INSTRUCTIONS: Present your answers in a hand-written form.

Take a picture of your answers

through the CamScanner (CS) application and convert it in PDF file. Once converted, upload this
to our google classroom and mark as done. Limit your answers to 2-5 sentences per question.
I. Multiple-Choice Questions

1. Which of the following is NOT a purpose of the transaction processing system?

a) Managing and reporting on the status of financial investments
b) Converting economic events into financial transactions
c) Distributing essential information to operations personnel to support their daily
operations
d) Recording financial transactions in the accounting records

2. Which of the following are objectives of the data collection activity within the general
model for AIS?
a) Relevant and redundant
b) Efficient and relevant
c) Efficient and redundant
d) Efficient and objective

3. Which of the following is NOT a database management task?

a) Retrieval
b) Storage
c) Summarization
d) Deletion

4. Which of the following is NOT a financial transaction?

a) update valid vendor file
b) Purchase of products
c) Cash receipts
d) Sale of inventory

5. The following are subsystems of the accounting information system, EXCEPT the

a) transaction processing system

b) general ledger/financial reporting system
c) human resources system
d) management reporting system

6. Which of the following is NOT a characteristic of effective information?

a) Relevance
b) Precision
c) Accuracy
d) Summarization

7. When viewed from the highest to most elemental level, the data hierarchy is
a) file, record, attribute.
 b) attribute, record, file.
c) record, attribute, key.
d) table, record, key.
e) key, record, table.

8. Which of the following is least likely to be used as evidence by an external auditor?

a) Substantive tests results
b) Work performed by internal auditors who organizationally report to the controller
c) Tests of controls results
d) Work performed by internal auditors who report to the audit committee of the
BOD

9. Which of the following is NOT an objective of all information systems?

a) Support for the stewardship function of management
b) Support for management decision making
c) Support for the day-to-day operations of the firm
d) All of the above are objectives

10. Which of the following best describes the activities of the materials management
function?
a) Purchasing, receiving, and inventory control
b) Purchasing, receiving, and storage
c) Receiving, sales, distribution, and purchasing
d) Receiving, storage, purchasing, and accounts payable
e) Purchasing, storage, and distribution

11. Which of the following best describes the activities of the production function?
a) Maintenance, inventory control, and production planning
b) Quality control, production planning, manufacturing, and payroll
c) Maintenance, production planning, storage, and quality control
d) Production planning, quality control, manufacturing, and maintenance
e) Manufacturing, quality control, and maintenance

12. Which of the following best describes the activities of the accounting function?
a) Inventory control, cash receipts, accounts payable, cash disbursements, and
payroll
b) Fixed assets, accounts payable, cash disbursements, and cost accounting
c) Purchasing, cash receipts, accounts payable, cash disbursements, and payroll
d) Inventory control, accounts payable, fixed assets, and payroll Inventory control,
cost accounting, accounts payable, cash disbursements, and payroll

13. Which statement best describes cloud computing?

a) Cloud computing involves long-term contracts.
b) Cloud computing is location-independent computing.
c) Cloud computing involves an organization selling its IT resources to a vendor and
leasing back IT services from the vendor.
 d) Cloud computing involves fixed price contracts.
e) Cloud computing involves entering into multiple contracts with several IP service
providers to create a cloud of resources.
14. Which of the following statements is most accurate?
a) ERP systems are commercial software packages that are sometimes called turnkey
systems because they can be implemented by the user with little or no
modification.
b) Substantive tests provide evidence focused on the system controls.
c) Public accounting firms that provide attest services are not allowed under SOX to
offer IT advisory services.
d) Both small and large firms that have standardized information needs are potential
customers for commercial software.
e) External auditors may rely on the work of internal auditors only if they report to
the controller or the CEO of the client company.

II. PROBLEMS
USERS OF INFORMATION

Classify the following users of information as either:

I—internal user
T—external user: trading partner
S—external user: stakeholder

a) Internal Revenue Service

b) Inventory control manager
c) Board of directors
d) Customers
e) Lending institutions
f) Securities and Exchange Commission
g) Stockholders
h) Chief executive officer
i) Suppliers
j) Bondholders
.Use of information Classify the following users of information as either:I- internal user T-
external user: trading partner S- external user: stakeholder
a. Internal Revenue Service (I)
b. Inventory control manager (I)
c. Board of directors (I)
d. Customers(T)
e. Lending institutions(S)
f. Securities and Exchange Commission (S)
g. Stockholders(S)
h. Chief executive officer (I)
i. Suppliers (T)
j. Bondholders (S)
Review Questions:

1. What are the four levels of activity in the pyramid representing the business
organization? Distinguish between horizontal and vertical flows of information.
2. What is the relationship among data, information, and an information system?
3. Distinguish between AIS and MIS.
4. What are the three cycles of transaction processing systems?
5. What is discretionary reporting?
6. What are the characteristics of good or useful information?
7. What rules govern data collection?
8. What are the levels of data hierarchy?
9. What are the three fundamental tasks of database management?
10. What is feedback, and how is it useful in an information system?
11. What are the fundamental objectives of all information systems?
12. What does stewardship mean, and what is its role in an information system?
13. List five functional areas and their sub-functions.
14. Distinguish the roles of internal and external auditors.
15. What is the role of a database administrator?