Question 1

The flexibility principle of accounting information systems prescribes that the:

Accepted Answer

A) Benefits from an activity outweigh the costs of the activity. 
B) System report useful, understandable, timely, and pertinent information for effective decision making. 
C) System aid managers in controlling and monitoring business activities. 
D) System be able to adapt to changes in the company, business environment, and needs of decision makers. 
E) System conforms to a company's activities, personnel, and structure. 
A) Benefits from an activity outweigh the costs of the activity. 
B) System report useful, understandable, timely, and pertinent information for effective decision making. 
C) System aid managers in controlling and monitoring business activities. 
D) System be able to adapt to changes in the company, business environment, and needs of decision makers. 
E) System conforms to a company's activities, personnel, and structure.

Question 2

Internal controls include policies to direct operations toward common goals,procedures to ensure reliable financial reports,safeguards to protect company assets and methods to achieve compliance with laws and regulations.

Accepted Answer

A) True 
 B)False

Question 3

Segment information is often useful to investors for evaluating a company's profitability,risk,and growth.

Accepted Answer

A) True 
 B)False

Question 4

Outdoors Unlimited uses special journals to record its daily transactions.They use the perpetual inventory system.Shown below is its cash receipts journal and selected ledger accounts.Post the cash receipts journal to the appropriate ledger accounts.

Accepted Answer

The answer of Outdoors Unlimited uses special journals to record...

Question 5

Enterprise resource planning software is primarily used for recording journal entries.

Accepted Answer

A) True 
 B)False

Question 6

With on-line systems,all information storage should be off-line to protect the data.

Accepted Answer

A) True 
 B)False

Question 7

Account balances in the general ledger and the subsidiary ledgers should be proved for accuracy after posting is complete.

Accepted Answer

A) True 
 B)False

Question 8

The accounting principle that prescribes an accounting information system conform with a company's activities,personnel,and structure is the:

Accepted Answer

A) Control principle. 
B) Compatibility principle. 
C) Relevance principle. 
D) Flexibility principle. 
E) Cost-Benefit principle. 
A) Control principle. 
B) Compatibility principle. 
C) Relevance principle. 
D) Flexibility principle. 
E) Cost-Benefit principle.

Question 9

A company entered into the following transactions.For each transaction,indicate the appropriate journal.
a.Sales Journal
b.Purchases Journal
c.Cash Receipts Journal
d.Cash Disbursements Journal
e.General Journal
____ 1.Purchased merchandise for cash.
____ 2.Sold merchandise for cash.
____ 3.Purchased merchandise on credit.
____ 4.Sold merchandise on credit
____ 5.Paid cash to settle the utility bill.
____ 6.Owner invested more cash in the business.
____ 7.Recorded depreciation for the period.
____ 8.Borrowed cash from the bank.
____ 9.Bought store supplies for cash.
____ 10.Customer sent in cash to settle an account receivable.

Accepted Answer

1.D; 2.C;

Question 10

Williams Company began business on May 1.They use the periodic inventory method.The following transactions involving purchases and cash disbursements occurred during the first week of May.
   a.Use the purchases journal and the cash disbursements journal to record these transactions.
b.Prepare a schedule of accounts payable.There was no accounts payable balance on May 1.

Accepted Answer

The answer of Williams Company began business on May 1.They...

Question 11

The accounts payable ledger is used for storing transactions data regarding individual customers.

Accepted Answer

A) True 
 B)False

Question 12

Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

Accepted Answer

A) True 
 B)False

Question 13

A company uses four special journals:
 purchases,sales,cash receipts,and cash disbursements.The following transactions were incurred during August:
   Record these transactions in the appropriate special journals below.

Accepted Answer

The answer of A company uses four special journals:
 purchases,sales,cash...

Question 14

The _________________ principle requires that an accounting information system report useful,understandable,timely,and pertinent information for effective decision making.

Accepted Answer

The answer of The _________________ principle requires that an accounting...

Question 15

Individual transactions in the sales journal are regularly posted to customer accounts in the accounts payable ledger.

Accepted Answer

A) True 
 B)False

Question 16

Input devices include:

Accepted Answer

A) Bar-code readers. 
B) Printers. 
C) Software. 
D) Ledgers. 
E) Information processors. 
A) Bar-code readers. 
B) Printers. 
C) Software. 
D) Ledgers. 
E) Information processors.

Question 17

The five basic principles of accounting information systems are control,competency,compatibility,flexibility and cost-benefit.

Accepted Answer

A) True 
 B)False

Question 18

Identify the accounting information system principle below that applies to each of these situations.
a. Control
b. Compatibility
c. Relevance
d. Flexibility
e. Cost-benefit
_____ 1. Global Company has designed their accounting information system to be adaptable to changes in technology,the business environment,and the needs of decision makers.
_____ 2. Global Company has world-wide operations that must handle several thousand
different products,so the accounting information system is fairly complex,encompassing marketing and manufacturing.
_____ 3. Global Company's accounting information system has policies to ensure that financial statements will be reliable,assets are protected,and relevant laws and regulations are complied with.
_____ 4. Global Company's accounting information system can be improved markedly for a
cost of about $30,000,000.However,the incremental benefits from such improvements are not expected to outweigh this cost.
_____ 5. Global Company has designed their accounting information system so that key managers can obtain the information they need to make decisions relating to new products,sales,and controlling costs.

Accepted Answer

1.D; 2.B;

Question 19

A ____________________ is a part of a company that is separately identified by its products,or services,or by the geographic market it serves.

Accepted Answer

The answer of A ____________________ is a part of a...

Question 20

Accounting information processes are structured to eliminate the need for professional judgment.

Accepted Answer

A) True 
 B)False

Exam 7: Accounting Information Systems

The flexibility principle of accounting information systems prescribes that the:

Internal controls include policies to direct operations toward common goals,procedures to ensure reliable financial reports,safeguards to protect company assets and methods to achieve compliance with laws and regulations.

Segment information is often useful to investors for evaluating a company's profitability,risk,and growth.

Outdoors Unlimited uses special journals to record its daily transactions.They use the perpetual inventory system.Shown below is its cash receipts journal and selected ledger accounts.Post the cash receipts journal to the appropriate ledger accounts.

Enterprise resource planning software is primarily used for recording journal entries.

With on-line systems,all information storage should be off-line to protect the data.

Account balances in the general ledger and the subsidiary ledgers should be proved for accuracy after posting is complete.

The accounting principle that prescribes an accounting information system conform with a company's activities,personnel,and structure is the:

The accounts payable ledger is used for storing transactions data regarding individual customers.

Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

A company uses four special journals: purchases,sales,cash receipts,and cash disbursements.The following transactions were incurred during August: Record these transactions in the appropriate special journals below.

The _________________ principle requires that an accounting information system report useful,understandable,timely,and pertinent information for effective decision making.

Individual transactions in the sales journal are regularly posted to customer accounts in the accounts payable ledger.

Input devices include:

The five basic principles of accounting information systems are control,competency,compatibility,flexibility and cost-benefit.

A ____________________ is a part of a company that is separately identified by its products,or services,or by the geographic market it serves.

Accounting information processes are structured to eliminate the need for professional judgment.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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