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Joe has completed all his accounting coursework and is ready to graduate. In his
education, he has learned how to: analyze source documents, use Excel, make journal
entries and prepare tax returns. Which generic element of the AIS is missing from that
list?
A. Inputs
B. Outputs
C. Storage
D. Processes
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/ VLC paid the outgoing freight charge of $10.
PRT paid the invoice within the discount period.
The entries in VLC's accounting information system to record all the preceding events
will include all of the following except:
A. A debit to cost of goods sold.
B. A debit to delivery expense.
C. A credit to gross profit.
D. A credit to inventory.
Refer to theA. The client database will not be shown in the context diagram.
B. The external entity "client" must have at least three data flows coming out of it.
C. The external entity "client" must have at least one data flow going into it.
D. All of these statements are true.
Internal controls in the acquisition/payment process should address which of the
following forms of risk?
A. Liquidity risk
B. Human error risk
C. Both liquidity risk and human error risk
D. Neither liquidity risk nor human error risk
ELH Corporation's process for buying inventory is well defined; the process also has
metrics that establish goals for the process. Which level of the capability maturity
model best describes ELH's inventory purchase process?
A. Repeatable
B. Defined
C. Managed
D. Optimized
An internal auditor is given responsibility for reviewing selected XBRL-tagged
documents as a form of internal control. If the internal auditor does not fulfill that
responsibility, which of the following may help explain and correct the problem?
A. Expectancy theory
B. Weighted-rating model
C. Generic AIS elements
D. AICPA Core Competencies framework
Nestor and Maureen are partners in a small consulting firm located in the Republic of
Bufflufia; the firm has six employees. For the last five years, the firm has focused on
tax planning and tax return preparation. But, Nestor and Maureen are now interested in
expanding the firm's scope of services. They are considering risk management
consulting, fraud examination and business valuation as potential areas to expand the
firm. They are sure at least three of their six employees would put effort into at least
one of those three areas, but expanding the firm's services would require additional
training for everyone.
Business valuation is the process of estimating the economic value of an owner's
interest in a business, often for the purpose of buying/selling that ownership interest.
Based on the short case above, which of the following statements is most true?
A. Expanding the business into business valuation may require creating or updating the
firm's risk management plan.
B. Expectancy theory can be useful both in deciding whether to expand the business
and in working with future business valuation clients.
C. Both expanding the business into business valuation may require creating or
updating the firm's risk management plan and expectancy theory can be useful both in
deciding whether to expand the business and in working with future business valuation
clients are true.
D. Neither expanding the business into business valuation may require creating or
updating the firm's risk management plan nor expectancy theory can be useful both in
deciding whether to expand the business and in working with future business valuation
clients is true.
Which of the following is most reflective of virtue ethics?
A. In making ethical decisions, Annie strives to be true to her basic ethical nature.
B. Jeff inflated his division's sales to get a bigger bonus for himself.
C. Michelle reported fraud she had discovered because she believes that lying is always
wrong.
D. Shan agreed to coach as many CPA exam candidates as possible, in spite of his busy
schedule.
Eugene is a self-employed business owner. In February 2011, he gathered together his
income and expense records for 2010. He used them, along with appropriate software,
to prepare his tax return, which he then transmitted to the Internal Revenue Service.
Has Eugene used an accounting information system based on the definition provided in
the text?
A. Yes, because he used software to prepare his tax return.
B. Yes, because all elements of the definition are present.
C. No, because all accounting information systems must produce general purpose
financial statements.
D. No, because no internal decision maker is mentioned.
Consider the following short case as you respond to the question:
Robert is the president and CEO of Computer Solutions; the firm's main activity is
installing enterprise resource planning software. When a client calls Robert, he does an
"intake interview" where he assesses the client's needs and learns about their company.
Robert tries to interview at least a dozen people at each client, including top
management and mid- and lower-level employees.
What should Robert do immediately after he completes the interviews?
A. Determine the client's risk exposures and design appropriate internal controls.
B. Recommend the client purchase a specific ERP software package.
C. Start creating transaction, master and junction files on the client's network.
D. Test the current system.
BSP Corporation purchased inventory from RSR Corporation on account, $1,000. BSP
also paid $100 freight to reimburse RSR for its payment to the common carrier that
transported the merchandise. The $100 freight charge is likely to be found on:
A. The bill of lading.
B. RSR Corporation's invoice.
C. Both the bill of lading and RSR Corporation's invoice.
D. Either the bill of lading or RSR Corporation's invoice, but not both.
Gloria wrote a paper on the AICPA core competencies for her accounting information
systems class. She organized the paper in three main parts: broad business perspective
competencies, functional competencies, conceptual framework competencies. In terms
of the UMUC criteria for information evaluation, which of the following statements is
most true?
