69 Test Bank for Accounting Information Systems 13th
Edition by Romney
Multiple Choice Questions
What is a key decision that needs to be made with regards to
acquiring equipment?
1.

A) the location

2.

B) pro forma income statement

3.

C) how much capital to acquire

4.

D) job descriptions

Which of the following tradeoffs between characteristics of useful
information is least objectionable?
1.

A) incomplete information received on a timely basis

2.

B) irrelevant information received in an understandable format


A) customer

2.

B) vendor


3.

C) government agencies

4.

D) CEO

Message left on voicemail: "Hi Nikki! Just landed at the airport.
How about dinner this evening if you're available. Call me!" Which
of the following characteristics of useful information is absent in
the situation described above?
1.

A) relevant

2.

B) reliable

3.

C) complete


4.

D) how much capital to acquire

In which transaction cycle would information for paying interest be
most likely to pass between internal and external accounting
information systems?
1.

A) the revenue cycle

2.

B) the expenditure cycle

3.

C) the human resources / payroll cycle

4.

D) the financing cycle


Identify the piece of information below that is typically needed to
acquire inventory.
1.

A) job descriptions


________ information reduces uncertainty, improves decision
makers' ability to make predictions, or confirms expectations.
1.

A) Timely

2.

B) Reliable

3.

C) Relevant

4.

D) Complete

Information that is free from error or bias and accurately
represents the events or activities of the organization is
1.

A) relevant.

2.

B) reliable.

3.

activities of the organization, it is representative of the
characteristic of
1.

A) relevancy.

2.

B) timeliness.

3.

C) understandability.

4.

D) reliability.

Information is ________ when two knowledgeable people
independently produce the same information.
1.

A) verifiable

2.

B) relevant

3.


2.

B) management

3.

C) employees

4.

D) CEO

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?
1.

A) name of the employee who completed the sale

2.

B) daily sales quota

3.

C) product sold

4.

D) date


G) accessible

What is a key decision that needs to be made with regards to
acquiring inventory?


1.

A) which credit cards to accept

2.

B) which employees to hire

3.

C) which vendors to use

4.

D) how much capital to acquire

In which transaction cycle would information for hiring employees
be most likely to pass between internal and external accounting
information systems?
1.

A) the revenue cycle


4.

D) timely

5.

E) understandable

6.

F) verifiable

7.

G) accessible

In which transaction cycle would information for inventory
purchases be most likely to pass between internal and external
accounting information systems?


1.

A) the revenue cycle

2.

B) the expenditure cycle

3.

B) data that has been organized and processed so that it is meaningful to
the user.

3.

C) facts that are useful when processed in a timely manner.

4.

D) the same thing as data.

Which of the following statements below shows the contrast
between data and information?
1.

A) Data is the output of an AIS.

2.

B) Information is the primary output of an AIS.

3.

C) Data is more useful in decision making than information.

4.

D) Data and information are the same.

Identify the piece of information below that is typically needed to


C) competitors.

4.

D) the government.

Information that does not omit important aspects of the underlying
events or activities that it measures is
1.

A) complete.

2.

B) accessible.

3.

C) relevant.

4.

D) timely.

In which transaction cycle would information for borrowing money
be most likely to pass between internal and external accounting
information systems?
1.



D) capacity needs

In which transaction cycle would customer sales transaction
information be most likely to pass between internal and external
accounting information systems?
1.

A) the revenue cycle

2.

B) the expenditure cycle

3.

C) the human resources / payroll cycle

4.

D) the financing cycle

Baggins Incorporated identifies new product development and
product improvement as the top corporate goals. An employee
developed an innovation that will correct a shortcoming in one of
the company's products. Although Baggins current Return on
Investment (ROI) is 15%, the product innovation is expected to
generate ROI of only 12%. As a result, the employee fails to
follow up. As a result, awarding bonuses to employees based on
ROI resulted in


4.

D) obtain internet access.

Paid time-off policies, job descriptions, and procedures manuals
are examples of information needed to support key decisions in
what business process?
1.

A) hire and train employees

2.

B) acquire inventory

3.

C) sell merchandise

4.

D) collect payment from customers

69 Free Test Bank for Accounting Information Systems
13th Edition by Romney Multiple Choice Questions Page 2
An AIS that makes information more easily accessible and more
widely available is likely to increase pressure for
1.


