Information Technology for Accountants Exam Practice Tests
Course Introduction
This course explores the critical role of information technology in modern accounting practices, focusing on the tools, systems, and methods used to process, manage, and analyze financial data. Students will learn about accounting information systems (AIS), database management, and the application of software such as spreadsheets, enterprise resource planning (ERP) systems, and cloud-based accounting platforms. Emphasis is placed on internal controls, data security, and the ethical considerations of handling electronic financial information. By integrating IT with accounting principles, students prepare to enhance financial decision-making, improve efficiency, and ensure compliance in a technology-driven business environment.
Recommended Textbook
Accounting Information Systems A Practitioner Emphasis 7th Edition by Cynthia D. Heagy
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15 Chapters
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Page 2
Chapter 1: Significance of Accounting Information Systems
and the Accountants Role
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46 Verified Questions
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Sample Questions
Q1) Contemporary accounting information systems include data that could not be economically collected before the current level of computerization.
A)True
B)False
Answer: True
Q2) What are four possible categories for accounting software if based on the size of company it services?
Answer: Four possible categories are low end market, middle market, beginning ERP market, and tier 1 market.
Q3) Which of the following organizations can audit a company to determine whether the company has the correct number of licenses for the number of users?
A) Accenture Consultants
B) Business Program Accreditation Association
C) Business Software Alliance
D) All of these
Answer: C
Q4) What are the major components of a computerized accounting system?
Answer: Hardware, software, and people
Page 3
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Chapter 2: Accounting Systems Documentation
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Sample Questions
Q1) Which of the following statements about data flow diagrams is correct?
A) They can only be understood when used in conjunction with block diagrams.
B) They show what an accounting system is doing and how the system is doing it.
C) They are also called functional information diagrams.
D) They provide a more detailed representation of an accounting information system than do block diagrams.
Answer: D
Q2) How should distribution of or access to documentation be handled?
A) Through multiple channels
B) Saved so that is can be a basis of comparison for future documentation development
C) On a need-to-know basis
D) None of the above
Answer: C
Q3) Because of the limited amount of detail, block diagrams are generally used in conjunction with other documentation that shows complementary aspects of an accounting system.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Essential Elements and Basic Activities of Accounting Systems
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Sample Questions
Q1) Four types of files in a computerized accounting system are scratch files, backup files, application files, and archive files.
A)True
B)False
Answer: False
Q2) As with general journals in a paper-based accounting system, the main purpose of subsidiary master files in a computerized system is to store detailed information about general control accounts.
A)True
B)False
Answer: False
Q3) Which of the following defines a shipping transaction file in a computerized system?
A) A file that stores data about sales requiring more than one shipment
B) A file that stores data about purchases
C) A file that stores data about purchases requiring the receipt of more than one shipment
D) A file that stores data about sales
Answer: A
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Chapter 4: Data Flows, Activities, and Structure of Accounting Systems
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Sample Questions
Q1) Any organization that provides goods or services on demand requires a sales subsystem.
A)True
B)False
Q2) What are the two major types of reports that are produced by an accounting information system?
Q3) Which of the following is (are) true regarding transactions?
A) May be reported individually
B) May be reported as part of aggregate information
C) May be reported to external auditors only
D) A & B
E) B & C D
Q4) Which of the following is not a type of processing function?
A) Retrieving
B) Sorting
C) Comparison
D) Summarization
Q5) List three of the four processes covered by an accounting information system. Choose one of those processes, and list two examples of subsystems (modules) that might be included in that process.
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Chapter 5: Reporting Process, Coding Methods, and Audit Trails
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Sample Questions
Q1) Concise reports contain only physical measures.
A)True
B)False
Q2) Generally, the less frequently accounting data are reported, the better.
A)True
B)False
Q3) Effective exception reporting requires the ability to select records based on the similarities between an account's current balance and its prior year's balance.
A)True
B)False
Q4) Describe in what situations the frequency of reporting should be weekly or even daily.
