Question

Multiple Choice Questions

1.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.

2.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

3.An accounting information system is defined by the text as a set of three interrelated elements. Which of the following choices best gives an 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

4.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

5.Which of the following best fits the definition of an accounting information system explained in the text?

A. A checkbook register

B. A publicly-traded corporation's financial statements

C. Processed source documents leading to the general purpose financial statements

D. An Excel spreadsheet of financial statement ratios

6.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

7.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 the required monthly payment is an example of "information," as the term is used in the definition of an accounting information system and the five-year note payable would be considered a "technology" if it were prepared with computer software are true.

D. Neither the required monthly payment is an example of "information," as the term is used in the definition of an accounting information system nor the five-year note payable would be considered a "technology" if it were prepared with computer software is true.

8.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

9.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.

10.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.

Answer 1

1. Accounting information system are a set of two or more inter-related components which interect to acheive a goal.Accounting  information systems major function is to collect the data ,record the data ,store the data ,transform the data and make it available to the decision makers for decision making. An accounting information system  is a set of inter related activities,documents and technologies used to collect , record the data and transform it as information for decision makers.There will be many smaller  sub-sytems in Accounting information system which performs  their  specific functions like (production department) etc ..to acheive organizational goals.

Option-D i.e., Activities ,Documents, and technologies.

2.The components of an accounting informationsystem are designed to collect DATA and report INFORMATION. The Accounting information system first collects the data and then stores the data and finally transform that  data  into information so that management will use the information to analyze and make decisions.

Option-A  i.e., Data and Information

3.An Accounting information system is defined by the text as a set of three inter related elements.The best example which can be selected from the below choices are Buying inventory,

Sales invoice,general ledger software.Buying inventory is an activity, sales invoice is a document and general ledger software is a  technology.

Option -B i.e.,  Buying inventory, Sales invoice , general ledger software.

 The other options are not  including either  the technology  or the document in there combination.

4..An accounting information system transforms input into outputs via processes such as journalizing transactions and posting them to the ledger.After the process we get the desired results in the form of cash flow statement ,income statement etc.

option A i.e., Journalizing transactions and posting them to the ledger.

5.An Accounting information system transforms inputs (Source documents) into Outputs(general purpose financial statements) through processes (Journalizing transactions and posting them to the ledger).

Option C .i.e., Processed source documents leading to the general purpose financial statements.

6.The financial statements and information about checks ,receipts and invoices serve banks as Documents and Data.Their financial stabillity and ability to pay information is analysed from the documents and data

Option-A. Documents and Data

7.In the above case  the five year notes payable is an information and not the  technology.But this is being mentioned as technology in other options except A which correctly tells us that the required monthly payment is an example of "information" as the term is used in the definition of an accounting information system.

option A i.e, the required monthly payment is an example of "information" as the term is used in the definition of an accounting information system?

8. 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.

Option-D i.e,It can be considered  as an input  ,output and as a document.

9. 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

Option B.Yes, because all elements of the definition are present.

In the above case, he collected information about his income and expenses which was earlier recorded as input from different source documents.He then use software i.e, technology  for tax return filing .This all clearly satisfies the definition of Accounting information system.

10. 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 ?

Option D. Yes, because all elements of the definition are present or implied.