160 test bank for accounting information systems 10th edition

160 Test Bank for Accounting Information Systems 10th
Edition

Multiple Choice Questions-Page 1
A(n. ________ is a group of loosely-connected companies that
work together to maximize the value of their economic
outputs.
1.

A. extended enterprise

2.

B. enterprise resource planners

3.

C. enterprise suite

4.

D. value chain consortium

The technological philosophy that emphasizes "customer
satisfaction" to the point of "customer obsession" is
known as
1.

A. TQP.

2.

B. EDI.

3.

C. TQM.

4.

D. TQP and TQM.

________ involves the process of ensuring the suite of
organization's applications work together as a composite
application according to the goals and objectives of the
organization.
1.

A. Applications requirements planning

2.

B. Enterprise application structure

3.

C. Enterprise resource planning

4.

D. Applications architecture

The preparation of forecasts and analyses used by management
in planning and controlling the operations of the
organization is generally a(n.
1.

A. budgeting function.

2.

B. tax planning function.

3.

C. accounting manager function.

4.

D. treasurer function.

The fundamental benefits of information technology for AISs
include the following except
1.

A. communication.

2.

B. information organization.

3.

C. systems development.

4.

D. automation.

Material requirements planning software assists management in
managing
1.

A. inventories.

2.

B. overhead.

3.

C. scheduling production.

4.

D. both inventories and scheduling production.

The three general phases of systems development projects and
the order in which they occur are
1.

A. systems design, systems implementation, and systems analysis.

2.

B. systems design, systems implementation, and systems auditing.

3.

C. systems design, systems analysis, and systems programming.

4.

D. systems analysis, systems design, and systems implementation.

Which of the following is not an objective of internal control as
a process?
1.

A. Reliability of financial reporting

2.

B. Accuracy of accounting information

3.

C. Compliance with applicable laws and regulations

4.

D. Effectiveness and efficiency of operations

Which of the following is not a benefit of electronic data
interchange (EDI.?
1.

A. Electronic mail messages are interpreted by humans.

2.

B. EDI eliminates paper.

3.

C. EDI saves time.

4.

D. EDI may allow for EFT payments to vendor accounts.

The staff position which would generally report to the treasurer
rather than to the controller is
1.

A. budgeting.

2.

B. accounts payable.

3.

C. credit manager.

4.

D. cost accounting.

When information levels within an organization are viewed as a
pyramid, strategic information is used primarily by
1.

A. lower-level management.

2.

B. top-level management.

3.

C. middle management.

4.

D. lower-level and middle management.

Which of the following is not a common transaction processing
cycle found in business organizations?

1.

A. Expenditure cycle

2.

B. Accounting cycle

3.

C. Production cycle

4.

D. Revenue cycle

Which systems permit the reprogramming of computers to
produce entirely different products in the same
manufacturing facility with the same equipment?
1.

A. MRP and MRP II

2.

B. CIMs and FMSs


3.

C. ESs and FMSs

4.

D. ERPs and MRPs

The international quality-management standard credited for
promoting the process management approach is the
1.

A. Six Sigma.

2.

B. ISA-95.

3.

C. ISO 9001.

4.

D. ISA-Y2K.

The transaction processing cycle that is concerned with the
events related to the transformation of resources into
goods and services is
1.

A. production.

2.

B. revenue.

3.

C. financial reporting.

4.

D. expenditure.

Which of the statements below is false regarding extensible
business reporting language (XBRL.?
1.

A. Many experts feel that XBRL will replace EDI.

2.

B. XBRL is in effect a narrower standard than the ANSI X.12 standard for EDI.

3.

C. The SEC allows use of the XBRL format.

4.

D. XBRL facilitates the exchange of business documents over the Internet.

The following are benefits of an ERP except for the ability
1.

A. to eliminate data duplication and redundancy.

2.

B. to standardize data formats.

3.

C. to easily share data from various departments.

4.

D. to easily customize software to meet company needs.

A system that manages all contacts with customers is a
________ system.
1.

A. customer value chain


2.

B. customer relation management

3.

