ACCOUNTING INFORMATION SYSTEMS
INTERNATIONAL EDITION BY VERNON 2026
MOCK PAPER COMPREHENSIVE REVIEW
NOTES ANALYTICAL SUMMARY
◉ FRS provides information to external users; the MRS provides
information to internal users.
Answer: The major difference between the financial reporting
system (FRS) and the management reporting system (MRS) is the
◉ whether the transactions are financial or nonfinancial that
directly affect the processing of financial transactions
Answer: The author distinguishes between the accounting
information system and the management information system based
on
◉ the purchase of computer
Answer: An example of a financial transactions is
◉ log of customer calls
Answer: An example of a nonfinancial transaction is
,◉ the conversion cycle
Answer: The transaction processing system includes which of the
following
◉ the production of useful information
Answer: The goal of data processing is
◉ tax authorities
Answer: Which of the following is an external end user?
◉ internal auditing
Answer: An appraisal function housed within the organization that
performs a wide range of services for management is
◉ constituents
Answer: What factor conceptually distinguishes external auditing
and internal auditing?
◉ cash disbursements
Answer: What system is part of the expenditure cycle?
◉ physical and financial
,Answer: Both the revenue and the expenditure cycle can be viewed
as having two parts. These key parts are
◉ represent relationships between key elements of both manual and
computer systems
Answer: System flowcharts do which one of the following?
◉ oval
Answer: Which symbol is used to represent a data source or
destination of documents and reports in a system flowchart?
◉ Sales Order Processing
Answer: Which accounting application is least suited to batch
processing?
◉ there is a lag between the time when the economic event occurs,
and the financial records are updated.
Answer: In contrast to a real-time system, in a batch processing
system
◉ processing takes place when the economic event occurs.
Answer: In contrast to a batch processing system, in a real-time
system
, ◉ block code
Answer: The coding scheme most appropriate for a chart of accounts
is
◉ a mnemonic code
Answer: When a firm wants its coding system to convey meaning
without reference to any other document, it would choose
◉ missing or unrecorded documents can be identified.
Answer: The most important advantage of sequential coding is that
◉ Management Reporting System (MRS)
Answer: Li has implemented a new accounting information system
(AIS) to help him manage his construction company. Li uses the
information captured by the system to plan each project, forecasting
the requirements for raw materials and the cash flow expected.
Which AIS subsystem helps Li in planning?
◉ Variance reports
Answer: Which information does the management reporting system
(MRS) provide?
◉ The decision maker wastes resources analyzing outdated
information.
INTERNATIONAL EDITION BY VERNON 2026
MOCK PAPER COMPREHENSIVE REVIEW
NOTES ANALYTICAL SUMMARY
◉ FRS provides information to external users; the MRS provides
information to internal users.
Answer: The major difference between the financial reporting
system (FRS) and the management reporting system (MRS) is the
◉ whether the transactions are financial or nonfinancial that
directly affect the processing of financial transactions
Answer: The author distinguishes between the accounting
information system and the management information system based
on
◉ the purchase of computer
Answer: An example of a financial transactions is
◉ log of customer calls
Answer: An example of a nonfinancial transaction is
,◉ the conversion cycle
Answer: The transaction processing system includes which of the
following
◉ the production of useful information
Answer: The goal of data processing is
◉ tax authorities
Answer: Which of the following is an external end user?
◉ internal auditing
Answer: An appraisal function housed within the organization that
performs a wide range of services for management is
◉ constituents
Answer: What factor conceptually distinguishes external auditing
and internal auditing?
◉ cash disbursements
Answer: What system is part of the expenditure cycle?
◉ physical and financial
,Answer: Both the revenue and the expenditure cycle can be viewed
as having two parts. These key parts are
◉ represent relationships between key elements of both manual and
computer systems
Answer: System flowcharts do which one of the following?
◉ oval
Answer: Which symbol is used to represent a data source or
destination of documents and reports in a system flowchart?
◉ Sales Order Processing
Answer: Which accounting application is least suited to batch
processing?
◉ there is a lag between the time when the economic event occurs,
and the financial records are updated.
Answer: In contrast to a real-time system, in a batch processing
system
◉ processing takes place when the economic event occurs.
Answer: In contrast to a batch processing system, in a real-time
system
, ◉ block code
Answer: The coding scheme most appropriate for a chart of accounts
is
◉ a mnemonic code
Answer: When a firm wants its coding system to convey meaning
without reference to any other document, it would choose
◉ missing or unrecorded documents can be identified.
Answer: The most important advantage of sequential coding is that
◉ Management Reporting System (MRS)
Answer: Li has implemented a new accounting information system
(AIS) to help him manage his construction company. Li uses the
information captured by the system to plan each project, forecasting
the requirements for raw materials and the cash flow expected.
Which AIS subsystem helps Li in planning?
◉ Variance reports
Answer: Which information does the management reporting system
(MRS) provide?
◉ The decision maker wastes resources analyzing outdated
information.