Q5) Which of the following would not be suitable as a reference identifier in an audit trail?
A) Customer invoice
B) Document number of checks issued
C) Purchase order number
D) Internally generated numbers that represent completed transaction
Q6) What are the reporting principles discussed in this chapter?
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Chapter 6: Internal Control and Risk Assessment
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Sample Questions
Q1) The effectiveness of the board of directors in contributing to internal control is best enhanced by which of the following?
A) Its independence
B) Its superiority to management
C) Its stockholder representation
D) Its legal power to govern the corporation
Q2) Which of the following are required by the Sarbanes-Oxley Act of 2002?
A) Rotation of a company's external auditing firms every five years.
B) Limited loans under special circumstances to executive management.
C) Attestation as to the contents of the financial statements by the CEO and CFO.
D) All of the above.
Q3) Public interest in internal control is not as high now as it was twenty years ago.
A)True
B)False
Q4) One of the basic factors of the internal environment is the board of directors or audit committee.
A)True
B)False
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8
Chapter 7: Control Activities
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Sample Questions
Q1) What is the most common computer-related problem confronting organizations?
A) Hardware malfunction
B) Input errors
C) Disruption to the processing activities as a result of natural disasters
D) Fraud
Q2) Of the following control activities, which is the most effective?
A) Bonding of employees
B) Segregation of duties
C) Rotation of assignments
D) Enforced vacations
Q3) What is the advantage of having a "hot site" as a back-up control?
A) Power and space are available at the site to set up processing equipment on short notice (e.g., after a disaster)..
B) The site is located in another branch of the company in a neighboring county.
C) The system is configured in a manner similar to the normal day-to-day processing and is available for immediate use.
D) All of the above are advantages of having a hot site.
Q4) A disaster recovery plan is an application control.
A)True
B)False
Page 9
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Chapter 8: The Financial Process
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Sample Questions
Q1) When an account is designated as an "inactive account," which of the following is true of its status?
A) The accounting information system will prevent further entries from being made to the account.
B) The account is immediately deleted from the general ledger.
C) Entries may still be made to the account.
D) The account remains active until the accounting period is closed and is deleted after the accounting period is closed.
Q2) The internal audit department chooses the external auditor.
A)True
B)False
Q3) Which of the following is part of the financial process because it is an event that does not fall within the revenue, purchasing, or inventory processes?
A) Cost accounting
B) Payment of stock dividends
C) Accounts receivable
D) Cash receipts
Q4) What types of business processes are first reflected in the general ledger module?
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Chapter 9: The Revenue Process
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Sample Questions
Q1) What is the location at which title to goods changes from the shipping organization to the customer known as?
A) Picking list
B) Cash and carry
C) Standing orders
D) FOB point
Q2) Which of the following is included in the revenue process?
A) Contra accounts
B) Sales order processing
C) Vendor invoicing
D) Inventory management
Q3) What are the principal events to be recorded in the revenue process?
A) Sales orders in the sales order module
B) Shipping order
C) Billing of the customer
D) Receipt of cash from customers
E) All of the above are principal events to be recorded in the revenue process.
Q4) Why is preparing an aging schedule for balance forward accounts more difficult than for open item accounts?
Q5) Give two examples of data verification controls found in the revenue process.
Page 11
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Chapter 10: The Purchasing Process
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Sample Questions
Q1) After an organization compares the vendor invoice with the purchase order data and the receiving data, the invoice data are then keyed into which file?
A) Open purchase order file.
B) Open vendor invoice file.
C) Open accounts transaction file.
D) Open customer invoice file.
Q2) Identify and describe the two data entry points for the purchasing process that attention must be focused on.
Q3) What are the two major data entry processes?
A) Creation and issuance of purchase orders; recording of cash disbursements
B) Creation and issuance of purchase orders; recording of merchandise received and services rendered
C) Recording of merchandise received and services rendered; recording of cash disbursements
D) Creation and issuance of purchase orders; recording of accounts payable
Q4) What are the advantages of EDI over paper purchase orders?
