D217 AIS MOD/UNIT tests
1. MOD 1 - The primary input to the transaction processing system is: "a financial transaction." The financial
transaction is the primary input to the transaction processing system. Financial transactions are economic events that
affect assets and equities and are reflected on the financial statements.
2. The major difference between the financial reporting system (FRS) and the management reporting system
(MRS) is the: "FRS provides information to external users; the MRS provides information to internal users." The FRS
produces the financial statements as required by law. The MRS provides information to management for decision
making such as budgets, forecasts, customer orders.
3. The author distinguishes between the accounting information system and the management information system
based on: "whether the transactions are financial or nonfinancial that directly affect the processing of financial
transactions." The AIS captures financial transactions to support systems around the revenue, expenditure and
conversion cycles. The MIS captures nonfinancial transactions to support systems for marketing, inventory,
manufacturing and human resources.
4. An example of a financial transaction is: "the purchase of computer." The purchase of a computer adds an
asset to the organization.
5. An example of a nonfinancial transaction is: "log of customer calls." The log of customer calls is a key source of
information for customer service, marketing and the sales departments.
6. The transaction processing system includes which of the following?: "the conversion cycle." The conversion cycle
is included within the transaction processing system because it records cost accounting and production activities.
7. The goal of data processing is: "the production of useful information." Data is not information. Data is data. Data
needs to be consolidated, processed, summa- rized and converted into information for management decision-making.
8. Which of the following is an external end user?: "tax authorities." Tax author- ities are external users who expect
an accurate accounting of tax due. In addition, the non-discretionary reports from the accounting information system
provide what is needed for tax authorities to evaluate tax liability.
9. An appraisal function housed within the organization that performs a wide range of services for management
is: "internal auditing." An appraisal function housed within the organization that performs a wide range of services for
manage- ment is internal auditing. Internal auditors verify the accuracy and security of the information systems and also
work with various business segments to secure and optimize processes.
10.What factor conceptually distinguishes external auditing and internal au- diting?: "constituencies." External
auditing and internal auditing are distinguished by constituencies. Internal auditors focus on company management.
External au-
, D217 AIS MOD/UNIT tests
ditors perform services to assure external investors, tax and regulatory authorities that the financial statements are
complete and accurate.
11.MOD 2- Which system is part of the expenditure cycle?: "cash disburse- ments." Cash disbursements is part
of the expenditure cycle. Cash disbursement is the way a firm pays vendors, creditors, and employees.
12.Both the revenue and the expenditure cycle can be viewed as having two key parts. These key parts are:
"physical and financial." The two key parts of the revenue and expenditure cycle are physical and financial. The physical
portion refers to the documents that support the necessary transactions; the financial portion refers to the effect that the
appropriate transactions have on assets and equity.
13.System flowcharts do which one of the following?: The correct answer is "represent relationships between key
elements of manual and computer systems." System flowcharts represent relationships between key elements of manual
and computer systems. The system flowchart is a graphic representation of the process that is used by the
programmer/analyst and systems auditors to understand the flow of data through the program or system and the
files/functions that are involved from input to storage to output.
14.Which symbol is used to represent a data source or destination of doc- uments and reports in a system
flowchart?: "oval." This symbol is used to represent a data source or destination of documents and reports.
15.Which accounting application is least suited to batch processing?: "sales order processing." Sales order
processing is least suited to batch processing. The production process needs to know as soon as possible if customer
orders are required. At the same time, it is important to know what the potential revenue is at any given time.
16.In contrast to a real-time system, in a batch processing system: "there is a lag between the time when the
economic event occurs, and the financial records are updated." Batch systems group transactions and they process when
it is most efficient, often on an hourly, daily, or weekly basis. Batch systems process trans- actions in bulk when required
or when convenient. These systems are appropriate when there is no urgency to the information.
17.In contrast to a batch processing system, in a real-time system: "processing takes place when the economic event
occurs." In a real-time system processing takes place when the economic event occurs. For example, when an item is
scanned at your local grocery store during checkout, the store inventory, daily sales, and cashier productivity systems are
updated immediately.
