Accounting Information Systems, 8e—Test Bank, Chapter 8
SHORT ANSWER
1. List, in order, the steps in the Financial Accounting Process.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
2. List two duties that the general ledger clerk should not perform.
3. Explain the purpose and contents of the general ledger master file.
4. What is XML?
5. Why do many firms no longer use a general journal? What has taken its place?
6. What are the major exposures in the general ledger/financial reporting system?
7. Why is the audit trail necessary?
8. The _______________________________ principle suggests that management should
structure the firm around the work it performs rather than around individuals with unique
skills.
9. Employees who are responsible for a task must have the __________________________ to
make decisions within the limits of the responsibility delegated.
10. __________________________ refers to the number of subordinates directly under a
manager’s control.
11. The difference between the actual performance and the standard is called the
__________________________.
12. How does the Management by Exception principle affect the Management Reporting System?
13. For reports to be useful they must have information content. Describe a reporting objective
which gives reports information content.
14. What is information overload? How does it affect decision-making?
15. Explain the phrase “span of control.” What are the implications for the management reporting
system of this principle?
16. Explain the three types of responsibility centers.
17. Describe at least three characteristics of strategic planning decisions and their information
requirements.
18. What three elements must be present for a problem to be “structured?”
19. How does management by exception help to alleviate information overload by a manager?
20. What is a data warehouse?
21. What is XBRL?
22. What is the XBRL Taxonomy?
ESSAY
1. List and explain the six basic files in the general ledger database.
2. Describe the three elements of problem structure. Contrast a structured problem to an
unstructured problem. Describe which levels of management typically deal with structured
problems and with unstructured problems.
3. Many financial reports produced by organizations are nondiscretionary–publicly traded firms
have no choice but to prepare income statements, tax returns, etc. Applications that are part of
the management reporting system are discretionary–they are optional. How does this
characteristic affect the system?
4. There are two basic types of management reports–programmed and ad hoc. Describe each and
give examples.
5. Describe at least three attributes of an effective report.
Accounting Information Systems, 8e—Test Bank, Chapter 8
6. What is the implication for the Management Reporting System of an organization that
implements the formalization of tasks principle?
7. Discuss three audit implications of XBRL
8. Discuss the primary advantage of XBRL over traditional HTML as a means of on-line
reporting of financial information to users.
9. Contrast the four decision types, strategic planning, tactical planning, management control
and operational control, by the four decision characteristics, time frame, scope, level of
details, recurrence, and certainty.
10. Describe the role of the journal voucher in both batch and real-time GL systems.
