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Raul was leading a team charged with developing a new system for budgeting. He
created Excel templates for the new budgeting process and presented them to the team
during its first meeting. Which of the following statements is most true?
A. Raul cannot use the systems development life cycle in this situation.
B. If Raul wants to use the systems development life cycle, he should not have created
Excel templates so soon.
C. The systems development life cycle precludes the use of Excel, since all software
must be created "from scratch."
D. Both if Raul wants to use the systems development life cycle, he should not have
created Excel templates so soon and the systems development life cycle precludes the
use of Excel, since all software must be created "from scratch are true.
At the end of 2014, CNC Corporation's accounting information system produced the
following trial balance:
CNC completed the following transactions in January 2015:
a. Purchased inventory on account, $300.
b. Collected cash from customers for prior year sales, $500.
c. Paid current month's wages, $900.
d. Had land appraised. Cost of doing the appraisal (paid in cash), $700. Appraised value
of land, $3,000.
e. Sold inventory with a cost basis of $200 on account, $800.
f. Declared dividends, $50.
g. Hired additional sales staff. Expected monthly salaries, $80.
h. Purchased supplies for cash, $150.
i. Paid creditors for previous purchases, $150.
j. Signed a contract for annual employee retreat, $450.
CNC uses block coding for its chart of accounts. Which of the following includes
accounts that should all have the same first digit?A. Accounts receivable, accounts
payable, retained earnings
B. Supplies, land, equipment
C. Common stock, additional paid-in capital, retained earnings
D. Bonds payable, discount on bonds payable, cash
Consider the table below as you answer the questions:
The XBRL tags in the table would be included in ___ called ___.
A. a taxonomy; an income statement
B. a taxonomy; a namespace
C. an instance document; an income statement
D. an instance document; a namespace
The table is a replica of the one in the chapter's "AIS in the Business World."
Consider the table below as you respond to the questions:
Which of the following is the best choice for Item G in the table?
A. Based on feedback from employee interviews, plan the organization and appearance
of each module.
B. State law mandates annual safety training for all employees.
C. Review the relevant law to determine its specifications.
D. Plan whether to develop or purchase the system.
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. If EPL pays the final invoice within 15 days, the check
will be for:
A. $1700.00
B. $850.00
C. $824.50
D. some other amount
Depreciation is the periodic allocation of an asset's cost to the periods which benefit
from the asset's use. That statement is an example of:
A. Technical knowledge.
B. A specialized knowledge base.
C. Both technical knowledge and a specialized knowledge base.
D. Neither technical knowledge nor a specialized knowledge base.
Put the following statements in the correct order based on the steps in the accounting
cycle.
a. Assemble AIS outputs.
b. Debit cash and credit sales.
c. Determine the correct way to enter a transaction in the AIS.
d. Examine a bank statement to determine the amount of a bank service charge.
e. Make entries that account for timing differences between cash flows and accrual
basis revenue and expense.
f. Prepare the AIS for a new fiscal year.
g. Reorganize AIS information from chronological to account-based.
h. Verify, for the first time, the equality of debits and credits in the ledger.
i. Verify, for the second time, the equality of debits and credits in the ledger.
j. Verify, for the third time, the equality of debits and credits in the ledger.
Laurie and Milton were developing a business process management plan for their
organization. Which of the following actions should they take first, based on the
generalized model of BPM discussed in the text?
A. Ask co-workers how the purchasing process can be optimized.
B. Choose an activity to study.
C. Determine what data their organization has available.
D. Get a budget from management for developing the BPM plan.
Consider the following short case as you respond to the question:
Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of
whom are already licensed CPAs and some of whom are still working toward licensure.
She is responsible for audits of independent bookstores in California, Nevada and
Arizona. Amanda is concerned that the less experienced professionals she supervises
are repeating the mistakes she and the more experienced professionals on her team
made when they began auditing. She therefore wants to create a knowledge
management system.
Amanda's staff may be committing relapse errors due to information overload. Which
of the following best pairs a cause of information overload with an appropriate
countermeasure?
A. Auditors regularly work ten to twelve hours per day; they need to allow more time to
complete important tasks.
B. Auditors work in teams of two; they need to formalize the language used to describe
information.
C. Auditors regularly work ten to twelve hours per day; they need to engage in more
satisficing.
D. Auditors work in teams of two; they need to engage in more satisficing.
Human judgment is important in which of the following AIS tasks: (i) designing source
documents, (ii) recognizing recordable transactions.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
An information systems development company routinely creates a password that they
do not disclose to their clients. In that way, the development company can bypass any
security the client adds on later if the system needs maintenance. The client's
information system is therefore at greatest risk for:
A. Error
B. Intrusion
C. Web site defacement
D. Extortion
Examples of Step 1 in Steps for Better Thinking include:
A. Recognizing the need to create an enterprise risk management plan.
B. Learning about the eXtensible Business Reporting Language.
C. Both recognizing the need to create an enterprise risk management plan and learning
about the eXtensible Business Reporting Language.
D. Neither recognizing the need to create an enterprise risk management plan nor
learning about the eXtensible Business Reporting Language.
Learning about XBRL is an example of "knowing."
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.
The bookstore may need to complete the last step of the sales/collection process
because:
A. It took Allison's order online.
B. It uses the open invoice method of processing receivables.
C. It does not outsource credit approval to a third party.
D. It has inadequate separation of duties.
Consider the following illustration as you respond to the questions:
Suppose a decision maker wanted to determine how many applicants submitted their
materials within a specified one-week time frame. Which database objects would the
decision maker use?
A. a table and a query
B. a query and a process
C. a data flow and a table
D. some other combination
In a paper on the role and purpose of the sales/collection process, Bumble Beasley
wrote: "The sales/collection process is exclusively concerned with selling products on
credit and collecting cash from clients." Which of the following should be deleted from
his statement?
A. Exclusively
B. Selling products on credit
C. Collecting cash
D. From clients
