Test Bank for Accounting Information Systems 1st Edition by Arline A. Savage • Latest Update 2026 Exam Prep • Practice Questions with Verified Answers • GRADED A+

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Test Bank for Accounting Information Systems, 1st
Edition by Arline A. Savage Latest 2026
Chapter 01: Accounting as Information
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: B
Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Communication
Bloom's: Comprehension AICPA: AC: Reporting


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: D
Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Communication
Bloom's: Comprehension AICPA: AC: Reporting


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: D

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Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Comprehension
AICPA: AC: Risk Assessment, Analysis, and Management


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. Answer: C
Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Comprehension AICPA: N/A


5) Which of the following is NOT a component of an information system?
A) Hardware
B) Software
C) Input
D) Network Answer: C Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Knowledge
AICPA: AC: Systems and Process Management


6) Input to an information system consists of
A) raw and unorganized data.

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B) hardware and software.
C) reported information.
D) processed data.
Answer: A
Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Knowledge
AICPA: AC: Systems and Process Management
7) 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. Answer: B


Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Comprehension
AICPA: AC: Systems and Process Management


8) 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. Answer: A
Diff: 1
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.

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Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Comprehension
AICPA: AC: Systems and Process Management


9) 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 Answer: D
Diff: 2
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management


10) 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 Answer: A
Diff: 2
Learning Objective: 1.1 Explain how accounting affects both the demand for and supply of
information.
Section Reference: Why is Accounting Information Important? AACSB: Analytic
Bloom's: Application
AICPA: AC: Systems and Process Management


11) A business model is

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