BAC 416 Accounting Information System

Chapter 1
Multiple choice
1.

The flow and level of detail of information operations management, as internal user of information is
a. horizontal
b. vertical downward
c. vertical (upward & downward)
d. vertical upward

2.

An example of information exchanges with financial institutions, as an external stakeholder, is

a. stock transaction information
c. inventory receipts information
b. sales & billing information
d. sale of goods & services information

3.

A subsystem is called a system when it is

a. viewed in relation to the larger system of which it is a part
b. the focus of attention
c. able to achieve its goals
d. able to interact with the other system

4.

A system is said to have the ability to achieve its goal when

a. there is a convenient way of representing, viewing, and understanding the relationships among subsystems
b. all parts serve a common purpose
c. it can serve at least one purpose but it may serve several
d. there is an effective functioning and harmonious interaction of its subsystems

5.

This is processed by its information system as a unit of work.

a. financial transaction
b. transaction
c. nonfinancial transaction

d. resources

6.

AIS subsystems
a. process financial & nonfinancial transactions that directly affect the processing of financial transactions
b. measure economic events in monetary terms
c. process nonfinancial transactions
d. directly process financial transactions

7.

Which of the following is NOT a reason why transaction processing system is central to the overall function of the
information system?
a. Records financial transactions in the accounting records.
b. Converts economic events into financial transactions
c. Distributes essential financial transactions to operations personnel to support their daily operations.
d. Distributes essential financial information to operations personnel to support their daily operations.

8.

System is called a subsystem when it is

a. viewed in relation to the larger system of which it is a part
b. the focus of attention
c. able to achieve its goals
d. able to interact with the other system

9.

Variance reports are provided by a AIS subsystem called

a. MRS
b. MIS
c. AIS
d. IS

10. Purchase of inventory is an example of a data source, an element of the general model for AIS, which is an
a. internal financial transaction
c. internal nonfinancial transaction
b. external financial transaction
d. external nonfinancial transaction
11. It is an element of the general model for AIS and its objective is to ensure that event data entering the system are
valid, complete, and free from material errors.
a. data processing
b. database management
c. data sources
d. data collection

12. Efficient data collection procedures are designed to

a. ensure completeness of data entering into the system
b. provide reliance to the information being generated by the system
c. collect data only once
d. produce information needed for decision making
13. Relevant information possess qualities, one of which is
a. free from material error
c. validity
b. completeness
d. materiality
14. Which of the following is NOT a level in the data hierarchy?
a. file
b. attribute
c, data

d. record

15. Which of the following is NOT a fundamental task of database management?

a. deletion
b. storage
c. process
d. retrieval
16. An element of the general model for AIS and it can be an operation document.
a. feedback
b. data source
c. information generation
17. Which of the following is NOT an element of the general model for AIS?
a. information
b. end user
c. database management

d. data collection

d. data source

18. Which of the following is NOT a characteristic of information generation?

a. completeness
b. efficiency
c. relevance
d. accuracy
19. It is an element of the general model for AIS which is used to initiate or alter a process.
a. data collection
c. data source
b. database management
d. feedback
20. Which of the following is NOT an objective of information system?
a. To support the overall performance of management
b. To support the firms day-to-day operations
c. To support the stewardship function of management
d. To support management decision making
21. An example of MIS application for Production function.
a. job skill tracking system
c. warehouse organization & scheduling
b. capital budgeting system
d. job scheduling system
22. An example of MIS application for Distribution function.
a. production planning & control system
c. market analysis
b. capital budgeting system
d. warehouse organization & scheduling
23. They are systems customized to a specific industry.
a. vendor-supported systems
c. in-house systems
b. turnkey systems
d. backbone systems
24. How many ways are there in information systems acquisition?
a. three
b. two
c. five
d. four
25. The structure of an organization reflects the
a. flow and level of detail of information
b. levels of activity
c. distribution of responsibility, authority, and accountability throughout the organization
d. way to manage the operations of the organization
26. It is commercial software which is costly when customizing it.
a. backbone system
c. in-house system
b. turnkey system
d. vendor-supported system

27. In business function segment, functional areas are determined

a. according to the specialization of manpower
b. according to the flow of primary resource through the firm
c. according to the efficiency in managing the organization
d. according to the preference of management
28. Which of the following is NOT a type of activity in the production support (broad class of production, as a
business function)?
a. distribution
b. maintenance
c. quality control
d. production planning
29. Which of the following is NOT a function of Finance as a business function?
a. manages the financial resources of the firm through proper budgeting
b. manages the financial resources of the firm through banking activities
c. manages the financial resources of the firm through credit evaluation
d. manages the financial resources of the firm through portfolio management
30. Which of the following is not a key function of computer services as a business function?
a. data collection
b. data processing
c. database administrator
d. systems maintenance
31. Which of the following is NOT a significant problem in the flat file environment?
a. data retrieval
b. data updating
c. data storage
d. currency of information
32. Which of the following is NOT a sub-function of materials management?
a. distributing
b. stores
c. receiving
d. purchasing
33. It is a special software system that is programmed to know which data elements each user is authorized to
access.
a. DBMS
b. REA
c. ERP
d. CDP
34. Which of the following is NOT a traditional problem associated with the flat file approach that may be overcome
by the database model.
a. data processing
b. single update
c. current values
d. elimination of data
redundancy
35. One of the information system models which is a conceptual model, not a physical system.
a. REA
b. ERP
c. DBMS
d. flat file
36. One of the information system models that enables an organization to automate and integrate its key business
process.
a. REA
b. ERP
c. DBMS
d. flat file
37. Common ERP module.
a. plant maintenance
research

b. portfolio management

38. It is a function that is the single largest user of computer services.

a. marketing function
b. finance function

c. market research

d. product

c. accounting function

d. HR function

39. The accounting function in the systems design is responsible for the
a. physical system
b, application system
c. conceptual system
system
40. Auditing is a form of
a. IT auditing performed by an expert
b. Independent practitioner performed by an expert

d. information

c. independent assurance performed by an expert

d. independent attestation performed by an expert

41. Is intended to help people make better decisions by improving information.

a. attest function
b. It auditing
c. external auditing

d. assurance service

42. Which of the following is NOT a function of an internal auditor?

a. evaluates operation efficiency
b. reviews the organizations compliance with legal obligations
c. examines operations compliance with organizational policies
d. evaluates management performance
43. It is a business resource that is vital to the survival of the business.
a. system
b. management
c. financial transaction
44. Accounting systems are designed to
a. analyze and interpret information
b. allow managers to manage by exception
c. provide information required to support decisions

d. information

d. record and report business transactions

e. create database management systems

45. One of the ingredients of the primary quality of relevance is

a. verifiability
c. neutrality
b. predictive value
d. due process

e. representation faithfulness

46. Accounting information that users can depend on to represent the economic conditions or events that it purports
to represent best defines
a. relevance
c. feedback value
e. verifiability
b. timeliness
d. reliability
47. Accounting information that is capable of making a difference in a decision by helping users to confirm or correct
expectations best defines
a. neutrality
c. accuracy
e. relevance
b. timeliness
d. verifiability
48. One of the ingredients of the primary quality of reliability is
a. verifiability
c. timeliness
b. feedback value
d. comparability
49. A database is
a. essential for storage of large data sets
b. a collection of related files
c. a real-time system

e. consistency

d. a network of computer terminals

e. a task-oriented file system

50. When viewed from the highest to most elemental level, the data hierarchy is
a. attribute, record, file
c. file, record, attribute
b. record, attribute, key
d. file, record, key

e. key, record, file