Q5) Describe output controls typically found in the purchasing process.
Q6) Define electronic data interchange (EDI). List 3 of the advantages of implementing an EDI system.
Page 12
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Chapter 11: The Inventory Process
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Sample Questions
Q1) The larger the quantity of safety stock, the larger the stockout cost.
A)True
B)False
Q2) Which of the following does not represent an effective segregation of duties in the inventory process?
A) Responsibility for reviewing inventory evaluations and approving changes to inventory valuations (e.g., write-downs or write-offs) should be separated from the maintenance of perpetual inventory records
B) Responsibility for reviewing inventory evaluations and approving changes to inventory valuations (e.g., write-downs or write-offs) should be separated from the maintenance of perpetual inventory records.
C) The functions of custody of inventory and the responsibility for the maintenance of the inventory master file records should be separated.
D) The clerks who handle maintenance of perpetual inventory records should also handle recording the receipt of shipments from vendors.
Q3) The reorder point is reached when the stock on hand equals the safety stock.
A)True
B)False
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Chapter 12: Database Structure of Accounting Systems
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Sample Questions
Q1) Which level of the database architecture relates to the way all the data in the entire database are logically viewed?
A) Physical level
B) Conceptual level
C) Internal level
D) External level
Q2) Which of the following statements is not an advantage of a database?
A) Data storage and retrieval methods are designed by application developers.
B) Data elements can be combined in virtually limitless ways.
C) Each data element needs to be stored only one time.
D) Application programs are independent of the physical structure of the data they process.
Q3) Identify the types of relationships that can exist between tables in a database.
Q4) What type of relationship do a customer table and an inventory table have?
A) One to one
B) One-to-many
C) Many-to-many
D) B and C, but not A
Q5) What does a database schema define?
Q6) Define the two database models discussed in the chapter.
Page 14
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Chapter 13: Developing a Relational Database for an Accounting Information System
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Sample Questions
Q1) What is the step that will normalize data with respect to the first normal form?
Q2) What is a resource in the sale event in the REA framework?
A) Purchase order
B) Inventory
C) Employee
D) Customer
Q3) For an accounting system to be successful, only the system's developers and the organization's accountants must actively participate in developing the database for the accounting system.
A)True
B)False
Q4) Which of the following data elements are not included in a sales invoice?
A) Invoice number, invoice date, customer code, customer name
B) Sales representative name, sales representative commission, sales representative discount
C) Product number, quantity sold, product description, unit sales price
D) Extended amount, total due, customer address
Q5) Briefly summarize the steps performed in developing a database system for an accounting system using the system output approach.
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Chapter 14: Electronic Business
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Sample Questions
Q1) Electronic business is any transaction (such as a purchase or a sale) completed over a computer network that involves the transfer of ownership or rights to use goods or services.
A)True
B)False
Q2) DataGlyphs are created using
A) Ones and zeros
B) Plus and minus signs
C) Slashes and backslashes
D) Bars
Q3) The "quiet zone" is the white spaces between bar codes.
A)True
B)False
Q4) Which of the following technologies acts as a go-between between a company employee and the Internet?
A) Digital signature
B) Proxy server
C) Web assurance service
D) Encryption
Q5) List the three types of e-business and give one example of each.
Page 16
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Chapter 15: Ais Selection and Implementation
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Sample Questions
Q1) Because the failure of an AIS may mean bankruptcy for an organization, what is the most stressful method of conversion to an AIS?
A) Direct conversion
B) Modular conversion
C) Parallel conversion
D) Pilot conversion
Q2) List the tasks required in a systems acquisition project.
Q3) Merchantability refers to the ability of a product to perform some function.
A)True
B)False
Q4) Most AIS developers permit no changes to programs, while the next largest group permits only limited changes.
A)True
B)False
Q5) Newer AIS software products will have a greater number of "bugs" than older products.
A)True
B)False
Q6) Distinguish between AIS installation and AIS implementation.
Page 17
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