Accounting Information System
Mock Exam 1
(Bold & Yellow highlight options are the Solutions)
Multiple Choice Questions (1 point each)
1. An accounting information system (AIS) processes __________ to provide users with _________.
a) data; information
b) data; transactions
c) information; data
d) data; benefits
2. Information that reduces uncertainty, improves decision makers' ability to make predictions, or confirms or corrects their prior expectations, is said to be
a) Complete
b) Relevant
c) Reliable
d) All of the Above
3. A group of fishermen catch fish from the Gulf of Arabia and they sell them to a company called Horizon W.L.L. for a nominal price. Horizon refrigerate the fish and supply them to whole sellers in Doha for a 10% markup. The whole sellers supply the fish to restaurants and retail outlets around Doha for an additional 15% markup. The inbound logistic of the whole sellers is the outbound logistic of
a) The fishermen
b) Horizon W.L.L.
c) The restaurants
d) Both the restaurants and the retail outlets
4. Groups of related business activities such as the acquisition of merchandise and payment of vendors are called
a) transaction cycles.
b) economic cycles.
c) business events.
d) transactions.
5. The basic "give and take" functions of a business have been grouped into transaction cycles. The cycle that includes the events of hiring employees and paying them is known as the
a) revenue cycle.
b) expenditure cycle.
c) human resources cycle.
d) financing cycle.
6. What is the major difference between the revenue and the expenditure cycle?
a) The revenue cycle includes marketing activities; the expenditure cycle does not.
b) In the revenue cycle, cash is received; in the expenditure cycle cash is paid out.
c) The expenditure cycle includes paying employees.
d) The revenue cycle includes the activity of obtaining funds from investors.
7. Hamid is responsible for printing reports for the department managers as they need reports for their staff meeting. The reports are prepared by the accountants. In which step of the data processing cycle is Hamid involved?
a) Input
b) Output
c) Storage
d) Processing
8. Many modern accounting software packages offer separate transaction cycle modules. What is the reason for this?
a) Every organization does not need to implement all of the available transaction cycle modules.
b) Most businesses do not need the revenue cycle module as part of their AIS.
c) The nature of a given transaction cycle is the same irrespective of the type of organization.
d) A properly designed AIS does not use the concept of separate business transaction cycles to process transactions.
9. The operations performed on data to generate meaningful and relevant information are referred to as
a) general ledger and reporting system
b) accounting information system
c) financial reporting
d) data processing cycle
10. Hamid is responsible for printing reports for the department managers as they need reports for their staff meeting. The reports are prepared by the accountants. In which step of the data processing cycle is Hamid involved?
a) Input
b) Output
c) Storage
d) Processing
11. Many modern accounting software packages offer separate transaction cycle modules. What is the reason for this?
a) Every organization does not need to implement all of the available transaction cycle modules.
b) Most businesses do not need the revenue cycle module as part of their AIS.
c) The nature of a given transaction cycle is the same irrespective of the type of organization.
d) A properly designed AIS does not use the concept of separate business transaction cycles to process transactions.
12. The operations performed on data to generate meaningful and relevant information are referred to as
a) general ledger and reporting system
b) accounting information system
c) financial reporting
d) data processing cycle
13. The storage of data on a DFD is shown by
a) circles.
b) arrows.
c) squares.
d) two horizontal lines.
14. Jafar Hussain is a junior accountant at Hussain and Associates. His father Nabeel Hussain, who is a partner at the firm, asked Jafar to type using 500 words a description of the internal control of a small company they are auditing. What Jafar is going to prepare is called a
a) An internal control document flow-chart
b) An internal control system flow-chart
c) An internal control data-flow diagram
d) None of the above
15. Which one of the following has the least details?
a) Level 0 Diagram
b) Level 1 Diagram
c) Level 2 Diagram
d) Context Diagram
16. Flowcharts are created using a standard set of symbols. These symbols can be divided into four basic categories. A square denotes an auxiliary operation and is found in which flowchart symbol category?
a) input/output
b) processing
c) storage
d) flow and maintenance
17. SOX (2002) effectively requires that ____________________ and their ____________ document and test the company’s internal controls
a) publicly-traded corporations, auditors
b) auditors, supervisors
c) privately-held corporations, auditors
d) accountants, employers
18. What does the following symbol represent?
a) Magnetic disk
b) Magnetic tape
c) A conversation between two accountants
d) Manual processing
Short Answer Questions (2 points each)
19. Ali Sallabi works in the accounting department of Cold Breeze Air Conditioning. His job includes updating accounts payable based on purchase reports and payments made by the firm. Which business cycle does Ali work in? What kind of documents does he use to do his job? Which part(s) of the data processing cycle is he involved in?
20. What is the difference between an entity and an attribute? Describe with examples.
Essay Question (5 points)
21. Write in your own words what the following flowchart represent
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