ACCOUNTING INFORMATION SYSTEMS
16TH EDITION BY ROMNEY STUDY
GUIDE 2026 – COMPLETE CONCEPT
REVIEW & PRACTICE MATERIALS
(LATEST EDITION)
ACCOUNTING INFORMATION SYSTEMS (AIS) - CONCEPT REVIEW & EXAM PRACTICE
Part 1: AIS Foundation & Conceptual Framework (Questions 1-20)
1. What is the primary objective of an Accounting Information System (AIS)?
A) To produce financial statements for external users.
B) To support stewardship and management decision-making by collecting, processing, and
reporting financial data.
C) To replace human judgment in accounting processes.
D) To manage an organization's customer relationships.
2. Which of the following is NOT one of the three main functions of an AIS as described by
Romney?
A) To efficiently process transaction data.
B) To provide internal financial control.
C) To formulate corporate strategy.
D) To provide information useful for decision-making.
3. The value of information is best defined as:
A) The cost of producing it.
B) The benefits it provides minus the cost of producing it.
C) The volume of data processed.
D) Its relevance to all stakeholders.
4. Which concept describes the potential for data to be accessed, modified, or stolen by
unauthorized individuals?
A) Availability
,B) Confidentiality
C) Integrity
D) Processability
5. The three transaction cycles—expenditure, conversion, and revenue—are primarily used to
process what type of transactions?
A) Only non-financial transactions.
B) Only managerial accounting transactions.
C) Financial transactions related to routine business activities.
D) Strategic planning transactions.
6. What is the purpose of a general ledger?
A) To record detailed data for individual customers.
B) To store summarized transaction data for all accounts in the chart of accounts.
C) To process payroll transactions.
D) To generate sales invoices.
7. Which subsystem is part of the Revenue Cycle?
A) Cash Disbursements
B) Production Planning
C) Sales Order Entry
D) Inventory Control
8. The difference between data and information is that:
A) Data is always digital, while information is analog.
B) Data is processed and organized to become meaningful information.
C) Information is the raw input, and data is the output.
D) There is no significant difference.
9. In the value chain concept, the AIS plays a crucial role in:
A) Only primary activities like outbound logistics.
B) Enhancing the efficiency and effectiveness of all value chain activities.
C) Replacing secondary activities.
D) Isolating accounting from other business functions.
10. Which characteristic of useful information ensures it is sufficiently accurate and free from
bias?
A) Relevance
B) Reliability
,C) Timeliness
D) Verifiability
11. Which professional framework is most directly concerned with internal controls over
financial reporting?
A) ISO 27001
B) ITIL
C) COSO Internal Control Framework
D) GDPR
12. A chart of accounts is designed to:
A) List all employees in the organization.
B) Facilitate the recording of transactions by providing a logical structure for financial accounts.
C) Detail the organizational hierarchy.
D) Serve as a customer relationship management tool.
13. The Expenditure Cycle includes all EXCEPT:
A) Ordering goods and services.
B) Receiving and storing goods.
C) Selling finished goods to customers.
D) Paying suppliers.
14. An AIS must interface with which other major organizational system?
A) The Human Resources system.
B) The Marketing system.
C) The Supply Chain Management system.
D) All of the above.
15. The primary purpose of a journal in an AIS is to:
A) Provide a chronological record of transactions.
B) Store ending account balances.
C) Generate financial statements.
D) Replace the general ledger.
16. Which statement about cloud-based AIS is TRUE?
A) It eliminates all internal control responsibilities of the company.
B) It typically involves a subscription model and access via the internet.
C) It is always more expensive than on-premise systems in the long run.
D) It requires no business process reengineering.
, 17. The conversion cycle is most closely associated with which business function?
A) Sales and Marketing
B) Production/Operations
C) Finance
D) Human Resources
18. The "sourcing" activity in the expenditure cycle is now commonly referred to as:
A) Accounts Payable
B) Procurement
C) Cash Disbursements
D) Inventory Management
19. AIS plays a strategic role by:
A) Providing data for enterprise resource planning (ERP) and analytics.
B) Limiting itself to bookkeeping tasks.
C) Functioning independently of other systems.
D) Using only historical cost data.
20. Enterprise Resource Planning (ERP) systems integrate an AIS with:
A) Only manufacturing systems.
B) All key business processes across the organization.
C) Only external partner systems.
D) Legacy systems without modification.
Part 2: Documentation & Transaction Processing (Questions 21-40)
21. What is the primary purpose of system documentation tools like flowcharts and DFDs?
A) To write computer code.
B) To understand, evaluate, and improve system controls and processes.
C) To train users on specific software keystrokes.
D) To replace internal audit functions.
