQ,MRP,and JIT.
Q7) What is the EOQ approach? What are the components of EOQ?
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Chapter 12: The Production Cycle
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Q1) The AIS compiles and feeds information among the business cycles.What is the relationship between the revenue and production cycles regarding the exchange of information?
A)The revenue cycle provides sales forecast and customer order information to the production cycle,but the production cycle sends information back to revenue about finished goods production.
B)The revenue cycle receives information from the production cycle about raw materials needs.
C)The production cycle sends cost of goods manufactured information back to the revenue cycle.
D)The production cycle does not exchange information with the revenue cycle.
Q2) The second step in the production cycle is planning and scheduling.One of the methods of production planning is referred to as pull manufacturing.This method is also known as
A)manufacturing resource planning (MRP).
B)just-in-time manufacturing system (JIT).
C)the economic order quantity (EOQ)system.
D)ahead-of-time production implementation (ATPI).
Q3) Define the following: production order,materials requisition,and move ticket.
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Chapter 13: The Human Resources Managementpayroll Cycle
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Q1) Which type of payroll report contains information such as the employees' gross pay,payroll deductions,and net pay in a multicolumn format?
A)payroll register
B)deduction register
C)employee earnings statement
D)federal W-4 form
Q2) Which one of the following is most likely to be positively correlated with employee morale?
A)Turnover rate
B)Profitability
C)Defect rate
D)Overhead
Q3) When using electronic documents,__________ increase the accuracy of data entry.
A)access controls
B)separation of duties
C)general controls
D)application controls
Q4) Discuss the various types of input into an AIS HRM/payroll system.
Q5) What are some of the benefits of using incentives and bonuses? What are some dangers? Page 15
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Chapter 14: General Ledger and Reporting System
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Q1) Which of the following is the most common violation of the principles of good graph design?
A)Showing data in reverse chronological order
B)Starting the horizontal axis at a value other than zero
C)Starting the vertical axis at a value other than zero
D)Use of titles that do not accurately describe the data that is plotted on the graph.
Q2) The edit check that verifies the ending balance of an account in fact fully reflects the beginning balance and all debit and credit entries made thereafter is referred to as a A)run-to-run total.
B)completeness check.
C)closed loop verification.
D)zero balance check.
Q3) Which of the following techniques is not used in data mining?
A)statistical analysis
B)artificial intelligence
C)expert systems
D)neural networks
Q4) How is a balanced scorecard used to assess organizational performance?
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Chapter 15: Data Modeling and Database Design
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Q1) Developing an REA diagram for a specific transaction cycle consists of steps.The first step involves
A)Identifying events
B)Identifying agents
C)Identifying resources
D)Identifying cardinality
Q2) In an REA diagram,the pair of numbers next to each entity represents the cardinalities for the entity.The first number in the pair is known as
A)the minimum cardinality.
B)the maximum cardinality.
C)the x axis cardinality.
D)the y axis cardinality.
Q3) Events must be linked to at least one
A)Account
B)Agent
C)Entity
D)Resource
Q4) Explain how an AIS system can be viewed as a set of "give-to-get" exchanges.
Q5) Define cardinality.
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Chapter 16: Implementing an Rea Model in a Relational Database
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Q1) REA data modeling
A)Can be used only to model financial data.
B)Can provide accountants with a method for more easily adapting the AIS to respond to change.
C)Is an example of a traditional accounting concept.
D)Is just a fancy way of doing E-R diagramming.
Q2) The primary key for M:N relationship tables
A)Is a single attribute
B)Always consists of two attributes
C)Is the primary key of the most important entity linked to that relationship
D)Is impossible to determine
Q3) Which table is most likely to have a concatenated key?
A)customer
B)sales
C)customer-sales
D)none of the above
Q4) What is a concatenated key?
Q5) Explain where in the REA model you can find the information normally found in a ledger.
Q6) What are the advantages of the REA data model over the traditional AIS model? Page 19
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Chapter 17: Special Topics in Rea Modeling
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Q1) In the REA diagram for HRM/payroll cycles,the __________ entity is linked to almost every other entity in the diagram.
A)Employee
B)Job title
C)Payroll
D)Worker I.D.
Q2) Picking ticket number is most likely to be a primary key in:
A)Call on Customers
B)Fill Customer Order
C)Ship Order
D)Take Customer Order
Q3) Concerning the relationship between the Disburse Cash and Issue Stock events the minimum cardinalities are (respectively)
A)0;0
B)0;1
C)1;0
D)1;1
Q4) Describe the relationships between Recruiting event and Skills,and between Recruiting event and Job Applicants.
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Chapter 18: Introduction to Systems Development and Systems Analysis
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Q1) Continuing to use a manual system instead of the new AIS is a form of resistance known as
A)acceptance.
B)aggression.
C)avoidance.
D)projection.
Q2) The __________ method of gathering information helps to determine how a system actually works.
A)interview
B)observation
C)questionnaire
D)system documentation
Q3) Who makes up the project development team and what is the team's purpose?
Q4) Dysfunctional employee behavior in response to implementation of a new computerized information system is likely to be the result of
A)poor human resource policies.
B)lack of communication and training.
C)weak system controls.
D)inadequate compensation policies.
Q5) What are the objectives of a system survey?
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Chapter 19: Ais Development Strategies
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Q1) The reasons for __________ are to simplify the decision-making process,reduce errors,provide timesavings,and avoid potential disagreements.
A)leasing
B)outsourcing
C)prototyping
D)sending out a request for a proposal
Q2) Which is not a problem with CASE technology?
A)cost
B)incompatibility
C)lack of system documentation
D)unmet expectations
Q3) A help desk can encourage,support,coordinate,and control end-user activities.A help desk department may be organized with front-line and second-line analysts and technicians.What would be one duty of second-line help desk personnel?
A)handling complicated queries requiring research
B)provide callers with scripted answers
C)using expert systems to quickly find answers
D)None of the duties listed above pertain to second-line help desk personnel.
Q4) What is outsourcing? What are the different types of outsourcing agreements?
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Chapter 20: Systems Design, Implementation and Operation
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Q1) The method of system conversion that immediately terminates the old AIS then the new one is introduced is called _____ conversion.
A)direct
B)parallel
C)pilot
D)phase-in
Q2) Discuss controls design considerations in the physical systems design phase of the SDLC.
Q3) Who is responsible for evaluating the design alternatives and selecting the one that best meets the organization's needs?
A)design team
B)implementation committee
C)steering committee
D)systems analysts
Q4) Effective AIS training involves
A)instruction on new hardware and software.
B)orientation to new policies and operations.
C)planning and scheduling so it occurs before system testing and conversion.
D)All of the above are correct.
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