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As a requirement of his AIS course, Ahmed was preparing a short paper on why AIS is
an important area of study for future accountants. In terms of the UMUC information
literacy criteria, which of the following statements is most true?
A. Ahmed has sufficient authority to write the paper; he does not need to consult
outside sources.
B. To meet the accuracy criterion, he must discuss exactly three reasons.
C. By consulting at least five sources, Ahmed will be sure to meet the objectivity
criterion.
D. His paper may have sufficient coverage if he discusses at least three reasons.
Generally accepted auditing standards are divided into three groups. All of the
following are standards in the "general" group except:
A. Training
B. Independence
C. Professional care
D. Internal control
CGI Corporation had 10,000 shares of $2 par common stock outstanding; the shares
had been issued at $5 per share. At the end of March 2011, CGI declared a $3 cash
dividend per share when the market price of the stock was $8 per share. Which of the
following statements is most true?
A. The $3 cash dividend per share is determined by analyzing the difference between
the issuance price and the market value of the stock.
B. The $3 cash dividend per share is determined by analyzing the difference between
the issuance price and the par value of the stock.
C. CGI can process the dividend payment using only the information specified above.
D. None of these statements is true.
Which of the following link accounting information systems with auditing?
A. Business processes
B. Information technology skills
C. Both business processes and information technology skills
D. Neither business processes nor information technology skills
PRL Corporation's internal control plan is based on the COSO framework. It includes
five items: (i) conducting ongoing evaluations of internal control during the normal
course of operations, (ii) hiring accountants who understand the importance of strong
internal control, (iii) including a segment in new employee orientation on the
importance of strong internal control, (iv) periodic employee surveys that identify new
issues that require internal controls, (v) a quarterly newsletter explaining elements of
the internal control plan. Which of the following most appropriately groups two items
from PRL's plan with a component of the COSO framework?
A. I and II, monitoring
B. II and III, control environment
C. IV and V, information and communication
D. I and V, risk assessment
I focuses on monitoring. II and III help establish a strong control environment. IV is a
type of risk assessment. V is a form of information and communication.
Within the context of ERP systems, a module is:
A. a part of the program aligned with a specific function of the organization.
B. another name for a database table.
C. Both a part of the program aligned with a specific function of the organization and
another name for a database table.
D. Neither a part of the program aligned with a specific function of the organization nor
another name for a database table.
An accounting information system is defined by the text as a set of three interrelated
elements. Which of the following choices best gives an example of each element?
A. Buying inventory, selling inventory, balance sheet
B. Buying inventory, sales invoice, general ledger software
C. Selling inventory, sales invoice, balance sheet
D. Selling inventory, writing a check, general ledger software
The text described seven types of audits common in accounting practice. Which of the
following statements about them is most true?
A. An adverse report in a financial statement audit is evidence that an investigative
audit is needed.
B. Expectancy theory can be useful in many types of audits.
C. Both an adverse report in a financial statement audit is evidence that an investigative
audit is needed and expectancy theory can be useful in many types of audits are true.
D. Neither an adverse report in a financial statement audit is evidence that an
investigative audit is needed nor expectancy theory can be useful in many types of
audits is true.
Booksellers of Bufluffia is a small, independent bookstore that both publishes and sells
very specialized titles. They currently have about 50 clients; they publish and sell 30
different books at present. The company's management has asked you to create database
tables to support their operations. The database is likely to contain all of the following
tables except:
A. Clients
B. Sales
C. Inventory
D. Bookstore
XBRL allows organizations to focus effort on analysis, forecasting and decision
making. Which of the following includes one example of each of those tasks?
A. Interpreting financial statement ratios, preparing a sales budget, raising or lowering
prices
B. Preparing a sales budget, forecasting future risks using the COSO framework,
adopting new internal controls
C. Interpreting financial statement ratios, forecasting future risks using the COSO
framework, raising sales prices
D. Preparing a sales budget, lowering sales prices, creating a systems flowchart
Consider the table below as you answer the questions:
In the table, "us_gaap" would best be described as:
A. a taxonomy
B. a namespace
C. an instance document
D. an application of the FASB Conceptual Framework
The table is a replica of the one in the chapter's "AIS in the Business World."
Consider the following as you answer the question:
Jon is an information systems consultant with a diverse client base. Some of his clients
recently posed the questions listed below; Jon is considering which type of flowchart
would best be used to answer each question.
i. What happens to a federal tax return once it is received by the IRS?
ii. How should a company calculate payroll withholding taxes?
iii. What kind of computer network is in place at a local IRS office?
iv. What process does an organization employ to determine how to invest money in a
pension fund?
v. What steps must be completed to write and publish an accounting textbook?
Which of the preceding questions would best be answered by the type of flowchart
indicated below?
A. I and II, document flowchart
B. II and IV, systems flowchart
C. I and II, systems flowchart
D. II and IV, document flowchart
Consider the table below as you respond to the questions:
Based on the usual order of the seven-step process QRM is using, which of the
following should occur last?
A. Item A in the table
B. Item F in the table
C. Item C in the table
D. Item D in the table
CGI Corporation had 10,000 shares of $2 par common stock outstanding; the shares
had been issued at $5 per share. At the end of March 2011, CGI declared a $3 cash
dividend per share when the market price of the stock was $8 per share. After
processing the dividend transaction, the balance in CGI's common stock account will
be:
A. $20,000.
B. $30,000.
C. $50,000.
D. Some other amount.
In your own words, explain the fundamental principles of each of the following schools
of ethical thought: ethical egoism, utilitarianism, deontology, virtue ethics.
Analyze the REA model below. Identify and describe (in narrative form) the tables you
would create based on the model; do not describe the tables by listing the field names.
Consider the accounting-related tasks below:
Divide the tasks into two groups of equal size.
Create a systems flowchart of the following sales/collection process. ELM Corporation
sells durable medical equipment, such as wheelchairs and hospital beds; each
salesperson at ELM specializes in a specific type of medical equipment. When a
prospective client comes into their store, a greeter does a preliminary needs assessment
to determine what type(s) of equipment the client requires. Based on that preliminary
assessment, the greeter will match the client with a member of the sales staff. The staff
specialist does a more detailed needs assessment, the results of which go into a
computerized database along with the client's name, address, phone number and other
related information. After the needs assessment, the staff specialist determines the
client's budget, as well as whether the client has insurance coverage for the desired
equipment; clients without insurance coverage receive a 10% discount on all equipment
purchased up to $1,000, and a 20% discount for any sales over $1,000. The staff
specialist makes recommendations based on the client's needs and budget. If the client
chooses to purchase from ELM, the store fills out any necessary insurance paperwork
and collects the client's portion of the bill. For example, if an insured client purchases a
wheelchair with a price of $2,000 and the insurance covers 80%, ELM collects $400
from the client at the time of the sale. ELM accepts cash, checks and major credit cards
from clients. Insurance payments go directly to ELM and normally arrive within 60
days of the sale. If the client needs more than one type of durable medical equipment,
the first staff specialist introduces the client to a subsequent staff specialist, who repeats
the process until all the client's equipment needs are met.
Enterprise resource planning systems are a sophisticated form of relational database
technology; one common ERP system module is customer relationship management.
Create database specifications (table names and field names) for three tables you would
expect to find in an ERP system's customer relationship management module. At least
one of the tables must be a junction table. Indicate primary keys by underlining and
foreign keys with brackets; ensure that each table is in 3NF.
List and discuss two ways data flow diagrams are used in accounting information
systems work.
