Unit 2 Test Flashcards
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) Transaction processing system (TPS) Management information system (MIS) General ledger system (GLS)
Management reporting system (MRS)
The MRS subsystem of the AIS provides management with special reports that aid in budgeting and forecasting.
Which information does the management reporting system (MRS) provide?
Tax returns Ledger balances Variance reports Financial statements
Variance reports
The MRS provides the internal information needed to run a business (e.g., variance reports).
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The decision maker wastes resources analyzing outdated information.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 information addresses problem-specific concepts. The decision maker reaches the optimal conclusion. The information is useful only to upper management.
The decision maker wastes resources analyzing outdated information.
The decision maker spends time and resources on the outdated information, which delays the optimal decision.
Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization.
What happens if the information is inaccurate?
The decision maker receives problem-specific information. The decision maker receives statistically significant information. The decision maker receives outdated information. The decision maker receives materially wrong information.
The decision maker receives materially wrong information.
The decision maker needs information that has no material errors.
Which important information does external feedback about the level of uncollected customer accounts indicate to the management information system?
The organization needs to review its credit-granting policies. The organization needs to corroborate the external feedback with the internal feedback. The organization has appropriate collected customer accounts. The organization needs more feedback about the customer accounts.
The organization needs to review its credit-granting policies.
The uncollected customer accounts are an indication that some customers have received too much credit, and management should review those policies.
What is a type of data source for the accounting information system (AIS)?
The manager receives a request for information from a prospective customer. Raw material is moved into work-in-process. The accountant researches the current applicable corporate tax rates. The bank requests an audit before it can approve a loan.
Raw material is moved into work-in-process.
Transferring raw material into work-in-process is an internal transaction that involves the movement of resources within the organization. This is a data source for the AIS.
Why would an organization decide to develop its own custom information system?
It is pressed for time. It has a fixed budget. It has unique information needs. It has no specialized IT department.
It has unique information needs.
An organization would develop its own custom information system when there is no readily available solution for its information needs.
n objective of internal control is to mitigate the risk from errors and fraud.
What is the primary risk associated with revenue cycle transactions?
Authorized access to accounting records and confidential reports Shipping customers the correct items or correct quantities Selling to creditworthy customers Inaccurately recording sales and cash receipt transactions in journals and accounts
Inaccurately recording sales and cash receipt transactions in journals and accounts
Recording sales and cash receipt transactions in journals and accounts must be accurate.
What does the letter N in an inverted triangle mean in a system flowchart?
It is a temporary file using a numeric filing system. It is a temporary file, and it is new to the system. It is a permanent file, and it is new to the system. It is a permanent file using a numeric filing system.
The inverted triangle means that it is a temporary file and the N means that it uses a numeric filing system.
Which digital computer file contains account data that are updated by transactions and includes the general ledger and subsidiary ledgers?
Reference file Master file Archive file Transaction file
Master file
The general ledger and subsidiary ledgers are examples of master files.
How would shipping logs be depicted in a system flowchart?
Bucket-shaped symbol Parallelogram symbol Inverted triangle symbol Oval object symbol
Parallelogram symbol
The parallelogram symbol is used to depict many types of hard-copy accounting records.
What is the circular symbol labeled A in the system flowchart?
This is a connector used to show the distribution of services to vendors outside of an organization who will now control the materials. This is a tool used to show the beginning of a series of steps. This is an on-page connector used to replace flow lines that otherwise would cause excessive clutter on the page. This is an icon used to show manual entry and hard copies of documents for a section of the process.
This is an on-page connector used to replace flow lines that otherwise would cause excessive clutter on the page.
The connector replaces the lines that signify the movement. Lines should be used whenever possible to promote clarity. Restricted use of connectors, however, can improve the readability of a flowchart.
What is an advantage of sequential codes?
Sequential codes are assigned to digital documents by the computer application when they are created. Sequential coding schemes are difficult to change when changes are needed. Sequential codes carry no information content beyond their order in the sequence. Sequential coding supports the reconciliation of a batch of transactions at the end of processing.
Sequential coding supports the reconciliation of a batch of transactions at the end of processing.
If the transaction processing system detects any gaps in the sequence of transaction numbers, it alerts management to the possibility of a missing or misplaced transaction.
Why is there no lag time with real-time systems?
Real-time systems assemble transactions into groups for processing. Real-time systems process transactions at the end of each business day. All real-time transactions are exactly the same. Real-time systems process transactions individually when the events occur.
Real-time systems process transactions individually when the events occur.
Because transactions happen at the same time, no time lags exist between occurrence and processing.
What does efficiency mean in the data collection process?
Collecting data that are free from material errors Collecting data only once Collecting valid data Collecting only data relevant to the user's needs
Collecting data only once
Efficiency in data collection means that data is collected only once.