Which of the following is a true statement?


1.

A) Business strategy directly influences AIS, but not information technology.

2.

B) Information technology directly influences organizational culture, but not
business strategy.

3.

C) Organizational culture directly influences business strategy, but not AIS.

4.

D) AIS directly influences information technology, but not business strategy.

In Chapter 1, Figure 1-4 shows the factors that influence the
design of AIS. The diagram shows a bi-directional arrow between
the organizational culture and the AIS. The reason for this twoway interchange between organizational culture and AIS is
1.

A) that the AIS should not influence the values of the organizational culture.

2.

B) because the organization's culture influences the AIS, and likewise the

transaction cycle modules. What is the reason for this?
1.

A) Every organization does not need to implement all of the available
transaction cycle modules.

2.

B) Most businesses do not need the revenue cycle module as part of their
AIS.


3.

C) The nature of a given transaction cycle is the same irrespective of the
type of organization.

4.

D) A properly designed AIS does not use the concept of separate business
transaction cycles to process transactions.

The process of creating value for customers is the result of nine
activities that form a
1.

A) value chain.

2.


1.

A) revenue cycle.

2.

B) expenditure cycle.

3.

C) human resources cycle.

4.

D) financing cycle.

Obtaining financing from outside investors is part of which cycle?
1.

A) the revenue cycle

2.

B) the financing cycle

3.

C) the production cycle



C) cashier

4.

D) credit manager

The transaction cycle approach yields efficiencies when
processing of a large number of transactions because
1.

A) a large number of transactions within a given cycle can be categorized
into a relatively small number of distinct types.

2.

B) transaction cycles are easier to computerize.

3.

C) the transaction cycle approach represents the natural order of business.

4.

D) transaction cycles are easy to understand.

Which of the following is not an example of a common activity in
an AIS?
1.

A) buy and pay for goods and services

D) technology and support.

Paying state payroll taxes is part of which transaction cycle?
1.

A) human resources/payroll

2.

B) expenditure

3.

C) financing

4.

D) revenue

Groups of related business activities such as the acquisition of
merchandise and payment of vendors are called
1.

A) transaction cycles.

2.

B) economic cycles.

3.

A) improving products or services through information that increases quality
and reduces costs.

2.

B) providing timely and reliable information to decision makers.

3.

C) creating new products.

4.

D) both A and B

A well-designed AIS can improve the decision making in an
organization. Identify the statement below that describes a
situation where an AIS may actually inhibit effective decision
making.
1.

2.

A) An AIS provides to its users an abundance of information without any
filtering or condensing of such information.
B) An AIS identifies situations requiring management action.

3.

C) An AIS reduces uncertainty, and therefore accounting information can


A) organizational culture.


2.

B) customer base.

3.

C) external financial statement users.

4.

D) production activity.

Accounting information plays major roles in managerial decision
making by
1.

A) identifying situations requiring management action.

2.

B) reducing uncertainty.

3.

C) providing a basis for choosing among alternative actions.



3.

C) information produced from data is accurate.

4.

D) both A and C

The American Institute of Certified Public Accountants (AICPA)
has recognized the importance of AIS and the major impact
information technology has on the area of accounting. To
recognize individual CPAs who have met educational and
experiential requirements in this area, the group formally created
the designation known as


1.

A) the Certified Information Auditor.

2.

B) the Certified Internal Auditor.

3.

C) the Certified Information Technology Professional.

4.


3.

C) provide adequate controls

4.

D) all of the above

Which of the following is not one of the components of an AIS?
1.

A) internal controls and security measures

2.

B) people

3.

C) procedures and instructions

4.

D) hardware

The ________ is not a transaction cycle.
1.

A) general ledger and reporting cycle


Which of the following is a primary activity in the value chain?
1.

A) infrastructure

2.

B) technology

3.

C) purchasing

4.

D) marketing and sales

Which of the following is not an example of how an AIS adds
value to an organization?
1.

A) All employees at a hospital can access and update patient records from
any computer terminal in the hospital.

2.

B) A customer service representative can find a customer's account data,
purchase history, payment history, and salesperson's name while on the
phone with the customer, to resolve issues quickly.

1.

A) to provide an educated guess regarding what is expected to occur in the
near future

2.

B) to engage in data warehousing

3.

C) to engage in a low-cost strategy

4.

D) to design the most effective accounting information system