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The purpose of the conversion process is to transform material, labor and overhead into
a finished product. To accomplish that purpose, organizations can use one of three
systems. Which of the following pairs includes examples of products that would use the
same system?
A. Decks of playing cards, compact discs
B. Compact discs, made-to-order smoothies
C. Decks of playing cards, made-to-order smoothies
D. All of the pairs would use the same system.
Consider the following systems flowchart as you respond to the question:
The flowchart comes closest to representing:
A. Porter's value chain.
B. The acquisition/payment process.
C. Both porter's value chain and the acquisition/payment process.
D. Neither porter's value chain nor the acquisition/payment process.
Arnold, having arrived at a preliminary decision about how to resolve an ethical
dilemma, discussed his alternatives with a trusted co-worker. Based on the
Langenderfer and Rockness model, what should he do next?
A. Determine the stakeholders involved in the ethical dilemma.
B. Evaluate the consequences of his proposed action.
C. Decide what to do.
D. Determine which school of ethical thought his co-worker follows.
Consider the following short case as you respond to the question:
VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT
Corporation; credit terms were 2/10, n/30. VLC paid the outgoing freight charge of $10.
PRT paid the invoice within the discount period.
Inclusive of all the transactions that affect the income statement, VLC's gross profit on
the sale was:
A. $100
B. $90
C. $94
D. $84
Similarities between legal & regulatory risk and directors' and officers' liability risk in
Brown's taxonomy include:
A. The cause of the risk.
B. The things directly affected by the risk.
C. Both the cause of the risk and the things directly affected by the risk.
D. Neither the cause of the risk nor the things directly affected by the risk.
Please consider the following short case as you respond to the question:
Sue and Sally are partners in a small local bakery specializing in wedding and birthday
cakes. They use a simple Excel spreadsheet to record journal entries and prepare
financial statements and tax returns. Robert, the owner of a consulting company that
installs and maintains ERP systems, has recently approached them about the possibility
of implementing an ERP system in their operations. If they accept his offer, Robert will
provide a series of online tutorials to help them learn about the new system. Sue and
Sally believe the implementation of the ERP system will make it easier for them to
borrow money to expand the bakery.
Which of the following best pairs a fact from the case with an appropriate cause of ERP
system failures?
A. The company is a small local bakery; a bad match between ERP software and
organizational processes
B. Sue and Sally are partners; poor leadership from top management.
C. Both the company is a small local bakery; a bad match between ERP software and
organizational processes and Sue and Sally are partners; poor leadership from top
management
D. Neither the company is a small local bakery; a bad match between ERP software and
organizational processes nor Sue and Sally are partners; poor leadership from top
management
Accounting information systems is an important area of study for future accountants
because a well-designed AIS can respond to many elements of the FASB Conceptual
Framework. All of the following are parts of the conceptual framework except:
A. Principles of debit and credit
B. Objective of financial reporting
C. Elements of financial statements
D. Qualitative characteristics of accounting information
Missouri Can Corporation (MCC) manufactures and sells a variety of can types, such as
soft drink cans, oil cans and many others. MCC has adopted a functional organization
structure that includes departments for accounting, marketing, manufacturing, human
resources and information systems. Some clients have standing repeat purchase orders
for a stated number of cans; MCC processes those orders monthly and ships the cans
via common carrier. Dedicated sales staff members work with such clients, while other
sales staff members are responsible for soliciting new clients. Considering the
perspective of both MCC and its repeat customers, which of the following business
processes is not included in the narrative?
A. acquisition/payment
B. conversion
C. financing
D. sales/collection
Data in a view-driven AIS are often stored in multiple places, such as:
A. Journals.
B. Ledgers.
C. Both journals and ledgers.
D. Neither journals nor ledgers.
Which of the following steps in the accounting cycle occurs first?
A. Analyze transactions.
B. Close the temporary accounts to retained earnings.
C. Prepare an unadjusted trial balance.
D. Record the transactions in a journal.
"Control activities" are one element of the COSO ERM framework. To develop control
activities, organizations may need to apply: (i) the FASB Conceptual Framework, (ii)
expectancy theory, (iii) the generalized model of business process management.
A. (i) and (ii) only
B. (ii) and (iii) only
C. (i) and (iii) only
D. (i), (ii) and (iii)
At what level of the capability maturity model are managers first involved?
