Chapter 1

Question 1

Which of the following statements below shows the contrast between data and information?

A) Data is the primary output of an accounting information system.
B) Information is the primary output of an accounting information system.
C) Data is more useful in decision making than information.
D) Data and information are the same

Answer 1

Information is the primary output of an accounting information system.

Question 2

When a subsystem’s goals are inconsistent with the goals of another subsystem or with the system as a whole, it creates

Answer 2

goal conflict.

Question 3

The value of information can best be determined by

Answer 3

the benefits associated with obtaining the information minus the cost of producing it.

Question 4

An accounting information system (AIS) processes ________ to provide users with ________.

Answer 4

data; information

Question 5

Information that is free from error or bias and accurately represents the events or activities of the organization is

Answer 5

reliable.

Question 6

Information that does not omit important aspects of the underlying events or activities that it measures is

Answer 6

complete

Question 7

Data must be converted into information to be considered useful and meaningful for decision making. There are seven 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

Answer 7

reliability

Question 8

Sam Jones 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 Sam. 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?

Answer 8

verifiable

Question 9

Which of the following is not one of the three basic types of data about a specific sales transaction that should be captured by an Accounting Information System?

Answer 9

daily sales quota

Question 10

Which of the following tradeoffs between characteristics of useful information is least objectionable?

A) incomplete information received on a timely basis
B) irrelevant information received in an understandable format
C) unreliable information easily accessible
D) verifiable information received in unreadable format

Answer 10

incomplete information received on a timely basis