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In accounting, ethics issues can arise in:
A. Revenue recognition.
B. Earnings smoothing.
C. Both revenue recognition and earnings smoothing.
D. Neither revenue recognition nor earnings smoothing.
Consider the following short case as you respond to the question:
Scott and Logan are the CEO and CFO of MLN Corporation. The firm has lately been
losing customers to MLN's competitors; Scott and Logan believe an ERP system could
help MLN obtain more timely information that will enable them to retain old customers
and acquire new ones. They formed a six-person team with representatives from three
of MLN's ten departments and instructed them to use the steps in the systems
development life cycle to choose and implement an ERP system. A year later, the team
had completed its work and implemented the system by transferring data from MLN's
general ledger software to the ERP system.
Umble and Umble suggested six necessary conditions for a successful ERP
implementation. Which of the following pieces of advice is most applicable to MLN?
A. Form a smaller implementation team.
B. Ensure that the implementation team has wider representation.
C. Both form a smaller implementation team and ensure that the implementation team
has wider representation.
D. Neither form a smaller implementation team nor ensure that the implementation
team has wider representation.
Consider the following independent situations as you answer the questions:
a. Irene, a freshman accounting major, thought she would benefit from reading an
intermediate accounting text while taking introductory financial accounting.
b. Bradley developed a plan to study for all four parts of the CPA exam during his last
semester at college, thus making himself ready to take the exam immediately after
graduation.
c. Jorge met weekly with a group of five students, all of whom were preparing their
resume for the very first time.
d. Every time Maria encountered a topic she did not understand in her accounting
information systems course, she did a Google search for it.
Jorge and his group would benefit from which of the following countermeasures for
information overload?A. Focus on creating value-added information.B. Compress,
aggregate, categorize and structure information.C. Both focus on creating value-added
information and compress, aggregate, categorize and structure information.D. Neither
focus on creating value-added information nor compress, aggregate, categorize and
structure information.
COSO published two integrated frameworks to assist organizations in managing risk
and developing internal controls. Organizations adopting XBRL could use:
A. The risk management framework only.
B. The internal control framework only.
C. Both the risk management and internal control frameworks.
D. Neither the risk management nor the internal control framework.
XBRL's structure is flexible, so companies can extend it when the need arises. Which of
the following terms is most likely to require an extension of an existing XBRL
taxonomy?
A. Asset
B. Operating cash flow
C. Both Asset and Operating cash flow will likely require an extension of an existing
taxonomy.
D. Neither Asset nor Operating cash flow will likely require an extension of an existing
taxonomy.
Which of the following is most closely related to one of the benefits of e-business
discussed in the text?
A. Internal controls
B. Company finances
C. Selling to a broader range of customers
D. All of these are related to benefits of e-business.
With respect to XBRL, Global Ledger and International Financial Reporting Standards
are:
A. Specifications.
B. Taxonomies.
C. Namespaces.
D. Instance documents.
The components of an accounting information system are designed to collect ___ and
report ___.
A. Data; information
B. Data; data
C. Information; information
D. Information; data
Which of the following generic steps in a financial statement audit should occur last?
A. Issue the audit report.
B. Perform compliance testing.
C. Review the internal control system.
D. Evaluate management's credentials.
As a tool for understanding human behavior, expectancy theory can be useful in:
A. Accounting information systems.
B. Auditing.
C. Both accounting information systems and auditing.
D. Neither accounting information systems nor auditing.
Which of the following statements about XBRL is most true?
A. Because it is extensible, companies can create new specifications that reside in an
Internet namespace.
B. Because it is organized in taxonomies, it is extensible.
C. Because it is extensible, companies can create tags that are used in instance
documents, as long as they are defined in a namespace.
D. All of these statements are true.
Please refer to the data flow diagram below in answering the question:
In the next level of data flow diagrams, Process 3.1 is most likely to be labeled:
A. Record adjusting entries.
B. Prepare financial statements.
C. Close nominal accounts.
D. Complete first step of year-end work.
Linda consulted the AICPA Code of Professional Conduct for an ethics issue she had
recently discovered. Based on the Langenderfer and Rockness model, what should she
do next?
A. Prepare a presentation of the code for the company.
B. Determine her options for how to respond.
C. Talk with a trusted co-worker.
D. Decide how to respond to the ethics issue.
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.
On April 1 of the current year, EPL Corporation accepted a three-page written proposal
from HSO to design and build 10 customized golf carts for EPL's internal use. The total
price for the order was $3400. Considering the accounts involved in the transaction
from EPL's perspective, which of the following correctly pairs an account on the
balance sheet with the appropriate section of the balance sheet?
A. inventory, current assets
B. equipment, plant assets
C. Both inventory, current assets and equipment, plant assets
D. Neither inventory, current assets nor equipment, plant assets
Based on the principles of normalization, an inventory table would include all of the
following fields except:
A. Transaction number
B. Item code
C. Description
D. Beginning quantity on hand
Accounting information systems have five generic elements. Which one applies to each
item listed below within the context of the sales/collection process? a. Customer check,
from the point of view of the seller b. Customer order c. Employee master file d.
Invoice e. Maintaining adequate inventory f. Record transactions in the AIS g.
Remittance advice, from the point of view of the seller h. Sales/inventory junction table
i. Use of the seven steps j. Using information technology to fill orders
Consider the following illustration as you respond to the questions:
A relational database of the process depicted would include all of the following tables
except:
A. applicant
B. perform initial screening
C. applicant/rejection letter
D. interview applicant
