TEST BANK – Accounting Information Systems 1st Edition by Arline Savage | Complete PDF Exam Questions & Answers 2025/2026

TEST BANK

Accounting Information System 1st Edition

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
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




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,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.
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
2

,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.
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




3

, 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
A) a company's plan for operations.
B) a company's plan for making a profit.
C) a company's plan for identifying customers.
D) a company's plan for production.
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: Knowledge
AICPA: AC: Systems and Process Management

12) What kind of business model should an entrepreneurial application developer consider for a
new smartphone game that will allow users to pay for additional capabilities and/or lives during
the game?
A) Franchise
B) Subscription
C) Freemium
D) Peer-to-peer
Answer: C
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




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