Deck 1: Accounting As Information

Question 1

Accounting communicates to stakeholders

A) minimally required public financial data.
B) the financial outcomes of operating, investing, and financing activities.
C) the sales strategy for the operating, marketing, and sales activities.
D) black and white details about the economics of operating activities.

Answer 1

the financial outcomes of operating, investing, and financing activities.

Question 2

Accounting communicates the financial outcomes of a business's activities for

A) operating.
B) investing.
C) financing.
D) All of these answer choices are correct.

Answer 2

All of these answer choices are correct.

Question 3

In what way do management teams use accounting data?

A) Management teams use accounting data to make business decisions.
B) Management teams use accounting data to make and execute plans.
C) Management teams use economic and accounting data together to make decisions.
D) All of these answer choices are correct.

Answer 3

All of these answer choices are correct.

Question 4

Which statement is TRUE?

A) Accounting consists of rigid black and white rules.
B) Accountants crunch numbers, not make decisions.
C) Accounting helps support a prosperous society.
D) Accountants focus on debits and credits, not business activities.

Question 5

Input to an information system consists of

A) raw and unorganized data.
B) hardware and software.
C) reported information.
D) processed data.

Question 6

Which of the following is a definition of output from an information system?

A) Output is raw and unorganized data.
B) Output is information produced by processing data.
C) Output is database facts and figures.
D) Output is information collected from users.

Question 7

Which statement concerning data is TRUE?

A) Data is useless to a business until transformed into information.
B) Data is the output from an information system.
C) Data is organized into understandable formats.
D) Data is processed before being input into the information system.

Question 8

Which of the following activities would NOT result in a transaction in an accounting information system?

A) Sell goods to a customer on account
B) Purchase supplies on credit
C) Prepay for six months of insurance
D) Receive a customer order

Question 9

Which of the following activities results in a transaction an accounting information system?

A) Sell goods to a customer
B) Submit an order to a vendor
C) Create estimates for a customer
D) Receive a customer order

Question 10

A business model is

A) a company's plan for operations.
B) a company's plan for making a profit.
C) a company's plan for identifying customers.
D) a company's plan for production.

Question 11

What kind of business model should an entrepreneurial application developer consider for a new smartphone game that will allow users to pay for additional capabilities and/or lives during the game?

A) Franchise
B) Subscription
C) Freemium
D) Peer-to-peer

Question 12

Samantha's Soy Candles has built a retail location in a seasonally busy tourist town. Samantha has developed a scent of the month that she plans to market to customers as a once per month shipment. The shipment of these candles once per month could help Samantha during the slow months at her retail store. What kind of business model would Samantha employ for her new seasonal candle shipment business line?

A) Franchise
B) Subscription
C) Freemium
D) Peer-to-peer

Question 13

Fast-food chains that allow individuals to purchase and operate a location for that chain are operating under what kind of business model?

A) Franchise
B) Subscription
C) Freemium
D) Peer-to-peer

Question 14

What part of a business model includes using a company's profits to sponsor initiatives where the company and employees work to benefit the community?

A) Direct-to-consumer
B) Social responsibility
C) Investor relations
D) Peer-to-peer

Question 15

A ________ is a group of related business events designed to accomplish the business's strategic objectives.

A) business model
B) business operations
C) business process
D) conversion process

Question 16

What are the primary types of business processes in a basic business model?

A) Acquisition and Payment Processes
B) Conversion Processes
C) Marketing, Sales, and Collections Processes
D) All of these answer choices are correct.

Question 17

During what processes does a business add value by converting the resources into goods and services that a customer might want to purchase?

A) Acquisition and Payment Processes
B) Conversion Processes
C) Marketing, Sales, and Collections Processes
D) All of these answer choices are correct.

Question 18

Tina, Tammy, and Toni opened a Pizza Hut franchise in the suburbs of a major metropolitan area. Tina manages the team that takes orders and delivers pizzas. What process area demands most of Tina's focus?

A) Acquisition and Payment
B) Conversion
C) Marketing, Sales, and Collections
D) All of these answer choices are correct.

Question 19

Tina, Tammy, and Toni opened a Pizza Hut franchise in the suburbs of a major metropolitan area. Tammy manages the cash drawer, credit card reconciliation, and payroll. Which of the following type of business events is Tammy's to manage?

A) Operating events
B) Financing events
C) Investing events
D) All of these answer choices are correct.

Question 20

Which type of business event includes paying dividends and paying loan installments?

A) Operating events
B) Financing events
C) Investing events
D) Information events

Question 21

Which type of business event includes interviewing new applicants for employment?

A) Operating events
B) Financing events
C) Investing events
D) Information events

Question 22

Which type of business event includes buying and selling property?