A. Gloria must add at least one section for the paper to have sufficient coverage.
B. Gloria must add one section and delete one section for the paper to have sufficient
coverage.
C. Unless the paper is published within six months, it will not be current.
D. The section on conceptual framework competencies must discuss all elements of the
conceptual framework.
Consider the following case as you respond to the questions:
HSO Corp. designs, manufactures and sells golf carts, scooters and similar vehicles.
When a prospective client contacts one of their seven corporate offices, the office
manager fills out an "intake questionnaire" to determine if HSO can meet the
prospective client's needs. The office manager assembles a team of employees with
expertise in design, production, marketing and accounting; the team reviews the intake
questionnaire and determines if HSO can take on the order. If so, the office manager
prepares a three-page written proposal for the prospective client; the proposal explains
the responsibilities of both HSO and the client, along with a timeline and a budget. The
proposal is forwarded to the prospective client electronically, and the client has ten
calendar days to accept it. If HSO cannot take on the order, the prospective client
receives an automatically generated form letter; if the prospective client does not accept
the proposal within ten calendar days, they receive a different form letter. The new
client remits half of the fee at the time the proposal is accepted, and HSO prepares
weekly progress reports as the project moves forward. The reports are filed in HSO's
database; a hard copy is sent to the client. On a monthly basis, HSO's office manager
prepares a comprehensive status report for all current engagements. One week before
each project is concluded, HSO bills the client for half of the remaining amount due;
after the client has paid all outstanding invoices, HSO completes the work and bills the
client for all remaining amounts. HSO delivers the finished product; the client must pay
the full amount due within 30 days of the final invoice date. If the client pays within 15
days, HSO gives a 3% discount off the amount due.
If HSO maintains a relational database to track proposals and projects, which object(s)
would it use to prepare client invoices?
A. table and query only
B. table and report only
C. query and report only
D. table, query and report
Pablo had been asked by his supervisor to create a document explaining the process of
paying an invoice. Based on research results reported by Bradford et al.:
A. he is more likely to create a flowchart than a data flow diagram.
B. he is more likely to create a data flow diagram than a flowchart.
C. he is highly likely to use some form of information technology to complete the task.
D. he is highly unlikely to use some form of information technology to complete the
task.
Consider the following statements as you answer the question:
i. Felix, a cash receipts clerk, applied Allison's payment to the invoices indicated on her
remittance advice.
ii. In purchasing books, Allison filled out a form on a bookstore's web site.
iii. The bookstore's web site verified Allison's credit limit.
iv. William, a warehouse worker, prepared Allison's books for shipment.
Which of these statements most clearly relates to the third step in the sales/collection
process?
A. i
B. ii
C. iii
D. iv
Consider the flowchart below (Figure TB13-4). Recommend improvements to the
acquisition/payment process depicted.
The chapter discussed four kinds of flowcharts. Differentiate them based on their
purpose, use and relationship to accounting information systems.
List the six design principles associated with flowcharting discussed in the text.
Based on a REA model, an accountant created an inventory table, a purchase inventory
table and a purchases/inventory table. Several field names that might appear in those
tables are listed below. Organize them into the appropriate tables based on the
principles of database normalization. Specify primary keys with underlines and foreign
keys with brackets. Some of the field names may be used in more than one table; others
may not be used at all.
"As of" date for beginning inventory
Beginning quantity on hand
Cost per unit of beginning inventory
Inventory description
Inventory item number
Number of units purchased
Price per unit purchased
Purchasing agent ID
Total cost of inventory on hand
Total cost of inventory purchases
Transaction date
Transaction number
Vendor ID
Taylor became aware of a serious ethical breach in her company related to a small
group of managers recording sales revenue inappropriately. She called a meeting of all
the managers in the company and told them to "confess or else." The managers,
particularly those who had not committed any ethical breach, became very angry and
the meeting ended in chaos.
Analyze Taylor's actions. Suggest a better approach for dealing with the ethics issue in
her company; ensure that your suggestions are clearly applied to Taylor's situation.
The chapter described five generic steps in a financial statement audit; it also discussed
six other types of audits you may encounter in your professional career. Consider the
operational audit. Based on its broad purpose and objectives, explain how you would
modify the five generic financial statement audit steps for the audit type you choose.
The systems development life cycle comprises seven steps: initiation/planning,
requirements analysis, design, build, test, implementation, and operations and
maintenance. In which phases of the SDLC would a systems flowchart be useful?
Justify your response.
Bumble Beasley was preparing a paper for his AIS course that explained the
connections between the definition of AIS and the generic elements of the AIS. He
created the pairings listed in the table below:
Complete the table by suggesting one item that exemplifies both the definition
component and the generic element. For example, "making journal entries" is both an
activity (in terms of the definition) and a process (in terms of the generic elements).
Which type of account is debited in each of the following adjusting entries? Which type
of account is credited?
