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Exam 2: Role and Purpose of Accounting Information Systems

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Question 1

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AIS is an important area of study for future accountants because a well-designed AIS can recognize and adapt to the cost-benefit constraint.Which of the following statements is most true?

A) Nonfinancial costs and benefits are less important than financial costs and benefits in designing an AIS.
B) Resistance to change is a potential cost when making changes to the AIS.
C) Financial statement users benefit from more information when it comes from the AIS.
D) Source documents should be electronic, rather than paper-based, because electronic documents are more cost effective.

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Question 2

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As a requirement of his AIS course, Ahmed was preparing a short paper on why AIS is an important area of study for future accountants.In terms of the UMUC information literacy criteria, which of the following statements is most true?

A) Ahmed has sufficient authority to write the paper; he does not need to consult outside sources.
B) To meet the accuracy criterion, he must discuss exactly three reasons.
C) By consulting at least five sources, Ahmed will be sure to meet the objectivity criterion.
D) His paper may have sufficient coverage if he discusses at least three reasons.

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Question 3

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An accounting information system comprises five generic parts.Which of the following gives an example of an internal control associated with the sales/collection process?

Bumble Beasley, a recent accounting graduate from a private, for-profit university, started his own accounting consulting firm.His web page discussed internal controls, inputs, processes and outputs in relation to the design and implementation of accounting information systems.Should his web page be considered a good source of information about the generic structure of AIS?

In an auditing course, students develop their decision making skills, learn how to conduct a financial statement audit and learn the various types of audit reports.Which of the following therefore links AIS with auditing?

A well-designed AIS can respond to many parts of the FASB Conceptual Framework.Descriptions of the assumptions, principles and constraints of the framework are listed below in alphabetic order.Group them as they are found in the conceptual framework. a.A company will continue in business long enough to satisfy its current obligations. b.A company's accounting records should be kept separate from those of its owner. c.Absent other information, assets are recorded and reported at their purchase price. d.Financial statements should include complete information for making decisions. e.For financial reporting purposes, we divide the life of a business into quarters, years or some other measurement of time. f.Revenue should be recorded in the AIS when goods and services are exchanged. g.The benefits of obtaining information should outweigh the cost of obtaining it. h.The costs of earning revenue should be put on the same income statement with the revenue they generate. i.The value of a dollar is constant over time. j.When a dollar amount is too small to make a significant difference in decision making, other accounting rules may be ignored. k.When faced with a choice of methods, make the choice that puts the business in the worst possible financial light.

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:

The generic elements of an AIS include processes and storage.Which of the following statements about them is most true?

The AICPA Core Competency framework comprises three parts.All of the following competencies belong to the same part except:

Which of the following best explains why AIS is an important area of study for future accountants?

A consulting company summarized the key provisions of the Sarbanes-Oxley Act in a half-page flyer, which was then mailed to prospective clients.The flyer contained the name of the consulting company, but did not identify any of its employees by name.In addition to objectivity, the flyer is most likely in violation of which UMUC criterion for information evaluation?

AIS can be linked to other areas of study in accounting by focusing on the five generic elements of the AIS.Which of the following is a process that might be studied in management or cost accounting?

AIS is an important area of study for future accountants because a well-designed AIS can respond to many elements of the conceptual framework.Which of the following best pairs an element of the conceptual framework with a specific example of that element?

Information literacy is the ability to ___ information in all of its various formats.

Sienna used a stack of sales invoices to record journal entries in the AIS.She used those entries and others to prepare an income statement that was later reviewed by her supervisor.All the generic elements of the AIS are represented in Sienna's actions except:

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?

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

Which of the following statements about AIS is most true?

Joe has completed all his accounting coursework and is ready to graduate.In his education, he has learned how to: analyze source documents, use Excel, make journal entries and prepare tax returns.Which generic element of the AIS is missing from that list?

An accounting information system transforms inputs into outputs via processes such as: