Name:

__________________________________________
Section: _________________________
Subject: Accounting Information System
________________

December 19, 2015

2:00 P.M. 5:00 P.M.
Permit No.

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20.

The Management Reporting System provides the internal financial information needed to manage a business.
An example of a financial transaction is a suppliers price list.
Most of the inputs to the General Ledger System come from the Financial Reporting System.
Retrieval is the task of permanently removing obsolete or redundant records from the database.
In a flat-file system, files are easily shared by users.
When preparing discretionary reports, organizations can choose what information to report and how to present it.
A backbone system is completely finished, tested, and ready for implementation.
The internal auditor represents the interests of third-party outsiders.
Information Technology audits can be performed by both internal and external auditors.
Increased control is one of the key advantages of distributed data processing.
One of the greatest disadvantages of database systems is that all data is always available to all users.
Program flowcharts depict the type of media being used (paper, magnetic tape, or disks) and terminals.
The most significant characteristic of direct access files is access speed.
Real time processing is used for routine transactions in large numbers.
Batch processing of noncritical accounts improves operational efficiency.
Batch processing of accounts common to many concurrent transactions reduces operational efficiency.
Batch processing is best used when timely information is needed because this method processes data efficiently.
Batch processing systems can store data on direct access storage devices.
Program flowcharts are used to describe the logic represented in system flowcharts.
Document flowcharts are often used to depict processes that are handled in batches.

Multiple Choice:
D
1. Which of the following is not a business resource?
a. raw material
c. information
b. labor
d. all are business resources
C
2. Which level of management is responsible for controlling day-to-day operations?
a. top management
c. operations management
b. middle management
d. executive management
C
3. The value of information for users is determined by all of the following but
a. reliability
c. convenience
b. relevance
d. completeness
C
4. An example of a nonfinancial transaction is
a. sale of products
c. log of customer calls
b. cash disbursement
d. purchase of inventory
A
5. An example of a financial transaction is
a. the purchase of computer
c. a delivery schedule
b. a suppliers price list
d. an employee benefit brochure
B
6. The Transaction Processing System includes all of the following except
a. the revenue cycle
c. the expenditure cycle
b. the administrative cycle
d. the conversion cycle
A
7. The primary input to the Transaction Processing System is
a. a financial transaction
c. an accounting report
b. an accounting record
d. a nonfinancial transaction
C
8. When designing the data collection activity, which type of data should be avoided?
a. data that is relevant
c. data that is redundant
b. data that is efficient
d. data that is accurate
D
9. The most basic element of useful data in the database is
a. the record
c. the file
b. the key
d. the attribute
D
10. Effective information has all of the following characteristics except
a. relevance
c. summarization
b. completeness
d. structure
D
11. Which activity is not part of the finance function?
a. cash receipts
c. credit
b. portfolio management
d. general ledger
C
12. Market research and advertising are part of which business function?
a. materials management
c. marketing
b. finance
d. production
C
13. Data processing does not involve
a. data control
c. system maintenance
b. computer operations
d. data conversion
D
14. Which individual is least involved in new systems development?
a. system analyst
c. end user
b. external auditor
d. data librarian
D
15. Which individuals may be involved in the Systems Development Life Cycle?
a. accountants
c. end users
b. systems professionals
d. All of the above
B
16. Advantages of distributed data processing include each of the following except
a. cost reductions
c. improved operational efficiency
b. better management of organizations
d. increased user satisfaction
resources

17. Francis Company had operating expenses of 20,000 and depreciation expenses of 4,000. Assuming no other
transactions, what was the cash paid for operating expenses?
a. 24,000
c. 22,000
b. 16,000
d. 20,400
18. Southeast Jewelers Inc. sells only on credit. Its days sales outstanding is 73 days, and its average accounts
receivable balance is 500,000. What are its sales for the year? Assume a 365-day year.
a. 1,500,000
c. 2,000,000
b. 2,500,000
d. 2,750,000
19. Lewis Inc. has sales of 2 million per year, all of which are credit sales. Its days sales outstanding is 42 days. What
is its average accounts receivable balance? Assume a 365-day year.
a. 230,137
c. 333,333
b. 266,667
d. 350,000
20. A fire has destroyed many of the financial records at Anderson Associates. You are assigned to piece together
information to prepare a financial report. You have found that the firms return on equity is 12 percent and its debt ratio
is 0.40. What is its return on assets?
a. 4.90%
c. 6.60%
b. 5.35%
d. 7.20%
21. Refer to No. 20. What is the firms debt ratio if its ROE is 15 percent and its ROA is 10 percent?
a. 67%
c. 25%
b. 50%
d. 33%
22. Info Technics Inc. has an equity multiplier of 2.75. The companys assets are financed with some combination of longterm debt and common equity. What is the companys debt ratio?
a. 25.00%
c. 52.48%
b. 36.36%
d. 63.64%
23. Refer to No. 22. What is the companys common equity ratio?
a. 25.00%
c. 63.64%
b. 36.36%
d. 75.00%
24. A firm has total interest charges of 20,000 per year, sales of $2 million, a tax rate of 40 percent, and a profit margin of
6 percent. What is the firms times-interest-earned ratio?
a. 10
c. 12
b. 11
d. 13
25. Refer to No. 24. What is the firms times-interest-earned ratio, if its profit margin decreases to 3% and its interest
charges double to 40,000 per year?
a. 3.0
c. 2.5
b. 3.5
d. 4.2
26. The breakeven point is obtained at intersection of
a. Total revenue and Total cost line
c. Total cost and variable cost line
b. Variable cost and fixed cost line
d. Fixed cost and total cost line
27. An industry is selling a product for 10 per unit. The fixed cost for assets is 40,000 with variable cost of 6 per unit.
How many units should be produced to break even?
a.
8,000
c. 10,000
b. 12,000
d. 14,000
28. The following assumptions are made in case of break-even analysis, except
a. All fixed costs are fixed
c. All variable costs are fixed
b. The prices of input factors are constant
d. Volume of production and volumes of sales are equal
29. The contribution margin ratio always increases when the
a. break-even point increases
c. variable costs as a percentage of net sales increase
b. break-even point decreases
d. variable costs as a percentage of net sales increase
30. To compute the break-even point in units, which of the following formulas is used?
a. FC/CM per unit
c. CM/CM ratio
b. FC/CM ratio
d. (FC+VC)/CM ratio