C. customer supply chain management

4.

D. customer requirements planning

Which of the following transaction processing cycles concerns
events related to the distribution of goods and services to
other organizations and the collection of related
payments?
1.

A. Production

2.

B. Expenditure

3.

C. Financial reporting

4.

D. Revenue

What language facilitates business to business commerce
through the extended value chain, which includes both
manufacturers and their suppliers?

1.

A. VCML

2.

B. XBRL

3.

C. HTML

4.

D. COBOL

The area of functional specialization which is responsible for
the design, coding, testing, and debugging of computer
programs is the
1.

A. technical support function.

2.

B. user function.

3.

C. operations function.

4.

D. programming function.

Information retrieval from the organization's database using the
query language feature of DBMS is a common
1.

A. programming function.

2.

B. technical support function.

3.

C. EUC application.


4.

D. ES application.

From an organization's viewpoint, a distinction can be drawn
between the following two broad classes of accounting
information
1.

A. historical and future.

2.

B. strategic and operational.

3.

C. internal and external.

4.

D. mandatory and discretionary.

The functional subsystem of a management information system
that would likely obtain data on wage and payroll tax
summaries, benefit information, and government
regulations is called the
1.

A. human resources information system.

2.

B. manufacturing information system.

3.

C. financial information system.

4.

D. marketing information system.

A group of individual software applications designed to run in
web browsers and facilitated through a service oriented
architecture (SOA. is referred to as a(n.
1.

A. ERP II.

2.

B. application architecture.

3.

C. value chain application suite.

4.

D. enterprise application suite.

A complete systems solution involving one software package
and one database is referred to as
1.

A. ERP.

2.

B. MRP.

3.

C. SCM.

4.

D. DSS.


The high-level executive who supervises accounting functions
such as budgeting, billing, and payroll is known as the
1.

A. treasurer.

2.

B. controller.

3.

C. chief information officer.

4.

D. chief internal auditor.

A(n. ________ system encompasses the planning and

management of all activities involved in sourcing,
procurement, conversion, and logistics management
activities.
1.

A. CRM

2.

B. SCM

3.

C. DS

4.

D. ES

Which of the following is not a consumer benefit of Web
commerce?
1.

A. There is no waiting for a salesperson or product information.

2.

B. There is automatic electronic encoding of transaction data.

3.

C. Web-based transactions are encrypted providing security.

4.

D. Intelligent Web-based software can provide answers to complicated questions.

The term that best describes an information system that is
tailored to the strategic information needs of top-level
management is a/an
1.

A. accounting information system.

2.

B. expert system.

3.

C. executive information system.

4.

D. EDP system.

Which item listed below is not considered a primary business
process?
1.

A. Marketing


2.

B. Outbound sales logistics

3.

C. Technology development

4.

D. Service

The internal audit function within an organization should be
considered a(n.
1.

A. activity supervised by the controller.

2.

B. sub function of the treasurer.

3.

C. independent appraisal activity.

4.

D. optional service provided by the firm's external auditors.

Groups of organizations working together to create new
products, new process methods, and/or human capital
intelligence is referred to as a(n.
1.

A. ERP.

2.

B. e-commerce.

3.

C. collaborative commerce.

4.

D. application consortium.

Which of the following is not an example of a common
functional MIS subsystem?
1.

A. Decision support system

2.

B. Marketing information system

3.

C. Manufacturing information system

4.

D. Human resources information system

64 Free Test Bank for Accounting Information Systems
10th Edition by Bodnar Multiple Choice QuestionsPage 2
Which of the following is used to ensure a high-degree of user
involvement in the control of an information systems
department?
1.

A. Maintenance programmers

2.

B. Operations manager


3.

C. Technical support committee

4.

D. Steering committee

Which of the steps below is not part of the systems approach
process?
1.

A. Creation of alternatives

2.

B. Statement of system objective(s.

3.

C. Systems evaluation

4.

D. All of the answers are steps in the systems approach process.

When a management report is discretionary rather than
mandatory, the primary consideration should be:
1.

A. that there are benefits to be obtained by producing the report

2.

