MULTIPLE CHOICE: Highlight or Underline the best answer.

1. An accounting information system

A. produces information that is useful for decision makers.

B. only collects information.

C. is common referred to as an IAS.

D. A, B, and C are all correct.

2. Which of the following is a component of an accounting information system?

A. Source documents and input devices

B. Processing and storage

C. Outputs

D. A, B, and C are all correct.

3. The two basic components of a computerized accounting information system are

A. QuickBooks and entry-level software.

B. entry-level software and enterprise resource planning.

C. software and hardware.

D. cash basis and accrual basis.

4. A positive cost/benefit relationship implies

A. positive costs will be greater than positive benefits.

B. benefits received outweigh costs.

C. costs incurred outweigh benefits.

D. none of the above.

5. What is an accounting information system activity for selling merchandise inventory?

A. Request for purchase of goods or services

B. Approval of credit sales

C. Collection of time records

D. Processing of vendor invoices

6. Which of the following characteristics of an effective accounting information system refers to improving decision making and reducing uncertainty?

A. Relevance

B. Control

C. Inputs

D. Outputs

7. Consider the following special journals: the purchases journal and the sales journal. Which of these special journals include transactions that are posted to the accounts payable subsidiary ledger?

A. Purchases journal

B. Sales journal

C. Both purchases journal and sales journal

D. Neither purchases journal nor sales journal

8. Which type of transaction should be recorded in the cash receipts journal?

A. Accrual for interest on note payable

B. Accrual for depreciation

C. Payments to suppliers

D. Payments from customers

9. Which component of accounting information systems involves journalizing transactions?

A. Source documents and input devices

B. Processing and storage

C. Outputs

D. Enterprise resource planning

10.In computerized accounting information systems,

A. transactions are classified by type.

B. special journals are used.

C. systems are organized by function or task.

D. A, B, and C are correct.