Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
29) How are "Give and Take" transactions classified in business today and what impact does this have on AIS?
Answer: The concept of "Give and Take" transactions has been used to classify business transactions into "cycles" that have starting points, processes, and end points (or closure). The majority of business transactions can be classified as revenue, expenditure, human resources (payroll), production, and financing cycles. AIS has been modeled after these transaction cycles to achieve its basic functions of collecting and processing data, providing information useful for decision making, and establishing adequate controls.
Concept: Information needs and business processes
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Reflective Thinking
3 Explain how an accounting information system (AIS) adds value to an organization, how it affects and is affected by corporate strategy, and its role in a value chain.
1) An accounting information system must be able to perform which of the following tasks?
A) collect transaction data
B) process transaction data
C) provide adequate controls
D) all of the above
Answer: D
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
2) Which of the following is not an example of a common activity in an AIS?
A) buy and pay for goods and services
B) sell goods and services and collect cash
C) summarize and report results to interested parties
D) record sales calls for marketing purposes
Answer: D
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
3) Which of the following is not one of the components of an AIS?
A) internal controls and security measures
B) people
C) procedures and instructions
D) hardware
Answer: D
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
4) The primary objective of accounting is to
A) implement strong internal controls.
B) provide useful information to decision makers.
C) prepare financial statements.
D) ensure the profitability of an organization.
Answer: B
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
5) Many modern accounting software packages offer separate transaction cycle modules. What is the reason for this?
A) Every organization does not need to implement all of the available transaction cycle modules.
B) Most businesses do not need the revenue cycle module as part of their AIS.
C) The nature of a given transaction cycle is the same irrespective of the type of organization.
D) A properly designed AIS does not use the concept of separate business transaction cycles to process transactions.
Answer: A
Concept: Accounting information systems
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
6) Define an accounting information system.
Answer: An AIS is a system that collects, records, stores, and processes data to produce information for decision makers.