A) Operating events
B) Financing events
C) Investing events
D) Information events

Question 23

Which of the following statements is FALSE?

A) Transaction-based accounting information systems record only accounting transactions.
B) Transaction-based accounting information systems ignore nonfinancial data.
C) Transaction-based accounting information systems are no longer used in business settings.
D) Transaction-based accounting information systems ignore the relationships between business events and processes.

Question 24

Transaction-based accounting systems capture only

A) nonfinancial data.
B) accounting business events.
C) relationships between business events and processes.
D) key performance indicators.

Question 25

What is management's first task before a business can begin operations?

A) Produce products
B) Create a marketing plan
C) Obtain needed resources
D) All of these answer choices are correct.

Question 26

Which of the following is an input for a business that produces products?

A) Raw materials
B) Production line employees
C) Manufacturing equipment
D) All of these answer choices are correct.

Question 27

Which transaction would be recorded in a transaction-based accounting information system?

A) Ordering raw materials
B) Hiring an employee
C) Obtaining a loan
D) Receiving goods

Question 28

Which transaction would NOT be recorded in a transaction-based accounting information system?

A) Ordering raw materials from a vendor
B) Purchasing office supplies online
C) Selling goods to a customer
D) Paying employees via direct deposit

Question 29

Which of the following accounting data components is an acquisition and payment process?

A) Expenditures
B) Payroll
C) Financing
D) All of these answer choices are correct.

Question 30

Which of the following accounting data components is an acquisition and payment process?

A) Production
B) Revenue
C) Financing
D) All of these answer choices are correct.

Question 31

Which statement about the conversion process is FALSE?

A) Businesses create value by combining and converting resources to goods and/or services.
B) The conversion process includes the acquisition of resources.
C) The conversion process includes regulatory compliance.
D) Businesses create value by being innovative and efficient in their processing.

Question 32

A popular fast-food chicken restaurant currently offers only fried chicken tenders and chicken sandwiches made from chicken tenders. The only sides available are bread, slaw, and fries. If the chain were to consider offering grilled chicken on their menu, what would you recommend before considering the change for a national roll-out?

A) Determine the kitchen layout and process changes required.
B) Test the new product on customers in a small group of restaurants.
C) Plan and test the new production process.
D) All of these answer choices are correct.

Question 33

What additional data could be captured during the conversion processes to help corporate management improve business efficiency or effectiveness?

A) Quality testing data
B) Downtime data
C) Waste data
D) All of these answer choices are correct.

Question 34

Which of the following benefits may arise from management evaluating conversion process data captured by a process-based accounting information system?

A) Reduced downtime
B) Reduced employee turnover
C) Increased customer satisfaction
D) Increased customer engagement

Question 35

Juan is opening a taco truck. Juan has asked that you review his plans and provide recommendations. Regarding Juan's conversion process, which of the following would you recommend to gain a competitive advantage?

A) Juan should make sure to offer the same menu items as the other taco truck in town.
B) Juan should have unique product offerings and more efficient processes than the other taco truck in town.
C) Juan should follow the same service routes as the other taco truck in town.
D) Juan should make sure to serve his food in a manner that is like other food trucks in town.

Question 36

Which of the following activities is an additional data capture opportunity during the conversion process?

A) Compliance with regulations
B) Resource acquisition
C) Monitor employee performance
D) Monitor cash flow

Question 37

During the acquisition and payment process, which areas are opportunities for additional data capture in the process approach for information systems?

A) Monitor supplier performance
B) Monitor employee performance
C) Monitor cash flow
D) All of these answer choices are correct.

Question 38

Which of the following social responsibility and sustainability data points can be captured through the conversion processes?

A) Water usage
B) Energy consumption
C) Carbon footprint
D) All of these answer choices are correct.

Question 39

Which of the following is NOT a nonfinancial business event that can be captured through the conversion processes in the information system?

A) Design product
B) Production plan
C) Deliver goods
D) Package product

Question 40

After converting resources into products and/or services, the business generates revenue by

A) marketing and selling its products or services.
B) scheduling production.
C) acquiring resources.
D) monitoring employee performance.

Question 41

Which business event during the marketing, sales and collections processes would NOT be captured in a traditional accounting information system?

A) Produce product
B) Take customer order
C) Deliver goods to a customer
D) Collect payment from customer

Question 42

In which of the following process categories would the termination an employee be recorded?

A) Acquisition and Payment
B) Marketing, Sales, and Collection
C) Conversion
D) Transaction

Question 43

In which of the following process categories would the product recycling rate be captured?

A) Acquisition and Payment
B) Marketing, Sales, and Collection
C) Conversion
D) Transaction

Question 44

In which of the following process categories would online search engine rankings be captured?

A) Acquisition and Payment
B) Marketing, Sales, and Collection
C) Conversion
D) Transaction

Question 45

The accounting information system provides financial and other metrics that

A) determine how well management is implementing and controlling business processes.
B) are used by management for making decisions concerning business processes.
C) allow management to assess key performance indicators.
D) All of these answer choices are correct.

Question 46

Which of the following management responsibility areas includes assigning employee tasks?

A) Planning
B) Implementing
C) Monitoring
D) Changing and Improving

Question 47

Which of the following management responsibility areas includes forecasting future performance?

A) Planning
B) Implementing
C) Monitoring
D) Changing and Improving

Question 48

Which of the following management responsibility areas includes analyzing financial statements?

A) Planning
B) Implementing
C) Monitoring
D) Changing and Improving

Question 49

Which of the following management responsibility areas includes identifying opportunities and assessing risk?

A) Planning
B) Implementing
C) Monitoring
D) Changing and Improving

Question 50

Kobe manages a real-estate company. Recently, Kobe modified the process used to assign a list price by agents in the organization. In which management responsibility area was Kobe operating?

A) Planning
B) Implementing
C) Monitoring
D) Changing and Improving

Question 51

Amy, an assistant manager at a credit union, added functionality to the deposit software used by tellers in the credit union to detect fraudulent activity before the deposit goes into a customer's account. In which management responsibility area was Amy acting in when she added this functionality?

A) Planning
B) Implementing
C) Monitoring
D) Changing and Improving

Question 52

Dembe started and manages a transportation company in Kampala, Uganda. Dembe hired an accounting firm to perform an audit of corporate financials. In which management responsibility area was Dembe acting by requesting an audit?

A) Planning
B) Implementing
C) Monitoring
D) Changing and Improving

Question 53

Quantifiable metrics used to measure and evaluate the success of an organization based on its objectives are known as

A) data integration metrics.
B) business event indicators.
C) key performance indicators.
D) data quality points.

Question 54

Select which statement concerning key performance indicators (KPIs) is NOT true.

A) KPIs for a business are often compared to benchmarks for the industry.
B) KPIs include accounting ratios, like net profit, market and return on investment.
C) KPIs data comes from the accounting information system for a business.
D) KPIs include qualitative data from multiple sources.

Question 55

Which characteristic refers to the suitability of the information for a particular purpose in a specific task?

A) Information integrity
B) Information quality
C) Data integrity
D) Data quality

Question 56

Which characteristic refers to the completeness, accuracy, reliability, and consistency of data?

A) Information integrity
B) Information quality
C) Data integrity
D) Data quality

Question 57

Which statement is NOT true?

A) Business events create information.
B) Business events create data.
C) Accounting information systems transform data into information.
D) Accounting information systems store purchasing and sales data.

Question 58

To be useful for decision making, information must have what two fundamental characteristics?

A) Relevance and Actionability
B) Relevance and Faithful Representation
C) Reality and Faithful Representation
D) Reality and Actionability

Question 59

Which enhancing characteristic of useful information includes the ability for independent and knowledgeable individuals to reach the same conclusions from the same information?

A) Verifiability
B) Timeliness
C) Understandability
D) Comparability

Question 60

Your organization has been reviewing information from the accounting information system based on weekly reports. You are tasked with designing a digital dashboard to display key performance indicators (KPIs) to management at your organization. Which enhancing characteristic of useful information are you improving for the business by creating a dashboard that is updated in real-time with KPIs?

A) Verifiability
B) Timeliness
C) Understandability
D) Comparability

Question 61

At Jonex Corporation, each location has been responsible for reporting its key performance indicators (KPIs) via email to the home office. As an intern in the home office, you are tasked with compiling the information in the emails into a report for your manager. After performing the process once, you develop a query for the information system that allows you to pull the information directly from the information system and put it into a format that presents the data in a way that makes the different locations KPIs much easier to compare. What enhancing characteristic of information have you improved for Jonex?

A) Verifiability
B) Timeliness
C) Understandability
D) Comparability

Question 62

Aiko joined the Hondo organization recently. Aiko's area of responsibility will be generating visual representations of data for Hondo. Currently, Hondo only has someone to create reports with numerical data presented in tables. What enhancing characteristic of data will be improved for Hondo with Aiko's data visualization skills?

A) Verifiability
B) Timeliness
C) Understandability
D) Comparability

Question 63

Juan, a manager for JK Enterprises, is considering hiring your consulting company to evaluate the usefulness of purchasing software for JK that will improve their information reporting capabilities. The software is complex and would require that JK hire someone knowledgeable or send a current employee for additional training. What kind of analysis will your consulting company perform for Juan to determine if the software is a good purchase?

A) Decision context analysis
B) Information quality analysis
C) Data integrity analysis
D) Cost-benefit analysis

Question 64

Which of these statements most clearly defines decision context?

A) Decision context considers the preferences and constraints that affect how a decision is made.
B) Decision context considers the fundamental and enhancing characteristics of data.
C) Decision context refers to the relevance and faithful representation of information.
D) Decision context refers to the information quality and data integrity of a decision.

Question 65

The responses to which questions lead to determining decision context?

A) How fast and what format is the information needed?
B) Who will use it, and why is the information needed?
C) Who requested the information and what formatting is needed?
D) What comparability and understandability characteristics of the information are needed?

Question 66

Relevant information must

A) be applicable to future events.
B) have confirmatory value.
C) have a significant impact on the decision.
D) All of these statements are correct.

Question 67

Faithfully represented data includes the characteristics of

A) being unbiased and accurate.
B) having predictive and confirmatory value.
C) being classified and presented clearly.
D) having comparability and verifiability.

Question 68

Maria is asked to create a document at the end of each month that displays that month's sales data across divisions. What type of output will Maria need to obtain from the information system to obtain this information?

A) Reporting
B) Data analytics
C) Key performance indicators
D) Management insight

Question 69

Walter, a staff accountant with knowledge of computer programming, works for an accounting firm that is in the process of improving how they use data from their information system. Walter is asked to write the code for the information system that will allow the firm to transform data into useful information. What kind of output will Walter be generating?

A) Reporting
B) Data analytics
C) Key performance indicators
D) Management insight

Question 70

Where does the data originate for data analytics purposes?

A) Reports from the information system
B) Raw data from the information system
C) Business event results
D) All of these answer choices are correct.

Question 71

In what way is reporting different from data analytics?

A) Reporting does not seek insight into reasons behind data.
B) Reporting uses data from the information system, while data analytics uses data from reports.
C) Reporting does not include any calculations like data analytics does.
D) Reporting and data analytics are two terms for the same thing.

Question 72

Which statement is TRUE?

A) Management uses data from data analytics to make decisions and from reporting to publish to stakeholders.
B) Management uses their individual intuition to make data-driven decisions without regard to reporting or data analytics.
C) Management uses historical reports and data analytic insights to understand reasons and context to make decisions.
D) Management uses data analytics to calculate historical performance data without regard to the reason or context.

Question 73

Which statement is FALSE?

A) Data analytics is becoming commonplace and even mandated in many industries.
B) Accountants have been calculating some of the same information that is now calculated using data analytics manually for years.
C) Data analytics allows accountants to generate information more efficiently and effectively.
D) Accounting data analytics does not include the vertical analysis of financial statements.

Question 74

Data analytics uses technology to transform

A) data into information.
B) information into data.
C) event processes into data.
D) business processes into information.

Question 75

In what ways do accounting professionals use accounting ratios to compare a company's performance?

A) Across time
B) To other companies
C) To industry benchmarks
D) All of these answer choices are correct.

Question 76

Accountants using technology to analyze financial statements rather than using a manual process are performing

A) data reporting.
B) data quality.
C) data analytics.
D) data capture.

Question 77

Which of the following statements about the way accountants use data analytics is FALSE?

A) Accountants can use data analytics to get more comprehensive results.
B) Accountants can use data analytics without technology.
C) Accountants can use data analytics to get results faster.
D) Accountants can use data analytics to achieve competitive advantage.

Question 78

Which of the following is NOT an accurate statement about how an accountant can use data analytics?

A) Accountants can use data analytics to compare inputs to outputs to identify waste and ordering issues.
B) Accountants can use data analytics to calculate the time to pay invoices to determine if the company is missing out on possible discounts.
C) Accountants can use data analytics to perform a three-way match between purchase orders, goods received into inventory, and invoices to verify accuracy.
D) Accountants can use data analytics to perform vertical analysis of financial statements with either technology or pen and paper.

Question 79

Which of the following is an example of data analytics?

A) A student uses Excel to calculate weights of grades and determine the grade needed on the final.
B) A student uses Excel to record their time spent studying for each class and performs statistical analysis on the time spent versus grade earned.
C) An accountant uses software to horizontally and vertically analyze financial statements to compare with prior quarters.
D) An accountant uses software to generate reports that contain ratios of historical financial data.

Question 80

Employers in the accounting profession, and other professions, look for candidates who are data minded. What soft skills show an employer that the candidate is data minded?

A) Curiosity
B) Creative thinking
C) Awareness of data analytics
D) All of these answer choices are correct.