Test Bank for Accounting Information Systems, 13th Edition By Marshall Romney, Paul Steinbart All Chapters 1-22

Test Bank for Accounting Information Systems, 13e Marshall Romney
Paul Steinbart
Accounting Information Systems, 13e (Romney/Steinbart)
Chapter 1 Accounting Information Systems: An Overview

1.1 Distinguish data from information, discuss the characteristics of useful information, and
explain how to determine the value of information.

1) Which of the following statements below shows the contrast between data and information?
A) Data is the output of an AIS.
B) Information is the primary output of an AIS.
C) Data is more useful in decision making than information.
D) Data and information are the same.
Answer: B
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic

2) Information is best described as
A) raw facts about transactions.
B) data that has been organized and processed so that it is meaningful to the user.
C) facts that are useful when processed in a timely manner.
D) the same thing as data.
Answer: B
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic

3) The value of information can best be determined by
A) its usefulness to decision makers.
B) its relevance to decision makers.
C) the benefits associated with obtaining the information minus the cost of producing it.
D) the extent to which it optimizes the value chain.
Answer: C
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytic

4) An accounting information system (AIS) processes to provide users with .
A) data; information
B) data; transactions
C) information; data
D) data; benefits
Answer: A
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic



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,5) information reduces uncertainty, improves decision makers' ability to make
predictions, or confirms expectations.
A) Timely
B) Reliable
C) Relevant
D) Complete
Answer: C
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic

6) Information that is free from error or bias and accurately represents the events or activities of
the organization is
A) relevant.
B) reliable.
C) verifiable.
D) timely.
Answer: B
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic

7) Information that does not omit important aspects of the underlying events or activities that it
measures is
A) complete.
B) accessible.
C) relevant.
D) timely.
Answer: A
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic

8) Information is when two knowledgeable people independently produce the same
information.
A) verifiable
B) relevant
C) reliable
D) complete
Answer: A
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic




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,9) Data must be converted into information to be considered useful and meaningful for decision
making. There are six characteristics that make information both useful and meaningful. If
information is free from error or bias and accurately represents the events or activities of the
organization, it is representative of the characteristic of
A) relevancy.
B) timeliness.
C) understandability.
D) reliability.
Answer: D
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytic

10) Inventory information is provided in real time by a firm's accounting information system.
The accuracy of this information is questionable, however, since the production manager often
reports stock outs of components that the system indicates are in stock. Which of the following
characteristics of useful information is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: B
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytic

11) Cheryl Metrejean has been the controller of Downtown Tires for 25 years. Ownership of the
firm recently changed hands and the new owners are conducting an audit of the financial records.
The audit has been unable to reproduce financial reports that were prepared by Ms. Metrejean.
While there is no evidence of wrongdoing, the auditors are concerned that the discrepancies
might contribute to poor decisions. Which of the following characteristics of useful information
is absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: F
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytic


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, 12) In 2003, Singh Manufacturing implemented a Web-based information system that allows all
employees to access mission-critical information. The intention was to increase production
efficiency. Unfortunately, it had the opposite effect, as deliveries fell behind schedule and costs
increased. Shaman Gupta, the director of information technology services, asked Ashlee Wells to
come in and talk with him about the system. Ashlee is a long-time employee of Singh, and her
opinion is valued by her peers and by her supervisor.
"So Ashlee, how's it going down there in the shop?"
"Not so good, Shaman. Used to be we got a weekly pick list so we knew how to plan production.
Now, we got that computer system. Most of us can't figure out how to use it to do our jobs. Is
there some way to print out a pick list?"
Shaman thought for a while before responding. "Well, Ashlee, to tell you the truth, I'm not so
sure how to do it myself, but there must be a way. We'll bring in the consultants that helped us
build the system. Maybe they can help."
Which of the following characteristics of useful information is absent in the situation described
above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: E
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytic

13) Wisconsin Dells, Wisconsin, is a popular tourist destination. During the winter months, the
population dwindles to a meager few, but when summer comes, the size of the town surges.
Hunter Jackson is the town sanitation engineer. When the size of the town surges, so do his
responsibilities. Among them is management of the sewage processing volume.
In an interview with the local paper, Hunter complained that a report on tourist population that
he uses to adjust processing volume refers to data that was collected four days ago and it takes
him a week to make adjustments. Which of the following characteristics of useful information is
absent in the situation described above?
A) relevant
B) reliable
C) complete
D) timely
E) understandable
F) verifiable
G) accessible
Answer: D
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytic


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