End of Chapter Solution s Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition 1 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. Solution Manual for Accounting Information Systems, 4th Edition by Vernon Richardson, Chengyee Chang, Rod Smith Chapter 1: Accounting Information Systems and Firm Value Multiple Choice Questions 1. (LO 1 -1) Accounting information systems a. are always c omputerized. b. report only financially related information. c. are information systems that record, process, and report on transactions to provide financial and nonfinancial information for decision making and control. d. require a CITP designation to und erstand. Answer: C 2. (LO 1 -1) Which of the following is a characteristic of relevance? a. Materiality b. Timeliness c. Verifiable d. Cost to generate Answer: A 3. (LO 1 -2) Which of the following is considered to be mandatory information required by a regulatory body? a. 10 -Q submission to the Securities and Exchange Commission b. The cost to produce a Samsung Galaxy c. The number of organic bananas that are sold at Whole Foods on July 28 d. The cost to build an all -new Starbucks restaurant in Shenzhe n, China Answer: A 4. (LO 1 -4) The correct order of events in the value chain is a. Inbound logistics ➛ Operations ➛ Service. b. Inbound logistics ➛ Outbound logistics ➛ Marketing and sales. End of Chapter Solution s Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition 2 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. c. Inbound logistics ➛ Operations ➛ Outbound logistics. d. Inb ound logistics ➛ Operations ➛ Marketing and Sales. Answer: C 5. (LO 1 -8) Which system contributes information on direct labor to a cost accounting system? a. Supply chain management system (SCMS) b. Financial reporting system (FRS) c. Customer Relationa l Management System (CRM) d. Human resource management system (HRMS) Answer: D 6. (LO 1 -7) A supply chain a. supplies jewelry chains. b. refers to the flow of materials, information, payments, and services. c. is similar in function and purpose to the v alue chain. d. does not apply to a service firm like an accounting firm. Answer: B 7. (LO 1 -7) Customer relationship management software does not include information about a. current customers. b. prospective customers. c. former customers. d. current e mployees. Answer: D 8. (LO 1 -6) An information system that measures and records accounting transactions and reports them in the financial statements is called a a. financial reporting system (FRS). b. enterprise system (ES). c. manufacturing system (MS) . d. cost accounting system. Answer: A 9. (LO 1 -3) What is the name of the position for a person responsible for determining Information needs of a business and designing a system to meet those needs? a. Chief information officer b. Controller End of Chapter Solution s Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition 3 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. c. IT aud itor d. Systems analyst Answer: D 10. (LO 1 -9) The balance sheet account most likely affected by an AIS investment in supply chain management software would be a. inventories. b. fixed assets. c. cash and cash equivalents. d. unearned revenue. Answer: A 11. (LO 1 -7) The software/system that helps make sure the retail firm doesn’t have a stockout is a. supply chain management software. b. customer relationship management software. c. enterprise systems. d. human resource systems. Answer: A 12. (LO 1 -9) Data analytics performed to identify the most profitable customers would be most likely to affect which income statement account? a. Selling, general, and administrative expenses (SG&A) b. Interest expense c. Revenues d. Cost of goods sold Answer: C 13. (LO 1 -7, LO 1 -9) Customer relationship management systems would generally be considered to be an a. internal business process. b. external business process. c. interior business process. d. exterior business process. Answer: B 14. (LO 1 -3) An audito r testing internal controls would generally be considered to fill which role with respect to accounting information systems? a. User End of Chapter Solution s Manual: Richardson, Chang, Smith, Accounting Information Systems, 4th edition 4 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. b. Manager c. Designer d. Evaluator Answer: D 15. (LO 1 -2) Which of these represents the proper transformation from data to decision according to the information value chain? a. Data ➛ Information ➛ Knowledge ➛ Decision b. Data ➛ Knowledge ➛ Information ➛ Decision c. Data ➛ Business event ➛ Information ➛ Decision d. Data ➛ Analysis ➛ Information ➛ Decision Answer: A Discussion Questions 1. Brainstorm a list of discretionary information that might be an output of an accounting information system and be needed by Starbucks. Prioritize which items might be most important and provide support. Answers will vary. Here are some potential answers: The cost of a cup of coffee, by type: Breakfa st blend, Cafe estima, caffe Verona, espresso roast, Ethiopia sidamo, French roast, Gold Coast blend, Guatemala Antigua, house blend, Italian roast, Kenya coffee, komodo dragon blend, organic Serena blend, organic shade grown Mexico, Sumatra, decaf caffe V erona, decaf espresso roast, decaf house blend, and decaf Sumatra! Monthly Sales per square foot of retail space. Employee cost for each operating hour. Advertising expenditures per dollar of sales. The cost of condiments per dollar sales of coffee. Condim ents might include sweeteners, liquid creamers, cream canisters, sugar packets, sugar canisters, stir sticks! The cost of electricity per operating hour each month of the year. 2. Explain the information value chain. How do business events turn into data th en into information and then into knowledge? Give an example starting with the business event of the