22. In a Data Flow Diagram (DFD), a square represents a(n):
A) Data Store
B) Process
C) External Entity
D) Data Flow
16TH EDITION BY ROMNEY STUDY
GUIDE 2026 – COMPLETE CONCEPT
REVIEW & PRACTICE MATERIALS
(LATEST EDITION)
ACCOUNTING INFORMATION SYSTEMS (AIS) - CONCEPT REVIEW & EXAM PRACTICE
Part 1: AIS Foundation & Conceptual Framework (Questions 1-20)
1. What is the primary objective of an Accounting Information System (AIS)?
A) To produce financial statements for external users.
B) To support stewardship and management decision-making by collecting, processing, and
reporting financial data.
C) To replace human judgment in accounting processes.
D) To manage an organization's customer relationships.
2. Which of the following is NOT one of the three main functions of an AIS as described by
Romney?
A) To efficiently process transaction data.
B) To provide internal financial control.
C) To formulate corporate strategy.
D) To provide information useful for decision-making.
3. The value of information is best defined as:
A) The cost of producing it.
B) The benefits it provides minus the cost of producing it.
C) The volume of data processed.
D) Its relevance to all stakeholders.
4. Which concept describes the potential for data to be accessed, modified, or stolen by
unauthorized individuals?
A) Availability
,B) Confidentiality
C) Integrity
D) Processability
5. The three transaction cycles—expenditure, conversion, and revenue—are primarily used to
process what type of transactions?
A) Only non-financial transactions.
B) Only managerial accounting transactions.
C) Financial transactions related to routine business activities.
D) Strategic planning transactions.
6. What is the purpose of a general ledger?
A) To record detailed data for individual customers.
B) To store summarized transaction data for all accounts in the chart of accounts.
C) To process payroll transactions.
D) To generate sales invoices.
7. Which subsystem is part of the Revenue Cycle?
A) Cash Disbursements
B) Production Planning
C) Sales Order Entry
D) Inventory Control
8. The difference between data and information is that:
A) Data is always digital, while information is analog.
B) Data is processed and organized to become meaningful information.
C) Information is the raw input, and data is the output.
D) There is no significant difference.
9. In the value chain concept, the AIS plays a crucial role in:
A) Only primary activities like outbound logistics.
B) Enhancing the efficiency and effectiveness of all value chain activities.
C) Replacing secondary activities.
D) Isolating accounting from other business functions.
10. Which characteristic of useful information ensures it is sufficiently accurate and free from
bias?
A) Relevance
B) Reliability
,C) Timeliness
D) Verifiability
11. Which professional framework is most directly concerned with internal controls over
financial reporting?
A) ISO 27001
B) ITIL
C) COSO Internal Control Framework
D) GDPR
12. A chart of accounts is designed to:
A) List all employees in the organization.
B) Facilitate the recording of transactions by providing a logical structure for financial accounts.
C) Detail the organizational hierarchy.
D) Serve as a customer relationship management tool.
13. The Expenditure Cycle includes all EXCEPT:
A) Ordering goods and services.
B) Receiving and storing goods.
C) Selling finished goods to customers.
D) Paying suppliers.
14. An AIS must interface with which other major organizational system?
A) The Human Resources system.
B) The Marketing system.
C) The Supply Chain Management system.
D) All of the above.
15. The primary purpose of a journal in an AIS is to:
A) Provide a chronological record of transactions.
B) Store ending account balances.
C) Generate financial statements.
D) Replace the general ledger.
16. Which statement about cloud-based AIS is TRUE?
A) It eliminates all internal control responsibilities of the company.
B) It typically involves a subscription model and access via the internet.
C) It is always more expensive than on-premise systems in the long run.
D) It requires no business process reengineering.
, 17. The conversion cycle is most closely associated with which business function?
A) Sales and Marketing
B) Production/Operations
C) Finance
D) Human Resources
18. The "sourcing" activity in the expenditure cycle is now commonly referred to as:
A) Accounts Payable
B) Procurement
C) Cash Disbursements
D) Inventory Management
19. AIS plays a strategic role by:
A) Providing data for enterprise resource planning (ERP) and analytics.
B) Limiting itself to bookkeeping tasks.
C) Functioning independently of other systems.
D) Using only historical cost data.
20. Enterprise Resource Planning (ERP) systems integrate an AIS with:
A) Only manufacturing systems.
B) All key business processes across the organization.
C) Only external partner systems.
D) Legacy systems without modification.
Part 2: Documentation & Transaction Processing (Questions 21-40)
21. What is the primary purpose of system documentation tools like flowcharts and DFDs?
A) To write computer code.
B) To understand, evaluate, and improve system controls and processes.
C) To train users on specific software keystrokes.
D) To replace internal audit functions.
22. In a Data Flow Diagram (DFD), a square represents a(n):
A) Data Store
B) Process
C) External Entity
D) Data Flow
