Exam 1: Rolse and Purpose of Accountig Information Systems

The "information" in an accounting information system should be: (i) timely, (ii) truthful, (iii) reliable.

Which of the following statements about accounting information systems is most true?

Which of the following is a fact about accounting information systems?

Which of the following accounting areas involves professional judgment: (i) accounting information systems, (ii) budgeting, (iii) choosing between FIFO and LIFO.

A fellow student in one of your classes struck up a conversation one day. "What's your major," he asked. "Accounting," you replied. "Wow I've heard accounting is a tough major. What accounting classes are you taking this term?" You started talking about your accounting information systems course, and your friend asked you the question(s) noted below. Prepare a written response for your friend. -You tell your friend about some of the topics you'll be studying this term in AIS: information technology, financial statements, internal control, business documents and decision making. "Information technology" is mentioned specifically in the definition of an accounting information system presented in the text; information technology can also be used as a processing tool. Relate the remaining four items (financial statements, internal control, business documents and decision making) to the definition of AIS.

Accounting information systems incorporate interrelated activities such as:

Outputs from an accounting information system include: (i) income statements, (ii) tax returns, (iii) decisions.

Studying accounting information systems is important because it helps future accountants develop critical thinking skills and professional judgment. Which of the following situations involves the use of professional judgment: (i) developing sales budgets, (ii) printing financial statements from a computer program, (iii) evaluating internal controls.

The cost/benefit constraint mentioned in the FASB conceptual framework is important in all areas of accounting. Which of the following is a cost that should be considered in many AIS tasks?

Evaluating sources of information - Bumble Beasley's accounting information systems professor assigned a paper on methods for safeguarding inventory. In his research, Bumble identified five sources of information, described in the table below: 1 2 3 4 5 Format Web page Practitioner journal Scholarly journal Consultant's report Textbook Date 2005 2004 2003 1998 2006 Author(s) Unknown Auditor Management professor Self-employed consultant CPA and accounting professor The assignment directions clearly state that Bumble may use no more than three sources for the paper, and Bumble has decided to use the University of Maryland evaluation criteria (authority, accuracy, objectivity, currency and coverage) as the basis for his selection. Which three of the five sources should Bumble use? For the other two sources, which University of Maryland criteria made them undesirable?

Sebastian wrote a check to pay a supplier's invoice. The check had to be signed by two company officers and was later part of a monthly bank reconciliation. The canceled check was filed under the supplier's name. -Filing the check under the supplier's name is an example of:

"Coverage" is one basis for evaluating Internet information in the list developed by the University of Maryland. Which of the following statements on a web site would cause you to question its coverage?

Documents in an accounting information system are:

Accounting information system definition - According to the text, an accounting information system is a set of interrelated activities, documents and technologies designed to collect data, process it and report information to a diverse group of internal and external decision makers in organizations. Consider that definition in light of the following scenario: A local video store purchases multiple copies of popular movies and television series by issuing electronic purchase orders. When the movies come in, a clerk fills out a receiving report and puts the movies on the shelves by category (e.g., all the comedies together). Each copy of each movie receives a bar code that identifies it for inventory purposes. When a client selects a movie to rent, a clerk scans the bar code; the company's information system updates its database. The client receives an invoice noting the title of the video, the rental date, the clerk's name and the due date. At the end of each month, the store manager downloads the rental and purchase information and transmits it to the store's accountant. The accountant prepares a monthly income statement, balance sheet and bank reconciliation and sends them back to the store within three days. The store manager reviews all three with the employees. Analyze the video store's accounting information system by identifying two examples of each item in the grid below. Record your answers in the spaces provided. Activities Data Decision makers Documents Information Technologies

A well-designed accounting information system recognizes and adapts to the cost-benefit constraint of the conceptual framework. Which of the following is most likely to violate the cost-benefit constraint?

Which type of information would be most useful in deciding whether or not to create a wireless network as part of an accounting information system?

AIS and other areas of accounting - Indicate whether each of the following statements regarding accounting information systems is (a) always true, (b) sometimes true or (c) never true. You do not need to write a justification for the statements that are sometimes true. 1. A well designed accounting information system can help fulfill some elements of the FASB Conceptual Framework. 2. Accounting information systems problems are often open-ended. 3. All areas of accounting can involve problems with deterministic responses. 4. All problems in accounting information systems involve every area of accounting. 5. Because many AIS problems don't have one right answer, those same problems don't have any wrong answers either. 6. Other areas of accounting, such as financial and managerial accounting, do not involve open-ended problems. 7. Problems in accounting information systems do not have deterministic responses. 8. Solutions to problems in AIS and other areas of accounting always involve the use of information technology. 9. The general-purpose financial statements link accounting information systems with other areas of accounting. 10. The study of internal controls can link accounting information systems with other areas of accounting.

In an accounting information system, "inputs" often come in the form of: