Test Bank For Accounting Information Systems, 10th Edition

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1Accounting Information Systems, 10e(Bodnar/Hopwood)Chapter 1Accounting Information Systems: An Overview1) A system is a collection of related resources designed to help a company achieve specifiedobjectives.Answer: TRUEDiff: 1Page Ref:12) Accounting information systems are designed to gather and utilize information which maycost more to provide than it is worth to the user.Answer: FALSEDiff: 2Page Ref:33) The basic goal of accounting information systems is to convert financial data into information.Answer: TRUEDiff: 1Page Ref:14) Examples of the information provided by a financial information system are cash flowsummaries and payment information.Answer: TRUEDiff: 2Page Ref:45) All data processed and information stored in an accounting information system are mandatoryfor financial reporting purposes.Answer: FALSEDiff: 2Page Ref:36) A typical CRM contains one common database in which all departments with customercontact can access and update.Answer: TRUEDiff: 1Page Ref:47) A typical CRM contains one database for each department which has customer contact.Answer: FALSEDiff: 1Page Ref:48) An extended enterprise brings suppliers and customers together in order to meet customerdemand while minimizing supplier costs.Answer: FALSEDiff: 1Page Ref:49) Procurement and firm infrastructure are examples of primary business processes.Answer: FALSEDiff: 3Page Ref:9

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210) Good documentation means that records should be maintained by all parties involved in atransaction.Answer: TRUEDiff: 1Page Ref:1311) Some organizations that use computers to process transactional data must have aninformation system function.Answer: FALSEDiff: 2Page Ref:1512) The operations function allows specialization in areas such as operating systems andsoftware and communications technology.Answer: FALSEDiff: 3Page Ref:1613) Personal computers give end users their own processing power.Answer: TRUEDiff: 1Page Ref:1714) Most batch processing environments are JIT environments.Answer: FALSEDiff: 2Page Ref:2015) XBRL is a language that facilitates the exchange over the Internet of all kinds of businessdocuments and financial statements.Answer: TRUEDiff: 2Page Ref:2216) External users of accounting information include investors, customers, governmentalagencies, and suppliers.Answer: TRUEDiff: 1Page Ref:217) The functional components of a management information system (such as marketing,manufacturing, human resources, and financial) are logically independent.Answer: TRUEDiff: 1Page Ref:318) A decision support system (DSS) is tailored to the strategic information needs of top-levelmanagement.Answer: FALSEDiff: 1Page Ref:419) The AIS benefits of information technology include automation, information organization,and communication.Answer: TRUEDiff: 1Page Ref:5

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320) AIS application architecture currently focuses on automating the traditional accountingcycle.Answer: FALSEDiff: 2Page Ref:621) MRP and MRP II software was created to aid in Supply Chain Management (SCM).Answer: TRUEDiff: 2Page Ref:622) In CIM systems, computers control management designed parts of the manufacturingprocess.Answer: FALSEDiff: 2Page Ref:623) Flexible manufacturing systems can be reprogrammed to produce entirely different products.Answer: TRUEDiff: 1Page Ref:624) The process management approach aids in the management and improvement of a company'sprocesses in order to increase customer satisfaction while ignoring the company's cost structure.Answer: FALSEDiff: 2Page Ref:625) ERPs should reduce data duplication, increase communication between functional areas, andreduce complications of software updates.Answer: TRUEDiff: 2Page Ref:726) ERPs can either be industry-specific or based around "best practices" of various sizedcompanies.Answer: TRUEDiff: 1Page Ref:727) ERPs are inexpensive and relatively easy to implement.Answer: FALSEDiff: 1Page Ref:728) ERP II adds an Enterprise Application Suite (EAS) to aid in the communication betweenfunctional areas.Answer: FALSEDiff: 2Page Ref:829) Business processes are always triggered by some economic event, and all have clearlydefined starting and ending points.Answer: TRUEDiff: 2Page Ref:8

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430) A key characteristic and benefit of business processes is that they are always limited to onefunctional area of the information system.Answer: FALSEDiff: 2Page Ref:831) Analyzing a company's value chain aids in the identification of a company's competitiveadvantages.Answer: TRUEDiff: 2Page Ref:932) Operational transaction cycles have traditionally grouped activities of a business into sixcommon operational processes.Answer: FALSEDiff: 2Page Ref:1133) Transactions are used by auditors to verify account balances and internal controls.Answer: TRUEDiff: 2Page Ref:1234) The accounting and finance functions should not be segregated in order to increase acompany's internal control.Answer: FALSEDiff: 2Page Ref:1335) The director of internal auditing should report directly to the controller of the company.Answer: FALSEDiff: 2Page Ref:1436) The treasurer is responsible for the budgeting and tax planning aspects of a business.Answer: FALSEDiff: 2Page Ref:1437) Systems programmers usually report to the Manager of Systems Analysis.Answer: FALSEDiff: 3Page Ref:1638) A steering committee consists of high-level members of user functions such asmanufacturing and marketing, as well as the head of the information system function and severalof his or her staff.Answer: TRUEDiff: 2Page Ref:1639) An information center is a support facility for end users in an organization.Answer: TRUEDiff: 1Page Ref:17

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540) DBMS is the hands-on use of computers by end users.Answer: FALSEDiff: 2Page Ref:1741) Information system specialists are used in the traditional approach to data processing for endusers.Answer: TRUEDiff: 2Page Ref:1742) EDI is a key component to quick-response technology system.Answer: TRUEDiff: 2Page Ref:1943) The philosophy that one should dothe right thing the first timeis better known as TQM orTQP.Answer: TRUEDiff: 2Page Ref:1844) RFID tags are used for tracking objects within a quick-response system.Answer: TRUEDiff: 1Page Ref:1945) Only active RFID tags transmit signals containing digital information to receivers.Answer: FALSEDiff: 1Page Ref:2046) Lean manufacturing focuses on eliminating waste from the entire value chain.Answer: FALSEDiff: 1Page Ref:2047) A just-in-time manufacturing system is one form of lean manufacturing.Answer: TRUEDiff: 1Page Ref:2048) Microsoft sponsors the Web TrustTMseal of approval to certain web sites that meet theirsecurity and integrity criteria.Answer: FALSEDiff: 2Page Ref:2149) Electronic data interchange (EDI) is the direct computer-to-end-user exchange of businessdocuments via a communications network.Answer: FALSEDiff: 1Page Ref:2150) ANSI X.12 is a public EDI standard.Answer: TRUEDiff: 3Page Ref:22

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651) The SEC requires that all companies must file their financial reports electronically usingXBRL.Answer: FALSEDiff: 2Page Ref:2252) FedWire is a retail EFT system used for telephone wire transfers and payments.Answer: FALSEDiff: 2Page Ref:2253) E-waste refers to dollars spent on unsuccessful implementations and technologies.Answer: FALSEDiff: 2Page Ref:2654) Green IT states system design should include a plan for recycling and reusing systemcomponents.Answer: TRUEDiff: 1Page Ref:2655) A systems development project consists of ________ general phases.Answer: threeDiff: 1Page Ref:2356) The purpose of the ________ approach is to assist in the orderly development of effectivesystems.Answer: systemsDiff: 2Page Ref:2357) Many companies prefer business process ________ because they find it more cost-effectivethan designing their own system from the ground up.Answer: blueprintingDiff: 2Page Ref:2458) A philosophy of ________ design fosters a set of attitudes and an approach to systemsdevelopment that consciously considers the organizational context.Answer: user-orientedDiff: 2Page Ref:2559) Middle management uses ________ information in an organization.Answer: tacticalDiff: 2Page Ref:260) The source for most information used by lower-level managers is largely ________.Answer: internalDiff: 2Page Ref:2

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761) There are ________ major categories of information systems within an organization.Answer: sevenDiff: 2Page Ref:362) A(n) ________ information system is tailored to the strategic information needs of top-levelmanagement.Answer: executiveDiff: 1Page Ref:563) A(n) ________ system manages all contact with customers.Answer: customer relation management (CRM)Diff: 1Page Ref:464) A(n) ________ system encompasses the planning and management of all activities involvedin sourcing, procurement, conversion, and logistics management activities.Answer: supply chain management (SCM)Diff: 1Page Ref:465) A group of loosely-connected companies that work together to maximize the value of theireconomic outputs is a(n) ________.Answer: extended enterpriseDiff: 2Page Ref:466) The IT benefits for AISs are ________, ________, and ________.Answer: automation, information organization, and communicationDiff: 2Page Ref:567) Application ________ involves the process of ensuring the suite of organization'sapplications work together in order to meet organizational goals and objectives.Answer: architectureDiff: 2Page Ref:668) ________ software assists management in managing inventories and scheduling production.Answer: MRPDiff: 1Page Ref:669) In ________ computers take control of the entire production process (CIM) but also can bereprogrammed so the same processes can produce entirely different products.Answer: flexible manufacturing systems (FMSs)Diff: 2Page Ref:670) The ________ management approach involves the application of knowledge, skills, tools,techniques and systems to manage and improve organizational processes to better meetcustomers' needs and maximize profitability.Answer: processDiff: 2Page Ref:6

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871) The ISO 9001 is a(n) ________-management standard published by the InternationalStandards Organization.Answer: qualityDiff: 2Page Ref:672) ________ combines functional information systems in a single software package and a singledatabase.Answer: enterprise resource planning (ERP)Diff: 1Page Ref:773) ERP II adds collaborative ________ to ERP.Answer: commerceDiff: 2Page Ref:874) Enterprise ________ suite uses a group of individual packages that work with each other ona web browser as opposed to one large ERP software package.Answer: applicationDiff: 2Page Ref:875) The linking of applications in suite is facilitated through a ________.Answer: service oriented architecture (SOA)Diff: 2Page Ref:876) A business process is an interrelated set of tasks that involve data, ________ units, and alogical time sequence.Answer: organizationalDiff: 3Page Ref:877) A simple way of viewing the company's activities in a manner suited to analyzing itscompetitive advantages is known as the ________ ________.Answer: value chainDiff: 1Page Ref:978) The controller is the executive in charge of ________ activities of the organization, while thetreasurer supervises the ________ activities.Answer: accounting; financialDiff: 1Page Ref:1479) Events related to the acquisition of goods and services from other entities and the settlementof related obligations are in the ________ cycle; events related to the transformation of resourcesinto goods and services are in the ________ cycle.Answer: expenditure; productionDiff: 1Page Ref:11

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980) A common violation of the ________ principle is the delegation of both accounting andfinancial responsibilities to the same individual or department.Answer: segregationDiff: 2Page Ref:1381) The ________ is the head of the information systems function in an organization.Answer: CIO (chief information officer)Diff: 2Page Ref:1582) A ________ committee is an advisory group who can influence the policies, budget, andplanning of information services within an organization.Answer: steeringDiff: 2Page Ref:1683) Radio frequency identification tags (RFID) can be either ________, ________, or ________.Answer: active, passive, or semi-passiveDiff: 3Page Ref:1984) The main focus of ________ manufacturing is eliminating waste and improving productionflow.Answer: leanDiff: 1Page Ref:2085) The three major categories of waste under the original Toyota Production System (TPS) are________, ________, and ________.Answer: muda, muri, and muraDiff: 3Page Ref:2086) Green IT is concerned with reducing ________ through recycling and reusing electronicproducts rather than discarding these products.Answer: e-wasteDiff: 1Page Ref:2687) A just-in-time (JIT) environment is characterized by activities occurring in a ________________ environment.Answer: continuous flowDiff: 1Page Ref:2088) A(n) ________ ________ ________ is a type of information system that supports nonroutineneeds for information, while ________ systems support routine, nonrecurring information needs.Answer: decision support system; DPDiff: 2Page Ref:489) ________ is an automated clearing house system used for the clearing of Eurodollarpayments between U.S. and non-U.S. financial institutions.Answer: CHIPSDiff: 3Page Ref:22

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1090) The term that best describes an information system that is tailored to the strategicinformation needs of top-level management is a/anA) accounting information system.B) expert system.C) executive information system.D) EDP system.Answer: CDiff: 1Page Ref:591) Which of the following isnotan example of a common functional MIS subsystem?A) Decision support systemB) Marketing information systemC) Manufacturing information systemD) Human resources information systemAnswer: ADiff: 1Page Ref:492) Which of the following isnota common transaction processing cycle found in businessorganizations?A) Expenditure cycleB) Accounting cycleC) Production cycleD) Revenue cycleAnswer: BDiff: 2Page Ref:1193) Which of the following transaction processing cycles concerns events related to thedistribution of goods and services to other organizations and the collection of related payments?A) ProductionB) ExpenditureC) Financial reportingD) RevenueAnswer: DDiff: 1Page Ref:1194) The transaction processing cycle that is concerned with the events related to thetransformation of resources into goods and services isA) production.B) revenue.C) financial reporting.D) expenditure.Answer: ADiff: 1Page Ref:11

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1195) A system that manages all contacts with customers is a ________ system.A) customer value chainB) customer relation managementC) customer supply chain managementD) customer requirements planningAnswer: BDiff: 1Page Ref:496) A(n) ________ is a group of loosely-connected companies that work together to maximizethe value of their economic outputs.A) extended enterpriseB) enterprise resource plannersC) enterprise suiteD) value chain consortiumAnswer: ADiff: 2Page Ref:497) A(n) ________ system encompasses the planning and management of all activities involvedin sourcing, procurement, conversion, and logistics management activities.A) CRMB) SCMC) DSD) ESAnswer: BDiff: 2Page Ref:498) The fundamental benefits of information technology for AISs include the followingexceptA) communication.B) information organization.C) systems development.D) automation.Answer: CDiff: 1Page Ref:599) ________ involves the process of ensuring the suite of organization's applications worktogether as a composite application according to the goals and objectives of the organization.A) Applications requirements planningB) Enterprise application structureC) Enterprise resource planningD) Applications architectureAnswer: DDiff: 2Page Ref:6

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12100) Material requirements planning software assists management in managingA) inventories.B) overhead.C) scheduling production.D) both inventories and scheduling production.Answer: DDiff: 2Page Ref:6101) The international quality-management standard credited for promoting the processmanagement approach is theA) Six Sigma.B) ISA-95.C) ISO 9001.D) ISA-Y2K.Answer: CDiff: 2Page Ref:6102) Which systems permit the reprogramming of computers to produce entirely differentproducts in the same manufacturing facility with the same equipment?A) MRP and MRP IIB) CIMs and FMSsC) ESs and FMSsD) ERPs and MRPsAnswer: BDiff: 2Page Ref:6103) A complete systems solution involving one software package and one database is referredto asA) ERP.B) MRP.C) SCM.D) DSS.Answer: ADiff: 1Page Ref:7104) The following are benefits of an ERP except for the abilityA) to eliminate data duplication and redundancy.B) to standardize data formats.C) to easily share data from various departments.D) to easily customize software to meet company needs.Answer: DDiff: 1Page Ref:7-8

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13105) Groups of organizations working together to create new products, new process methods,and/or human capital intelligence is referred to as a(n)A) ERP.B) e-commerce.C) collaborative commerce.D) application consortium.Answer: CDiff: 2Page Ref:8106) A group of individual software applications designed to run in web browsers and facilitatedthrough a service oriented architecture (SOA) is referred to as a(n)A) ERP II.B) application architecture.C) value chain application suite.D) enterprise application suite.Answer: DDiff: 2Page Ref:8107) What language facilitates business to business commerce through the extended value chain,which includes both manufacturers and their suppliers?A) VCMLB) XBRLC) HTMLD) COBOLAnswer: ADiff: 3Page Ref:10108) The staff position which would generally report to the treasurer rather than to the controllerisA) budgeting.B) accounts payable.C) credit manager.D) cost accounting.Answer: CDiff: 1Page Ref:14109) The high-level executive who supervises accounting functions such as budgeting, billing,and payroll is known as theA) treasurer.B) controller.C) chief information officer.D) chief internal auditor.Answer: BDiff: 2Page Ref:14

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14110) The three general phases of systems development projects and the order in which theyoccur areA) systems design, systems implementation, and systems analysis.B) systems design, systems implementation, and systems auditing.C) systems design, systems analysis, and systems programming.D) systems analysis, systems design, and systems implementation.Answer: DDiff: 2Page Ref:23111) The functional subsystem of a management information system that would likely obtaindata on wage and payroll tax summaries, benefit information, and government regulations iscalled theA) human resources information system.B) manufacturing information system.C) financial information system.D) marketing information system.Answer: ADiff: 2Page Ref:4112) When information levels within an organization are viewed as a pyramid, strategicinformation is used primarily byA) lower-level management.B) top-level management.C) middle management.D) lower-level and middle management.Answer: BDiff: 2Page Ref:2113) From an organization's viewpoint, a distinction can be drawn between the following twobroad classes of accounting informationA) historical and future.B) strategic and operational.C) internal and external.D) mandatory and discretionary.Answer: DDiff: 2Page Ref:3114) Which item listed below isnotconsidered a primary business process?A) MarketingB) Outbound sales logisticsC) Technology developmentD) ServiceAnswer: CDiff: 2Page Ref:9

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15115) Which of the following isnotan objective of internal control as a process?A) Reliability of financial reportingB) Accuracy of accounting informationC) Compliance with applicable laws and regulationsD) Effectiveness and efficiency of operationsAnswer: BDiff: 1Page Ref:13116) The preparation of forecasts and analyses used by management in planning and controllingthe operations of the organization is generally a(n)A) budgeting function.B) tax planning function.C) accounting manager function.D) treasurer function.Answer: ADiff: 2Page Ref:14117) The internal audit function within an organization should be considered a(n)A) activity supervised by the controller.B) sub function of the treasurer.C) independent appraisal activity.D) optional service provided by the firm's external auditors.Answer: CDiff: 2Page Ref:15118) The area of functional specialization which is responsible for the design, coding, testing,and debugging of computer programs is theA) technical support function.B) user function.C) operations function.D) programming function.Answer: DDiff: 1Page Ref:16119) Information retrieval from the organization's database using the query language feature ofDBMS is a commonA) programming function.B) technical support function.C) EUC application.D) ES application.Answer: CDiff: 3Page Ref:17

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