AIS Final Exam Review Questions Extensive with

AIS Final Exam Review Questions (Extensive) with Complete Solutions

An accounting information system is a set of interrelated:

• Activities and documents only
• Activities and technologies only
• Documents and technologies only
• Activities, documents, and technologies - Correct Answer D) Activities, documents, and

technologies The components of an accounting information system are designed to collect ______ and report

_______.

• Data, information
• Data, data
• Information, information
• Information, data - Correct Answer A) Data, information

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?

• Buying inventory, selling inventory, balance sheet
• Buying inventory, sales invoice, general ledger software
• Selling inventory, sales invoice, balance sheet
• Selling inventory, writing a check, general ledger software - Correct Answer B) Buying inventory,

sales invoice, general ledger software An accounting information system transforms inputs into outputs via processes such as:

• Journalizing transactions and posting them to the ledger
• Identifying the elements of the FASB Conceptual Framework
• Always utilizing information technology
• Recognizing and adapting tot he cost-benefit constraint - Correct Answer A) Journalizing

transactions and posting them to the ledger Which of the following best fits the definition of an accounting information system explained in the text? 1 / 3

• A checkbook register
• A publicly-traded corporation's financial statements
• Processed source documents leading to the general purpose financial statements
• An Excel spreadsheet of financial statement ratios - Correct Answer C) Processed source

documents leading to the general purpose financial statements 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:

• Documents and data
• Data and information
• Documents and information
• Documents, data, and information - Correct Answer A) Documents and data

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 the most true?

• The required monthly payment is an example of "information," as the term is used in the

definition of an accounting information system.

• The five-year note payable would be considered a "technology" if it were prepared with computer

software

• Both A and B are true
• Neither A nor B is true - Correct Answer A) The required monthly payment is an example of

"information," as the term is used in the definition of an accounting information system.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.

• I and II only
• I and III only
• II and III only
• I, II, and III - Correct Answer D) I, II, and III 2 / 3

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

• Yes, because he used software to prepare his tax return.
• Yes, because all elements of the definition are present.
• No, because all accounting information systems must produce general purpose financial

statements.

• No, because no internal decision maker is mentioned - Correct Answer B) Yes, because all

elements of the definition are present.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 over-payment 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?

• No, because no mention is made of software.
• No, because the letter does not constitute an output
• No, because no mention is made of general purpose financial statements
• Yes, because all elements of the definition are present - Correct Answer D) Yes, because all

elements of the definition are present or implied Accounting information systems is an important area of study for future accountants because:

• All organizations use information technology in their AIS
• All organizations need an AIS
• Both A and B
• Neither A nor B - Correct Answer B) All organizations need an AIS

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:

• Principles of debit and credit
• Objective of financial reporting
• Elements of financial statements
• Qualitative characteristics of accounting information - Correct Answer A) Principles of debit and

credit

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