A. Chaotic
B. Repeatable
C. Defined
D. Managed
Thuy is an accountant at RPA Corporation. When RPA sells inventory, Thuy receives a
sales invoice indicating the number of units sold, the sales price, sales tax assessed and
the total amount paid by the customer. Thuy makes a journal entry using general ledger
software. At the end of each quarter, Thuy prepares RPA's general-purpose financial
statements, as well as a comparison of budgeted sales to actual sales. The
general-purpose financial statements are sent to the SEC, while the budgeted-to-actual
comparison is reviewed by RPA's management. From the preceding paragraph, give one
example of each of the following elements from the definition of AIS presented in the
text:
a. Activity
b. Data
c. Document
d. External decision maker
e. Information
f. Internal decision maker
g. Processing
h. Technology
Which of the following statements about AIS is most true?
A. Compared to introductory accounting, AIS is more likely to have problems with
nondeterministic answers.
B. Compared to introductory accounting, AIS is less likely to have problems with
nondeterministic answers.
C. Introductory accounting and AIS are equally likely to have problems with
nondeterministic answers.
D. All problems in AIS have nondeterministic answers.
View-driven accounting information systems have been criticized because they:
A. Focus on a very small, well-defined group of important business events.
B. Often process data in batches.
C. Both focus on a very small, well-defined group of important business events and
often process data in batches
D. Neither focus on a very small, well-defined group of important business events nor
often process data in batches
Specify the data flow diagram symbol that would be used to represent each item in the
list below.
a. Bank
b. Check
c. Disburse cash
d. Inventory master file
e. Purchase/inventory file
f. Purchase inventory
g. Purchase order
h. Vendor
i. Vendor file
j. Vendor invoice
Refer to the following case as you respond to the question:
The Celebration Theatre is a small, independent theatre that puts on 12 plays per year.
30 days before the start of each calendar quarter, Celebration prepares advertising for
the productions in the upcoming quarter. They advertise on their web site, via e-mail to
their season subscribers and via direct mail and brochures to others.
Patrons can buy tickets for a single play; alternatively, they can subscribe to all three
plays each quarter. Quarterly subscriptions offer a 25% discount from the prices of
single tickets. Patrons may purchase tickets over the phone, at the box office or via the
theatre's web site. All tickets are held at the box office where they can be picked up as
early as one week prior to the performance. The theatre has an "open seating" plan, so
patrons do not reserve a specific seat at any performance.
If tickets are purchased in person at the box office, non-subscribers may pay with cash
or a major credit card; subscribers can pay with cash, major credit card or check. All
tickets purchased over the phone or via the web site must be paid for with a major credit
card. Celebration maintains an electronic database to track all ticket sales; paper tickets
are printed at least ten days prior to a performance.
Any paid tickets that are not claimed at least thirty minutes prior to the performance are
sold on a "first-come, first-serve" basis at a 50% discount.
Refer to the previously presented set of flowcharting symbols labeled Symbol A
through Symbol J. Which symbol would represent the tickets?
A. Symbol A
B. Symbol B
C. Symbol F
D. Symbol I
To answer the question, consider the following partial REA model in the context of the
case:
ABC Consulting's employees include management, consultants and office staff. The
company accepts engagements related to internal control design and evaluation, as well
as enterprise risk management plans. A customer can purchase the two services
independently of one another. The office staff bills clients on a monthly basis with
terms of 2/10, n/30. All consulting clients must sign a contract, which is also signed by
an ABC manager. One member of ABC's management team assigns at least one
consultant to work with the customer until the engagement is complete. Consultants can
be assigned to multiple engagements simultaneously, but every consultant must always
be working on at least one engagement. Each client may have only one contract with
ABC at a time.
If Box B is labeled "consultants," Box A could be labeled:
A. Assign employees
B. Complete engagement
C. Either assign employees or complete engagement
D. Neither assign employees nor complete engagement
Brett and Erin are accountants working for XMP Corporation; Brett is very interested in
working his way up to being XMP's chief financial officer. He believes if he completes
all his assigned tasks well before their established deadlines and controls costs in his
area, he will be promoted. He is confident he can achieve those two goals. Which of the
following best pairs an element of expectancy theory with a phrase that illustrates it?
A. Expectancy: confident he can achieve those two goals.
B. Instrumentality: very interested in working his way up to being XMP's chief
financial officer.
C. Valence: confident he can achieve those two goals.
D. Instrumentality: completes all his assigned tasks well before their established
deadlines.
