Ch. 1
1) Which of the following statements below shows the contrast between data and information?
A) Data is the primary output of an accounting information system.
B) Information is the primary output of an accounting information system.
C) Data is more useful in decision making than information.
D) Data and information are the same.
B) Information is the primary output of an accounting information system.
11) Identify the four parts of the transaction processing cycle.
A) data input, data storage, data processing, information output
B) data input, data recall, data processing, information output
C) data input, data recall, data transmission, information output
D) data input, data recall, data transmission, data storage
A) data input, data storage, data processing, information output
4) The passage of the Sarbanes Oxley Act
A) made documentation skills even more important.
B) requires public companies to prepare an annual internal control report.
C) mandates that auditors must be able to prepare, evaluate and read documentation tools such as flowcharts.
D) all of the above
D) all of the above
An accounting information system (AIS) processes ________ to provide users with ________.
A) data; information
B) data; transactions
C) information; data
D) data; benefits
A) data; information
2) A typical source document could be
A) some type of paper document.
B) a computer data entry screen.
C) the company's financial statements.
D) both A and B
D) both A and B
Premier Life Company is a life insurance company that collects, stores, prepares and provides customized life insurance policy to customers in the Midwest. When a customer's information is received, it is recorded in a database and a ticket is provided to the policy underwriter. When the life insurance policy is issued, the database is updated so that it always reflects the correct amount of life insurance coverage and the length of the policy available to the customers. In a data flow diagram, which type of symbol would be used to represent policy underwriters?
A) Square
B) Circle
C) Arrow
D) Two Horizontal Lines
A) Square
10) Information is ________ when two knowledgeable people independently produce the same information.
A) verifiable
B) relevant
C) reliable
D) complete
A) verifiable
17) The general ledger
A) summarizes the information on the trial balance.
B) is posted in total to the general journal.
C) only includes balance sheet accounts.
D) summarizes the transactions in journals.
D) summarizes the transactions in journals.
In a data flow diagram of the customer payment process, "Customer" will appear above or in
A) a square
Identify the primary reason that it is important for a firm to identify the AIS improvements likely to yield the greatest return.
A) because business strategy directly influences AIS, but not information technology
B) because most organizations have limited resources
C) because a firm never wants to waste time addressing issues that are not urgent
D) because it is expensive to improve accounting information systems
B) because most organizations have limited resources
Making payments to a vendor, with whom a credit line is already established, would be initially recorded in which type of accounting record and as part of what transaction cycle?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) cash disbursements journal; expenditure cycle
D) cash disbursements journal; expenditure cycle
30) Nancy Kempf has been hired by Andersen Manufacturing as a staff accountant in the internal audit department. She has been asked to thoroughly document the existing accounting information system in preparation for making recommendations for improvements. She decides to begin by meeting with the information technology staff in order to develop an understanding of the overall operation of the AIS, including data entry, storage, and output. The documentation tool that he should employ for this purpose is a
A) data flow diagram.
B) document flowchart.
C) system flowchart.
D) program flowchart.
C) system flowchart.
18) Which of the following is not an example of how an AIS adds value to an organization?
A) All employees at a hospital can access and update patient records from any computer terminal in the hospital.
B) A customer service representative can find a customer's account data, purchase history, payment history, and salesperson's name while on the phone with the customer, to resolve issues quickly.
C) Suppliers are able to access sales data directly from the point-of-sale system of a retailer and deliver inventory automatically when needed.
D) Client tax files are encrypted and made available on the CPA firm's network to any employee with an access code.
A) All employees at a hospital can access and update patient records from any computer terminal in the hospital.
46) Which of the following statements regarding special journals is not true?
A) The balances in a special journal must always reconcile to the general ledger.
B) Special journals are used to record large numbers of repetitive transactions.
C) Special journals are periodically summarized and posted to the general ledger.
D) Special journals provide a specialized format for recording similar transactions.
A) The balances in a special journal must always reconcile to the general ledger.
29) Nancy Kempf has been hired by Andersen Manufacturing as a staff accountant in the internal audit department. She has been asked to thoroughly document the existing accounting information system in preparation for making recommendations for improvements. She decides to begin by meeting with the information technology staff in order to develop an understanding of the computer programs used by the system. The documentation tool that he should employ for this purpose is a
A) data flow diagram.
B) document flowchart.
C) system flowchart.
D) program flowchart
D) program flowchart