5.A balance sheet prepared in conformity with GAAP is an example of discretionary reporting.

© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permit- ted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Chapter 1—The Information System: An Accountant’s Perspective

TRUE/FALSE

1.Information is a business resource.

ANS: T PTS: 1

2.IT outsourcing is location-independent computing.

ANS: F PTS: 1

3.Transaction processing systems convert non-financial transactions into financial transactions.

ANS: F PTS: 1

4.Information lacking reliability may still have value.

ANS: F PTS: 1

5.A balance sheet prepared in conformity with GAAP is an example of discretionary reporting.

ANS: F PTS: 1

6.The Management Reporting System provides the internal financial information needed to manage a business.

ANS: T PTS: 1

7.Most of the inputs to the General Ledger System come from the Financial Reporting System.

ANS: F PTS: 1

8.When preparing discretionary reports, organizations can choose what information to report and how to present it.

ANS: T PTS: 1

9.Retrieval is the task of permanently removing obsolete or redundant records from the database.

ANS: F PTS: 1

10.Systems development represents 80 to 90 percent of the total cost of a computer system.

ANS: F PTS: 1

11.The database administrator is responsible for the security and integrity of the database.

ANS: T PTS: 1

Accounting Information Systems 9e James A. Hall (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

Accounting Information Systems, 9e – Test Bank, Chapter 1 © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permit- ted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

• Custom software is completely finished, tested, and ready for implementation.

ANS: F PTS: 1

• The internal auditor represents the interests of third-party outsiders.

ANS: F PTS: 1

• Information Technology (IT) audits can be performed by both internal and external auditors.

ANS: T PTS: 1

• Custom software is the most affordable systems development option.

ANS: F PTS: 1

• A database is a collection of interconnected computers and communications devices that allows users to

communicate, access data and applications, and share information and resources.

ANS: F PTS: 1

• Systems maintenance consumes the majority of a system’s total costs.

ANS: T PTS: 1

• Cloud computing is a practice in which the organization sells its IT resources to a third-party outsourcing

vendor then leases back IT services from the vendor for a contract period.

ANS: F PTS: 1

• A potential benefit of cloud computing is that the client firm does not need to know where its data are

bring processed.

ANS: F PTS: 1

• One of the greatest disadvantages of database systems is that all data is always available to all users.

ANS: F PTS: 1

• Under SOX legislation public accounting firms are no longer allowed to provide consulting services to

audit clients.

ANS: T PTS: 1

• One member of a company’s audit committee must be an independent CPA.

ANS: F PTS: 1

• / 4

Accounting Information Systems, 9e – Test Bank, Chapter 1 © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permit- ted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

MULTIPLE CHOICE

• Which of the following is not a business resource?
• raw material
• labor
• information
• all are business resources

ANS: D PTS: 1

• Which level of management is responsible for short-term planning and coordination of activities

necessary to accomplish organizational objectives?

• operations management
• middle management
• top management
• line management

ANS: B PTS: 1

• Which level of management is responsible for controlling day-to-day operations?
• top management
• middle management
• operations management
• executive management

ANS: C PTS: 1

• Location-independent computing in which shared data centers deliver hosted IT services over the Internet.
• IT outsourcing
• Network administration
• Cloud computing
• Custom software

ANS: C PTS: 1

• The value of information for users is determined by all of the following but
• reliability
• relevance
• convenience
• completeness

ANS: C PTS: 1

• An example of a nonfinancial transaction is
• sale of products
• cash disbursement
• log of customer calls
• purchase of inventory

ANS: C PTS: 1

• / 4

Accounting Information Systems, 9e – Test Bank, Chapter 1 © 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permit- ted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

• An example of a financial transaction is
• the purchase of computer
• a supplier’s price list
• a delivery schedule
• an employee benefit brochure

ANS: A PTS: 1

• Which subsystem is not part of the Accounting Information System?
• Transaction Processing System
• Expert System
• General Ledger/Financial Reporting System
• Management Reporting System

ANS: B PTS: 1

• The major difference between the Financial Reporting System (FRS) and the Management Reporting

System (MRS) is the

• FRS provides information to internal and external users; the MRS provides information to

internal users

• FRS provides discretionary information; the MRS provides nondiscretionary information
• FRS reports are prepared using information provided by the General Ledger System; the

MRS provides information to the General Ledger System

• FRS reports are prepared in flexible, nonstandardized formats; the MRS reports are

prepared in standardized, formal formats

ANS: A PTS: 1

• The purpose of the Transaction Processing System includes all of the following except
• converting economic events into financial transactions
• recording financial transactions in the accounting records
• distributing essential information to operations personnel to support their daily operations
• measuring and reporting the status of financial resources and the changes in those

resources

ANS: D PTS: 1

• The Transaction Processing System includes all of the following cycles except
• the revenue cycle
• the administrative cycle
• the expenditure cycle
• the conversion cycle

ANS: B PTS: 1

• The primary input to the Transaction Processing System is
• a financial transaction
• an accounting record
• an accounting report
• a nonfinancial transaction

ANS: A PTS: 1

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