B. that the benefits obtained by producing the report exceed the cost of its production

3.

C. to minimize the cost of producing the report while maintaining minimum standards of
usefulness

4.

D. to minimize the cost of producing the report while maintaining minimum standards of
reliability and accuracy

The Clearing House Automated Payment System is also known
as
1.

A. FedWire.

2.

B. CHIPS.

3.

C. CHAPS.

4.

D. EFT.

RFID tags include all of the following except
1.

A. active tags.

2.

B. passive tags.

3.

C. inactive tags.

4.

D. semi-passive tags.


An organization's internal control process consists of how
many elements?
1.

A. Six

2.

B. Four

3.

C. Five

4.

D. Seven

Which of the following is not an objective of internal control?
1.

A. Reliability of financial reporting

2.

B. Effectiveness and efficiency of operations

3.

C. Relevance of financial statements

4.

D. Compliance with applicable laws and regulations

Which of the following information characteristics pertains to
the situation when a lower-level manager receives a welldefined, narrowly focused report, while a top-level
manager receives a report covering more general topics?
1.

A. level of aggregation

2.

B. time horizon

3.

C. scope

4.

D. required accuracy

A company known for its use of blueprints in systems design
for clients is:
1.

A. SAM

2.

B. SAP

3.

C. SAS

4.

D. SAR

A report prepared exclusively for use by this group is almost
always mandatory:

1.

A. the company's labor union

2.

B. the Internal Revenue Service

3.

C. the company's main bank


4.

D. the company's main supplier of its raw materials

When viewing a typical organization chart, the individual
responsible for the finances of the business is the
1.

A. controller.

2.

B. president.

3.

C. vice president.

4.

D. treasurer.

When should the actual users of a system be involved when a
new system is being developed?
1.

A. As soon as the new system is implemented

2.

B. After all unexpected bugs and glitches have been found and corrected

3.

C. Only after all employees have been thoroughly trained to use the new system

4.

D. Throughout the design of the new system

The following are EDI standards except
1.

A. ANSI X.12.

2.

B. AS2.

3.

C. eBXML.

4.

D. ISO-95.

Which of the following is not associated with lean
manufacturing?
1.

A. CRM

2.

B. Toyota Production System

3.

C. Eliminating waste

4.

D. JIT

Software that integrates business processes on a companywide basis is called:
1.

A. Enterprise Resource Planning

2.

B. Executive information systems

3.

C. Expert systems


4.

D. Manufacturing information systems

Internal users of reports from a company's information system
might include all of the following except its:
1.

A. chief executive officer

2.

B. stockholders

3.

C. payroll department

4.

D. lower-level managers

Which of the following is not one of the criteria of the design
specification step of the systems approach to design?
1.

A. Using a team approach in many cases

2.

B. Sufficient detailed specifications for implementation process

3.

C. Identification of system inputs

4.

D. Strategies for producing system outputs

Which of the following is not an objective of a design group or
project team charged with creating and implementing a
new information system?
1.

A. Securing funding for a new information system

2.

B. Identifying needs to be satisfied by a new system

3.

C. Developing technical specifications for a new system

4.

D. Implementation of a new system

An important quick response technology used to track objects
using radio signals is called
1.

A. sonic tagging.

2.

B. radio frequency identification.

3.

C. object frequency tagging.

4.

D. frequency waves identification.

Which of the following is not a merchant benefit of Web

commerce?
1.

A. Cost savings through automated ordering

2.

B. Worldwide availability of the company's products


3.

C. No waiting in line for a salesperson or to obtain product information

4.

D. Low overhead

Which of the following is not an example of good internal
control?
1.

A. Having adequate records

2.

B. Being sure that everyone clearly understands his or her own responsibilities

3.

C. Making sure that each department is responsible for keeping its own accounting
records

4.

D. Having periodic physical checks (or counts. of the inventory

Which of the following groups would not be considered external
users of the company's information?
1.

A. factory supervisors

2.

B. creditors

3.

C. investors

4.

D. labor unions

Which officer, department, or division within an organization is
responsible for monitoring the other departments to
ensure that the organization's policies and procedures
are being carried out?
1.

