Multiple Choice Questions

1-1 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Chapter 01 Role and Purpose of Accounting Information Systems Multiple Choice Questions

1.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.

2.The components of an accounting information system are designed to collect ___ and report ___.

• Data; information
• Data; data
• Information; information
• Information; data

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1-2 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

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?

• 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

4.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 to the cost-benefit constraint

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

• 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 2 / 4

1-3 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

• 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

• 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?

• 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 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.

• 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.

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1-4 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

• 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

• 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?

• 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.

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