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Chapter 1 (new version)
MULTIPLE CHOICE
1. A set of two or more interrelated components that interact to achieve a goal is:
a) A system
b) An accounting information system
c) Data
d) Mandatory information
2. This results when a subsystem achieves its goals while contributing to the organization's
overall goal.
a) Goal conflict
b) Goal congruence
c) Value of information
d) Systems congruence
3. Goal conflict may result when
a) A decision or action of a subsystem is inconsistent with the system as a whole.
b) A subsystem achieves its goals while contributing to the organization's overall goal.
c) Duplicate recording, storage and processes are eliminated.
d) The data exceeds the amount the human mind can absorb and process.
4. Facts that are collected, recorded, stored and processed by an information system
a) Information
b) Data
c) Systems
d) Mandatory information
5. Information is
a) What happens when the data exceeds the amount the human mind can absorb.
b) The benefit produced by the information minus the cost of producing it.
c) Facts that are collected, recorded, stored, and processed by an information system.
d) Data that have been organized and processed to provide meaning to a user.
6. Data are
a) facts entered, stored, and processed by an information system.
b) processed output that is useful to decision makers.
c) another word for information.
d) quantitative facts that are not qualitative by nature.
7. Which of the following statements below shows the contrast between data and information?
a) Data is the output of an AIS.
b) Information is the primary output of an AIS.
c) Data is more useful in decision-making than information.
d) Data and information are the same.
8. Information is
a) basically the same as data.
b) raw facts about transactions.
c) potentially useful facts when processed in a timely manner.
d) data that has been organized and processed so that it's meaningful.
9. Humans can absorb and process only so much information. Information __________ occurs
when those limits are passed.
a) overload
b) excess
c) anxiety
d) discretion
10. The value of information can best be defined as
a) how useful it is to decision makers.
b) the benefits produced by possessing and using the information minus the cost of
producing it.
c) how relevant it is.
d) the extent to which it maximizes the value chain.
11. The benefit produced by the information minus the cost of producing it.
a) Goal congruence
b) Information
c) Information overload
d) Value of information
12. An accounting information system (AIS) processes __________ to provide users with
__________.
a) data; information
b) data; transactions
c) information; data
d) data; benefits
13. How many components are found in an AIS?
a) three
b) four
c) five
d) six
14. An accounting information system in part consists of
a) People, hardware and programs.
b) Information, programs and computers.
c) People, procedures, data, software and information technology infrastructure.
d) Internal controls and accounting records.
15. Information that reduces uncertainty, improves decision makers' ability to make predictions,
or confirms or corrects their prior expectations, is said to be
a) Complete
b) Relevant
c) Reliable
d) Timely
16. Information that is free from error or bias and accurately represents the events or activities of
the organization is a) Relevant
b) Reliable
c) Verifiable
d) Timely
17. Information that does not omit important aspects of the underlying events or activities that it
measures is
a) Complete
b) Accessible
c) Relevant
d) Timely
18. When two knowledgeable people acting independently each produce the same information,
this information is said to be a) Complete
b) Relevant
c) Reliable
d) Verifiable
19. Data must be converted into information to be considered useful and meaningful for
decision-making. There are six 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 a) Relevancy
b) Timeliness.
c) Understandability
d) Reliability
20. The primary consideration when producing this type of information is that its benefits
exceeds its costs.
a) Discretionary information
b) Essential information
c) Mandatory information
d) Value of information
21. An AIS is a system of six interrelated components that interact to achieve a goal. One of
these components, which includes both manual and automated activities that involve
collecting, processing, and storing data, is known as
a) Information or data
b) Procedures and instructions
c) Software
d) Information technology infrastructure
22. 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
23. 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) recording of sales calls for marketing purposes
24. 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) Software and hardware
25. An AIS must be able to fulfill three important functions in any organization. One such
function is the collecting and storing of data about activities performed by the organization.
One group that relies on both the adequate collection and transformation of data for decision-
making purposes for an organization is
