Copyright Pearson Education Limited 2015.

1 Copyright © Pearson Education Limited 2015.Accounting Information Systems, 13e, Global Edition (Romney/Steinbart)

Chapter 1 Accounting Information Systems: An Overview

1.1 Distinguish data from information, discuss the characteristics of useful information, and explain how to determine the value of information.1) Which of the following statements below shows the contrast between data and information?

• Data is the output of an AIS.
• Information is the primary output of an AIS.
• Data is more useful in decision making than information.
• Data and information are the same.

Answer: B

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic

2) Information is best described as

• raw facts about transactions.
• data that has been organized and processed so that it is meaningful to the user.
• facts that are useful when processed in a timely manner.
• the same thing as data.

Answer: B

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic

3) The value of information can best be determined by

• its usefulness to decision makers.
• its relevance to decision makers.
• the benefits associated with obtaining the information minus the cost of producing it.
• the extent to which it optimizes the value chain.

Answer: C

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Analytic

4) An accounting information system (AIS) processes ________ to provide users with ________.

• data; information
• data; transactions
• information; data
• data; benefits

Answer: A

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic

Accounting Information Systems (Global Edition) 13e Marshall Romney Paul Steinbart (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

2 Copyright © Pearson Education Limited 2015.5) ________ information reduces uncertainty, improves decision makers' ability to make predictions, or confirms expectations.

• Timely
• Reliable
• Relevant
• Complete

Answer: C

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic

6) Information that is free from error or bias and accurately represents the events or activities of the organization is

• relevant.
• reliable.
• verifiable.
• timely.

Answer: B

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic

7) Information that does not omit important aspects of the underlying events or activities that it measures is

• complete.
• accessible.
• relevant.
• timely.

Answer: A

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic

8) Information is ________ when two knowledgeable people independently produce the same information.

• verifiable
• relevant
• reliable
• complete

Answer: A

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic 2 / 4

3 Copyright © Pearson Education Limited 2015.9) Data must be converted into information to be considered useful and meaningful for decision making. There are six characteristics that make information both useful and meaningful. If information is free from error or bias and accurately represents the events or activities of the organization, it is representative of the characteristic of

• relevancy.
• timeliness.
• understandability.
• reliability.

Answer: D

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytic

10) Inventory information is provided in real time by a firm's accounting information system.The accuracy of this information is questionable, however, since the production manager often reports stock outs of components that the system indicates are in stock. Which of the following characteristics of useful information is absent in the situation described above?

• relevant
• reliable
• complete
• timely
• understandable
• verifiable
• accessible

Answer: B

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Analytic

11) Cheryl Metrejean has been the controller of Downtown Tires for 25 years. Ownership of the firm recently changed hands and the new owners are conducting an audit of the financial records.The audit has been unable to reproduce financial reports that were prepared by Ms. Metrejean.While there is no evidence of wrongdoing, the auditors are concerned that the discrepancies might contribute to poor decisions. Which of the following characteristics of useful information is absent in the situation described above?

• relevant
• reliable
• complete
• timely
• understandable
• verifiable
• accessible

Answer: F

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Analytic 3 / 4

4 Copyright © Pearson Education Limited 2015.12) In 2003, Singh Manufacturing implemented a Web-based information system that allows all employees to access mission-critical information. The intention was to increase production efficiency. Unfortunately, it had the opposite effect, as deliveries fell behind schedule and costs increased. Shaman Gupta, the director of information technology services, asked Ashlee Wells to come in and talk with him about the system. Ashlee is a long-time employee of Singh, and her opinion is valued by her peers and by her supervisor."So Ashlee, how's it going down there in the shop?" "Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan production.Now, we got that computer system. Most of us can't figure out how to use it to do our jobs. Is there some way to print out a pick list?" Shaman thought for a while before responding. "Well, Ashlee, to tell you the truth, I'm not so sure how to do it myself, but there must be a way. We'll bring in the consultants that helped us build the system. Maybe they can help." Which of the following characteristics of useful information is absent in the situation described above?

• relevant
• reliable
• complete
• timely
• understandable
• verifiable
• accessible

Answer: E

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Analytic

13) Wisconsin Dells, Wisconsin, is a popular tourist destination. During the winter months, the population dwindles to a meager few, but when summer comes, the size of the town surges.Hunter Jackson is the town sanitation engineer. When the size of the town surges, so do his responsibilities. Among them is management of the sewage processing volume.In an interview with the local paper, Hunter complained that a report on tourist population that he uses to adjust processing volume refers to data that was collected four days ago and it takes him a week to make adjustments. Which of the following characteristics of useful information is absent in the situation described above?

• relevant
• reliable
• complete
• timely
• understandable
• verifiable
• accessible

Answer: D

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Analytic

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