ch01 Student 1 An accounting information system is a set of interrelated cid 10 cid 10 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 cid 10 cid 10 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 cid 10 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 cid 10 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 4 An accounting information system transforms inputs into outputs via processes such as cid 10 cid 10 5 Which of the following best fits the definition of an accounting information system explained in the text cid 10 cid 10 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 cid 10 A Documents and data B Data and information C Documents and information D Documents data and information cid 10 7 Claudia borrowed money from her bank signing a five year note payable She then calculated the cid 10 monthly payment needed to pay off the loan within three years Which of the following statements is are most true cid 10 A B C Both A and B are true D Neither A nor B is 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 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 cid 10 A I and II only B I and III only C II and III only D I II and III cid 10 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 cid 10 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 cid 10 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 cid 10 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 cid 10 11 Accounting information systems is an important area of study for future accountants because cid 10 cid 10 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 12 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 cid 10 A Principles of debit and credit B Objective of financial reporting C Elements of financial statements D Qualitative characteristics of accounting information cid 10 13 Which of the following best explains why AIS is an important area of study for future accountants cid 10 cid 10 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 14 AIS is an important area of study for future accountants because a well designed AIS can recognize and Nonfinancial costs and benefits are less important than financial costs and benefits in designing an AIS adapt to the cost benefit constraint Which of the following statements is most true cid 10 A 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 cid 10 15 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 cid 10 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 cid 10 16 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 cid 10 A B C D Land is reported as an asset on the balance sheet assets are one element of financial statements in the conceptual framework The difference between land s current market value and its historical cost is reported as a gain on the income