18.The coding scheme most appropriate for a chart of accounts is: "block code." The most appropriate coding
scheme for a chart of accounts is block code. As described in the text, the use of block codes allows accounts to be
logically grouped
, D217 AIS MOD/UNIT tests
in blocks. For example, 100 - 199 Current Assets, 200 - 299 Fixed Assets, and so on.
19.When a firm wants its coding system to convey meaning without reference to any other document, it would
choose: "a mnemonic code." When a firm wants its coding system to convey meaning without reference to any other
document,
it would choose a mnemonic code. For example, colleges and universities use mnemonic codes- such as "Acct 101" for
Intro to Accounting- to define courses by department and level. These mnemonic codes provide helpful information
for decision making.
20.The most important advantage of sequential coding is that: "missing or un- recorded documents can be
identified." The most important advantage of sequential coding is that missing or unrecorded documents can be
identified. For example, checks, invoices and orders are commonly coded in sequence to easily identify missing or
unprocessed items.
21.UNIT 2 FORM A - 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?: "Management reporting system (MRS)." The MRS subsystem of the AIS
provides management with special reports that aid in budgeting and forecasting.
22.Which information does the management reporting system (MRS) pro- vide?: "Variance reports." The MRS
provides the internal information needed to run a business (e.g., variance reports).
23.Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and
summarization.
What happens if the information is untimely?: "The decision maker wastes resources analyzing outdated
information." The decision maker spends time and resources on the outdated information, which delays the optimal
decision.
24.Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and
summarization.
What happens if the information is inaccurate?: "The decision maker receives materially wrong information." The
decision maker needs information that has no material errors.
25.Which important information does external feedback about the level of uncollected customer accounts
indicate to the management information sys- tem?: "The organization needs to review its credit-granting policies."
The uncollect- ed customer accounts are an indication that some customers have received too much credit, and
management should review those policies.
1. MOD 1 - The primary input to the transaction processing system is: "a financial transaction." The financial
transaction is the primary input to the transaction processing system. Financial transactions are economic events that
affect assets and equities and are reflected on the financial statements.
2. The major difference between the financial reporting system (FRS) and the management reporting system
(MRS) is the: "FRS provides information to external users; the MRS provides information to internal users." The FRS
produces the financial statements as required by law. The MRS provides information to management for decision
making such as budgets, forecasts, customer orders.
3. The author distinguishes between the accounting information system and the management information system
based on: "whether the transactions are financial or nonfinancial that directly affect the processing of financial
transactions." The AIS captures financial transactions to support systems around the revenue, expenditure and
conversion cycles. The MIS captures nonfinancial transactions to support systems for marketing, inventory,
manufacturing and human resources.
4. An example of a financial transaction is: "the purchase of computer." The purchase of a computer adds an
asset to the organization.
5. An example of a nonfinancial transaction is: "log of customer calls." The log of customer calls is a key source of
information for customer service, marketing and the sales departments.
6. The transaction processing system includes which of the following?: "the conversion cycle." The conversion cycle
is included within the transaction processing system because it records cost accounting and production activities.
7. The goal of data processing is: "the production of useful information." Data is not information. Data is data. Data
needs to be consolidated, processed, summa- rized and converted into information for management decision-making.
8. Which of the following is an external end user?: "tax authorities." Tax author- ities are external users who expect
an accurate accounting of tax due. In addition, the non-discretionary reports from the accounting information system
provide what is needed for tax authorities to evaluate tax liability.
9. An appraisal function housed within the organization that performs a wide range of services for management
is: "internal auditing." An appraisal function housed within the organization that performs a wide range of services for
manage- ment is internal auditing. Internal auditors verify the accuracy and security of the information systems and also
work with various business segments to secure and optimize processes.
10.What factor conceptually distinguishes external auditing and internal au- diting?: "constituencies." External
auditing and internal auditing are distinguished by constituencies. Internal auditors focus on company management.
External au-
, D217 AIS MOD/UNIT tests
ditors perform services to assure external investors, tax and regulatory authorities that the financial statements are
complete and accurate.
11.MOD 2- Which system is part of the expenditure cycle?: "cash disburse- ments." Cash disbursements is part
of the expenditure cycle. Cash disbursement is the way a firm pays vendors, creditors, and employees.
12.Both the revenue and the expenditure cycle can be viewed as having two key parts. These key parts are:
"physical and financial." The two key parts of the revenue and expenditure cycle are physical and financial. The physical
portion refers to the documents that support the necessary transactions; the financial portion refers to the effect that the
appropriate transactions have on assets and equity.
13.System flowcharts do which one of the following?: The correct answer is "represent relationships between key
elements of manual and computer systems." System flowcharts represent relationships between key elements of manual
and computer systems. The system flowchart is a graphic representation of the process that is used by the
programmer/analyst and systems auditors to understand the flow of data through the program or system and the
files/functions that are involved from input to storage to output.
14.Which symbol is used to represent a data source or destination of doc- uments and reports in a system
flowchart?: "oval." This symbol is used to represent a data source or destination of documents and reports.
15.Which accounting application is least suited to batch processing?: "sales order processing." Sales order
processing is least suited to batch processing. The production process needs to know as soon as possible if customer
orders are required. At the same time, it is important to know what the potential revenue is at any given time.
16.In contrast to a real-time system, in a batch processing system: "there is a lag between the time when the
economic event occurs, and the financial records are updated." Batch systems group transactions and they process when
it is most efficient, often on an hourly, daily, or weekly basis. Batch systems process trans- actions in bulk when required
or when convenient. These systems are appropriate when there is no urgency to the information.
17.In contrast to a batch processing system, in a real-time system: "processing takes place when the economic event
occurs." In a real-time system processing takes place when the economic event occurs. For example, when an item is
scanned at your local grocery store during checkout, the store inventory, daily sales, and cashier productivity systems are
updated immediately.
18.The coding scheme most appropriate for a chart of accounts is: "block code." The most appropriate coding
scheme for a chart of accounts is block code. As described in the text, the use of block codes allows accounts to be
logically grouped
, D217 AIS MOD/UNIT tests
in blocks. For example, 100 - 199 Current Assets, 200 - 299 Fixed Assets, and so on.
19.When a firm wants its coding system to convey meaning without reference to any other document, it would
choose: "a mnemonic code." When a firm wants its coding system to convey meaning without reference to any other
document,
it would choose a mnemonic code. For example, colleges and universities use mnemonic codes- such as "Acct 101" for
Intro to Accounting- to define courses by department and level. These mnemonic codes provide helpful information
for decision making.
20.The most important advantage of sequential coding is that: "missing or un- recorded documents can be
identified." The most important advantage of sequential coding is that missing or unrecorded documents can be
identified. For example, checks, invoices and orders are commonly coded in sequence to easily identify missing or
unprocessed items.
21.UNIT 2 FORM A - 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?: "Management reporting system (MRS)." The MRS subsystem of the AIS
provides management with special reports that aid in budgeting and forecasting.
22.Which information does the management reporting system (MRS) pro- vide?: "Variance reports." The MRS
provides the internal information needed to run a business (e.g., variance reports).
23.Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and
summarization.
What happens if the information is untimely?: "The decision maker wastes resources analyzing outdated
information." The decision maker spends time and resources on the outdated information, which delays the optimal
decision.
24.Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and
summarization.
What happens if the information is inaccurate?: "The decision maker receives materially wrong information." The
decision maker needs information that has no material errors.
25.Which important information does external feedback about the level of uncollected customer accounts
indicate to the management information sys- tem?: "The organization needs to review its credit-granting policies."
The uncollect- ed customer accounts are an indication that some customers have received too much credit, and
management should review those policies.