A. Internal auditing

2.

B. Vice President for Administration

3.

C. Chief Information Officer

4.

D. A steering committee

Green IT is concerned with
1.

A. reducing e-waste by reusing and or refurbishing IT products.

2.

B. using less fuel in the creation of IT systems.

3.

C. designing more efficient systems in order to reduce necessary storage
requirements.

4.

D. Green IT is concerned with all of the above.


Which of the following specialized information systems would
be the most useful in providing information for routine
decisions?
1.

A. Decision support system

2.

B. Expert system

3.

C. Executive information system

4.

D. Accounting information system

The exchange of business documents such as purchase orders
and invoices in an electronic format between the
computers of separate organizations is known as:
1.

A. e-mail

2.

B. electronic data interchange

3.

C. computer-integrated information system

4.

D. electronic document exchange

A way of viewing company activities that breaks the activities
down into components that can be individually optimized
in terms of goals and strategies is known as the:
1.

A. primary business process

2.

B. accounting information system

3.

C. value chain

4.

D. internal control process

An accounting information system plays a key role in the
internal control process, thereby helping management
with its major responsibility of:
1.

A. managing the internal audit function

2.

B. stewardship

3.

C. global-level marketing

4.

D. managing the production cycle


In the systems approach to administering a systems project,
which of the following phases should be performed first?
1.

A. Creating alternatives

2.

B. Analyzing the system

3.

C. Implementing the system

4.

D. Stating the system's objectives

Which statement regarding internal control is false?
1.

A. Documentation is not a critical component of an internal control system.

2.

B. Ideally, a task can be divided to make job functions as natural checks on each other.

3.

C. A specific person should ideally be responsible for each task or job function.

4.

D. All records should allow cross-referencing from one area of responsibility to another.


True-False Questions
Systems programmers usually report to the Manager of
Systems Analysis.

1.

True

2.

False

XBRL is a language that facilitates the exchange over the
Internet of all kinds of business documents and financial
statements.
1.

True

2.

False

EDI is a key component to quick-response technology system.
1.

True

2.

False

MRP and MRP II software was created to aid in Supply Chain
Management (SCM..

1.

True

2.

False

In CIM systems, computers control management designed parts
of the manufacturing process.
1.

True

2.

False

A typical CRM contains one common database in which all
departments with customer contact can access and
update.
1.

True

2.

False

Operational transaction cycles have traditionally grouped
activities of a business into six common operational
processes.
1.

True

2.

False

The basic goal of accounting information systems is to convert
financial data into information.
1.

True

2.

False

The philosophy that one should do the right thing the first time
is better known as TQM or TQP.
1.

True

2.

False

ERPs are inexpensive and relatively easy to implement.
1.

True

2.

False

Flexible manufacturing systems can be reprogrammed to
produce entirely different products.
1.

True

2.

False

Lean manufacturing focuses on eliminating waste from the
entire value chain.
1.

True

2.

False

DBMS is the hands-on use of computers by end users.
1.

True

2.

False


Personal computers give end users their own processing
power.
1.

True

2.

False

The AIS benefits of information technology include automation,
information organization, and communication.
1.

True

2.

False

Some organizations that use computers to process
transactional data must have an information system
function.
1.

True

2.

False

Information system specialists are used in the traditional
approach to data processing for end users.
1.

True

2.

False

The director of internal auditing should report directly to the
controller of the company.
1.

True

2.

False

Most batch processing environments are JIT environments.
1.

True

2.

False

Only active RFID tags transmit signals containing digital
information to receivers.
1.

True

2.

False


A decision support system (DSS. is tailored to the strategic
information needs of top-level management.
1.

True

2.

False

Accounting information systems are designed to gather and
utilize information which may cost more to provide than it
is worth to the user.
1.

True

2.

False

AIS application architecture currently focuses on automating
the traditional accounting cycle.
1.

True

2.

False

The treasurer is responsible for the budgeting and tax planning
aspects of a business.
1.

True

2.

False

The accounting and finance functions should not be segregated
in order to increase a company's internal control.
1.

True

2.

False

Examples of the information provided by a financial information
system are cash flow summaries and payment
information.
1.

True

2.

False

Procurement and firm infrastructure are examples of primary
business processes.
1.

True

2.

False

RFID tags are used for tracking objects within a quick-response
system.
1.

True

2.

False

ERPs should reduce data duplication, increase communication
between functional areas, and reduce complications of
software updates.
1.

True

2.

False

An extended enterprise brings suppliers and customers
together in order to meet customer demand while
minimizing supplier costs.
1.

True

2.

False

The process management approach aids in the management
and improvement of a company's processes in order to
increase customer satisfaction while ignoring the
company's cost structure.
1.

True

2.

False

A system is a collection of related resources designed to help a
company achieve specified objectives.
1.

True

2.

False

Business processes are always triggered by some economic
event, and all have clearly defined starting and ending

points.
1.

True

2.

False


The operations function allows specialization in areas such as
operating systems and software and communications
technology.
1.

True

2.

False

Green IT states system design should include a plan for
recycling and reusing system components.
1.

True

2.

False

The SEC requires that all companies must file their financial
reports electronically using XBRL.
1.

True

2.

False

A key characteristic and benefit of business processes is that
they are always limited to one functional area of the
information system.
1.

True

2.

False

A typical CRM contains one database for each department
which has customer contact.
1.

True

2.

False

FedWire is a retail EFT system used for telephone wire transfers
and payments.
1.

True

2.

False


A steering committee consists of high-level members of user
functions such as manufacturing and marketing, as well
as the head of the information system function and
several of his or her staff.
1.

True

2.

False

E-waste refers to dollars spent on unsuccessful
implementations and technologies.
1.

True

2.

False

ERP II adds an Enterprise Application Suite (EAS. to aid in the
communication between functional areas.
1.

True

2.

False

The functional components of a management information
system (such as marketing, manufacturing, human
resources, and financial. are logically independent.
1.

True

2.

False

Analyzing a company's value chain aids in the identification of a
company's competitive advantages.
1.

True

2.

False

All data processed and information stored in an accounting
information system are mandatory for financial reporting
purposes.
1.

True

2.

False

ANSI X.12 is a public EDI standard.
1.

True


2.

False

A just-in-time manufacturing system is one form of lean
manufacturing.
1.

True

2.

False

An information center is a support facility for end users in an
organization.
1.

True

2.

False

Microsoft sponsors the Web TrustTM seal of approval to certain
web sites that meet their security and integrity criteria.
1.

True

2.

False

Electronic data interchange (EDI. is the direct computer-to-enduser exchange of business documents via a
communications network.
1.

True

2.

False

ERPs can either be industry-specific or based around "best
practices" of various sized companies.
1.

True

2.

False

Transactions are used by auditors to verify account balances
and internal controls.
1.

True

2.

False

External users of accounting information include investors,
customers, governmental agencies, and suppliers.
1.

True


2.

False

Good documentation means that records should be maintained
by all parties involved in a transaction.
1.

True

2.

False


Free Text Questions
The linking of applications in suite is facilitated through a
________.
Answer Given

service oriented architecture (SOA.

Describe an enterprise resource planning system to include the
pros and cons of this type of system.
Answer Given

Suggested answer: ERP provide a complete solution by combining various functional
information systems under one software package and one database. This eliminates
data redundancy, aids a company in pursuing "best practices," and functional areas
operating with the same data elements with the ability to share information seamlessly.
In an effort to implement an ERP, most companies will not pursue "best practices" as
defined by the ERP software, therefore customization is typical. This dramatically
increases costs, adds to implementation time, and increases the chance of failure.
Enterprise application suite may provide a solution for companies not ready to commit
to implementing a complete ERP.

The source for most information used by lower-level managers
is largely ________.
Answer Given

internal

Enterprise ________ suite uses a group of individual packages
that work with each other on a web browser as opposed
to one large ERP software package.
Answer Given

application

ERP II adds collaborative ________ to ERP.
Answer Given

commerce