TEST BANK
Core Concepts of Accounting Information Systems
MARK G. SIMKIN, JAMES L. WORRELL, ARLINE A. SAVAGE
14th Edition
, Core Concepts of Accounting Information Systems, 14th Edition, by Simkin, Worrell, and Savage
Chapter 1
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT
True-False Questions
1. The acronym AIS stands for “Accounting Information Standards.”
2. Accounting information systems must be computerized to be effective.
3. It is best to view an AIS as an accounting system that must be computerized.
4. AISs often create information that is useful to non-accountants.
5. In order to be useful, raw accounting data must be processed by a computer.
6. The path that data follow in an AIS, for example from manual source
document to completed output report, is called an audit trail.
7. A company's audit trail is normally easier to follow under a manual data
processing system compared to a computerized information processing
system.
8. The starting point for an audit trail of a weekly payroll system might be an
employee time card.
9. The starting point for an audit trail of a production department might be
the purchase order for raw materials.
10. The acronym ERP stands for “electronic reporting plan.”
11. The term information overload refers to providing too much data to
management, often resulting in managers ignoring it.
12. An advantage of computerized AISs is that they do not need to be
programmed to catch simple input errors such as entering “4.0” instead of
“40.0” for hours worked in a payroll application.
13. Computers tend to make audit trails easier to follow because everything is
computerized.
14. The acronym ERP stands for “enterprise reporting system.”
15. The authors consider accountants to be “knowledge workers.”
16. Predictive analytics use large data warehouses to help
organizations improve performance by predicting future
outcomes.
TB 1.1
, Core Concepts of Accounting Information Systems, 14th Edition, by Simkin, Worrell, and Savage
17. As used in this chapter, the acronym SAR stands for “suspicious accounting
reporting.”
18. Sections of the Patriot Act mandate suspicious activity reporting.
19. One of the motivations for SAR is to identify money laundering activities.
20. The term “Patriot” in the “Patriot Act of 2001 is an acronym for “providing
appropriate tools required to intercept and obstruct terrorism.”
21. Accounting rules do not allow for any flexibility in financial reporting by
management.
22. Accounting systems are useful for performing accounting tasks, but cannot
be used for such security purposes as countering terrorism.
23. An example of a corporate scandal that was mentioned in this chapter is the Enron
case.
24. The Sarbanes-Oxley Act allows CPA firms to help clients acquire,
install and use information systems and to also act as those clients’
external auditor.
25. The Sarbanes-Oxley Act prohibits companies from using the same auditing firms
for performing both auditing and management consulting services.
26. Cloud computing is a way of using business applications over the Internet.
27. A consulting service provided by CPA firms is risk assessment.
28. A major output of financial accounting is the preparation of financial
statements such as an income statement.
29. The series of steps leading from data recorded in transaction records to the
information reported on financial statements is called the accounting cycle.
30. AISs are only concerned with financial information.
31. One major difference between financial accounting and managerial
accounting is that financial accountants prepare financial statements for
external investors while managerial accountants prepare financial statements
for internal managers.
32. In a responsibility accounting system, managers trace unfavorable
performance to the department or persons causing the inefficiencies.
33. One major difference between financial accounting and managerial
accounting is that financial accountants use dashboards while managerial
accountants do not.
TB 1.2
, Core Concepts of Accounting Information Systems, 14th Edition, by Simkin, Worrell, and Savage
34. An example of a financial report that would be prepared by a managerial
accountant (instead of a financial accountant) is a budget report.
35. XBRL is a business reporting language that is used to define interactive financial
data.
36. “Cost accounting” is a subset of managerial accounting.
37. An ABC inventory system refers to an “activity-based costing” system.
38. As used in chapter 1, the term “dashboard” refers to a quick and easy
plan to install a computerized accounting system in an organization.
39. As used in Chapter 1, a dashboard is an up-to-the-minute graphic
depiction of key performance measures.
40. The purpose of the assurance services of an accounting firm is to give a
company’s managers moral support when they are audited by the
federal or state government.
41. “CPA Trust Services” performed by a CPA provides assurance that a
company engaged in electronic commerce has an information system that
is secure.
42. An example of a value-added reseller (VAR) is a dealer who sells software
but does not help with the installation, training and customization of that
software for the customer.
43. Some possible career opportunities for AIS majors or minors include
consulting positions, computerized auditing, or computer security
positions.
44. Accountants are usually classified as “line workers” within business organizations.
45. Today's AIS is an enterprise-wide information system that focuses on
interdepartmental business processes.
46. A good audit trail within the financial accounting system should allow a
manager or auditor to trace any source document back from a report to
the original data entry.
47. Managerial accounting principally provides decision-making information to a
company's internal managers.
48. As a result of computerized information processing systems in many
organizations today, the need for accountants in these organizations has
significantly declined.
49. Activity-based costing systems focus on allocating overhead on the basis of
direct labor hours used.
TB 1.3
Core Concepts of Accounting Information Systems
MARK G. SIMKIN, JAMES L. WORRELL, ARLINE A. SAVAGE
14th Edition
, Core Concepts of Accounting Information Systems, 14th Edition, by Simkin, Worrell, and Savage
Chapter 1
ACCOUNTING INFORMATION SYSTEMS AND THE ACCOUNTANT
True-False Questions
1. The acronym AIS stands for “Accounting Information Standards.”
2. Accounting information systems must be computerized to be effective.
3. It is best to view an AIS as an accounting system that must be computerized.
4. AISs often create information that is useful to non-accountants.
5. In order to be useful, raw accounting data must be processed by a computer.
6. The path that data follow in an AIS, for example from manual source
document to completed output report, is called an audit trail.
7. A company's audit trail is normally easier to follow under a manual data
processing system compared to a computerized information processing
system.
8. The starting point for an audit trail of a weekly payroll system might be an
employee time card.
9. The starting point for an audit trail of a production department might be
the purchase order for raw materials.
10. The acronym ERP stands for “electronic reporting plan.”
11. The term information overload refers to providing too much data to
management, often resulting in managers ignoring it.
12. An advantage of computerized AISs is that they do not need to be
programmed to catch simple input errors such as entering “4.0” instead of
“40.0” for hours worked in a payroll application.
13. Computers tend to make audit trails easier to follow because everything is
computerized.
14. The acronym ERP stands for “enterprise reporting system.”
15. The authors consider accountants to be “knowledge workers.”
16. Predictive analytics use large data warehouses to help
organizations improve performance by predicting future
outcomes.
TB 1.1
, Core Concepts of Accounting Information Systems, 14th Edition, by Simkin, Worrell, and Savage
17. As used in this chapter, the acronym SAR stands for “suspicious accounting
reporting.”
18. Sections of the Patriot Act mandate suspicious activity reporting.
19. One of the motivations for SAR is to identify money laundering activities.
20. The term “Patriot” in the “Patriot Act of 2001 is an acronym for “providing
appropriate tools required to intercept and obstruct terrorism.”
21. Accounting rules do not allow for any flexibility in financial reporting by
management.
22. Accounting systems are useful for performing accounting tasks, but cannot
be used for such security purposes as countering terrorism.
23. An example of a corporate scandal that was mentioned in this chapter is the Enron
case.
24. The Sarbanes-Oxley Act allows CPA firms to help clients acquire,
install and use information systems and to also act as those clients’
external auditor.
25. The Sarbanes-Oxley Act prohibits companies from using the same auditing firms
for performing both auditing and management consulting services.
26. Cloud computing is a way of using business applications over the Internet.
27. A consulting service provided by CPA firms is risk assessment.
28. A major output of financial accounting is the preparation of financial
statements such as an income statement.
29. The series of steps leading from data recorded in transaction records to the
information reported on financial statements is called the accounting cycle.
30. AISs are only concerned with financial information.
31. One major difference between financial accounting and managerial
accounting is that financial accountants prepare financial statements for
external investors while managerial accountants prepare financial statements
for internal managers.
32. In a responsibility accounting system, managers trace unfavorable
performance to the department or persons causing the inefficiencies.
33. One major difference between financial accounting and managerial
accounting is that financial accountants use dashboards while managerial
accountants do not.
TB 1.2
, Core Concepts of Accounting Information Systems, 14th Edition, by Simkin, Worrell, and Savage
34. An example of a financial report that would be prepared by a managerial
accountant (instead of a financial accountant) is a budget report.
35. XBRL is a business reporting language that is used to define interactive financial
data.
36. “Cost accounting” is a subset of managerial accounting.
37. An ABC inventory system refers to an “activity-based costing” system.
38. As used in chapter 1, the term “dashboard” refers to a quick and easy
plan to install a computerized accounting system in an organization.
39. As used in Chapter 1, a dashboard is an up-to-the-minute graphic
depiction of key performance measures.
40. The purpose of the assurance services of an accounting firm is to give a
company’s managers moral support when they are audited by the
federal or state government.
41. “CPA Trust Services” performed by a CPA provides assurance that a
company engaged in electronic commerce has an information system that
is secure.
42. An example of a value-added reseller (VAR) is a dealer who sells software
but does not help with the installation, training and customization of that
software for the customer.
43. Some possible career opportunities for AIS majors or minors include
consulting positions, computerized auditing, or computer security
positions.
44. Accountants are usually classified as “line workers” within business organizations.
45. Today's AIS is an enterprise-wide information system that focuses on
interdepartmental business processes.
46. A good audit trail within the financial accounting system should allow a
manager or auditor to trace any source document back from a report to
the original data entry.
47. Managerial accounting principally provides decision-making information to a
company's internal managers.
48. As a result of computerized information processing systems in many
organizations today, the need for accountants in these organizations has
significantly declined.
49. Activity-based costing systems focus on allocating overhead on the basis of
direct labor hours used.
TB 1.3
