50 Free Test Bank for Accounting Information Systems Basic Concepts and Current Issues 3rd Edition by Hurt

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Accounting information systems is an important area of study for future accountants because:

•  A.All organizations use information technology in their AIS.
•  B. All organizations need an AIS.
•  C. Both A and B.
•  D. Neither A nor B.

Which of the following statements about AIS is most true?

•  A.Compared to introductory accounting, AIS is more likely to have problems with nondeterministic answers.
•  B. Compared to introductory accounting, AIS is less likely to have problems with nondeterministic answers.
•  C. Introductory accounting and AIS are equally likely to have problems with nondeterministic answers.
•  D. All problems in AIS have nondeterministic answers.

Claudia borrowed money from her bank, signing a five-year note payable. She then calculated the monthly payment needed to pay off the loan within three years. Based on the definition of an accounting information system provided in the text, the five-year note payable could be considered: (i) an input, (ii) an output, (iii) a document.

•  A.I and II only
•  B. I and III only
•  C. II and III only
•  D. I, II and III

VTR Corporation’s accounting information system recently reported the following information: Cost of goods sold, $1,500. Inventory, $15,000. Unearned service fees, $3,000. Service fees earned, $8,000. Which element of financial statements is not included in the preceding data?

•  A.Assets
•  B. Equity
•  C. Expense
•  D. Liabilities

Which of the following exemplifies “materiality” as the term is used in the FASB conceptual framework?

•  A.BCC Corporation purchased a $30 wastebasket with an expected useful life of 10 years. BCC charged the entire cost to expense in the period incurred.
•  B. Reported account balances in DPT Corporation’s financial statements are rounded to the nearest whole dollar.
•  C. Both A and B
•  D. Neither A nor B

The components of an accounting information system are designed to collect ___ and report ___.

•  A.Data, information
•  B. Data, data
•  C. Information, information
•  D. Information, data

April compiled checks, receipts and invoices, then entered them into Quickbooks. She printed out her financial statements and took them to the bank as documentation for a loan application. In that scenario, checks, receipts and invoices could be referred to as:

•  A.Documents and data
•  B. Data and information
•  C. Documents and information
•  D. Documents, data and information

AIS is an important area of study for future accountants because a well-designed AIS can respond to many elements of the conceptual framework. Which of the following statements about qualitative characteristics of accounting information is most true?

•  A.Reliability is more important than relevance.
•  B. Relevance is more important than reliability.
•  C. Reliability must sometimes be sacrificed to attain relevance.
•  D. Tradeoffs between relevance and reliability violate the cost-benefit constraint.

Accounting information systems is an important area of study for future accountants because a well-designed AIS can respond to many elements of the FASB Conceptual Framework. All of the following are parts of the conceptual framework except:

•  A.Principles of debit and credit
•  B. Objective of financial reporting
•  C. Elements of financial statements
•  D. Qualitative characteristics of accounting information

Claudia borrowed money from her bank, signing a five-year note payable. She then calculated the monthly payment needed to pay off the loan within three years. Which of the following statements is / are most true?

•  A.The required monthly payment is an example of “information,” as the term is used in the definition of an accounting information system.
•  B. The five-year note payable would be considered a “technology” if it were prepared with computer software.
•  C. Both A and B are true.
•  D. Neither A nor B is true.

Which of the following statements best demonstrates a similarity between AIS and other areas of study in accounting?

•  A.AIS is primarily concerned with numbers.
•  B. Communication skills are important in AIS.
•  C. Both A and B
•  D. Neither A nor B

AIS study sometimes involves questions with deterministic answers. Which of the following questions is most likely to have a deterministic answer?

•  A. How should a company record the purchase of supplies on account in its AIS?
•  B. In a corporation with sales of $100,000 annually, what dollar amount should be considered material?
•  C. Which processing tools should the AIS use?
•  D. Has the conceptual framework achieved the FASB’s original objective for developing it?

An accounting information system is defined by the text as a set of three interrelated elements. Which of the following choices best gives example of each element?

•  A.Buying inventory, selling inventory, balance sheet
•  B. Buying inventory, sales invoice, general ledger software
•  C. Selling inventory, sales invoice, balance sheet
•  D. Selling inventory, writing a check, general ledger software

An accounting information system is a set of interrelated:

•  A.Activities and documents only.
•  B. Activities and technologies only.
•  C. Documents and technologies only.
•  D. Activities, documents and technologies.

Which of the following statements about AIS is most true?

•  A.The topics studied in an AIS course are unrelated to those in other accounting courses.
•  B. AIS is the only area of accounting that involves questions with nondeterministic answers.
•  C. The five generic elements of an AIS can be discussed in other areas of accounting.
•  D. All of the above statements are true.

AIS is an important area of study for future accountants because a well-designed AIS can respond to many elements of the conceptual framework. Which of the following statements is most true?

•  A.Land is reported as an asset on the balance sheet; assets are one element of financial statements in the conceptual framework.
•  B. The difference between land’s current market value and its historical cost is reported as a gain on the income statement; gains are one element of financial statements in the conceptual framework.
•  C. Because of the secondary qualitative characteristic of consistency, publicly traded corporations cannot change their accounting methods.
•  D. Because of the primary qualitative characteristic of reliability, publicly traded corporations cannot change their accounting methods.

An accounting information system transforms inputs into outputs via processes such as:

•  A.Journalizing transactions and posting them to the ledger
•  B. Identifying the elements of the FASB Conceptual Framework
•  C. Always utilizing information technology
•  D. Recognizing and adapting to the cost-benefit constraint

Which of the following best explains why AIS is an important area of study for future accountants?

•  A.AIS is the only area of accounting where students learn about information technology.
•  B. AIS is the only area of accounting where students learn about the FASB Conceptual Framework.
•  C. Both A and B
•  D. Neither A nor B

AIS is an important area of study for future accountants because a well-designed AIS can recognize and adapt to the cost-benefit constraint. Which of the following statements is most true?

•  A.Nonfinancial costs and benefits are less important than financial costs and benefits in designing an AIS.
•  B. Resistance to change is a potential cost when making changes to the AIS.
•  C. Financial statement users benefit from more information when it comes from the AIS.
•  D. Source documents should be electronic, rather than paper-based, because electronic documents are more cost effective.

Eugene is a self-employed business owner. In February 2011, he gathered together his income and expense records for 2010. He used them, along with appropriate software, to prepare his tax return, which he then transmitted to the Internal Revenue Service. Has Eugene used an accounting information system based on the definition provided in the text?

•  A.Yes, because he used software to prepare his tax return.
•  B. Yes, because all elements of the definition are present.
•  C. No, because all accounting information systems must produce general purpose financial statements
•  D. No, because no internal decision maker is mentioned.

AIS is an important area of study for future accountants because a well-designed AIS can respond to many elements of the conceptual framework. Which of the following best pairs an element of the conceptual framework with a specific example of that element?

•  A.Relevance, land reported at historical cost
•  B. Consistency, land reported at historical cost
•  C. Matching, land is not depreciated
•  D. Gain, difference between historical cost and current market value for land used in operations

Joe has completed all his accounting coursework and is ready to graduate. In his education, he has learned how to: analyze source documents, use Excel, make journal entries and prepare tax returns. Which generic element of the AIS is missing from that list?

•  A.Inputs
•  B. Outputs
•  C. Storage
•  D. Processes

The vice president for customer service of First United Bank determined that Lee had overpaid his mortgage. The bank sent Lee a letter asking him if he wanted a refund of the overpayment or if he wanted to apply it to future mortgage payments. Has the vice president for customer service used an accounting information system based on the definition provided in the text?

•  A.No, because no mention is made of software.
•  B. No, because the letter does not constitute an output.
•  C. No, because no mention is made of general purpose financial statements.
•  D. Yes, because all elements of the definition are present or implied.