ac310 multiple choice

1. The accounting information communicates to stakeholders:

A. Minimally required public financial data B. The financial outcomes of operating, investing, and financing activities C. Black and white details about the economics of operating activities D. The sales strategy for operating and marketing

B. The financial outcomes of operating, investing, and financing activities

2. Which of these statements about information systems is correct?

A. They report information in standard format only B. They are difficult to analyze using traditional software tools C. They capture only financial data D. They collect, process, store, and report information

D. They collect, process, store, and report information

3. How does data differ from information?

A. Information is generated by business events; data is used for decision making B. Data is ready to be used; information must be processed C. Data is input; information is output D. Information is input; data is output

C. Data is input; information is output

4. In which of the three types of business processes in the basic business model does a business deliver products to its customers?

A. Conversion B. Sales and collections C. Acquisitions and payments D. Delivery contracts

B. Sales and collections

5. In which of the three types of business processes in the basic business model does a business interact with vendors?

A. Accounts receivable B. Conversion C. Sales and collections D. Acquisitions and payments

D. Acquisitions and payments

6. In which of the three types of business processes in the basic business model does a business transform resources into a product or service that customers want?

A. Accounts receivable B. Sales and collections C. Conversion D. Acquisitions and payments

C. Conversion

7. A synonym for faithful representation is:

A. Understandability B. Neutrality C. Accuracy D. Verifiability

C. Accuracy

8. In terms of the qualitative characteristics of financial information, which of the following presents a fundamental qualitative characteristic?

A. Timeliness B. Verifiability C. Comparability D. Relevance

D. Relevance

9. Data analytics is the process of using technology to transform:

A. Data into useful information B. Business event data into business process data C. Unreliable data into reliable data D. Accounting data into business data

A. Data into useful information

10. Which of the following is an important skill related to data analytics that new accounting professionals need to learn?

A. How to recognize data quality issues B. How to code programming languages C. Web design D. How to use statistical methods

A. How to recognize data quality issues

11. Choose the best description of risk.

A. The estimated probability of occurrence B. The estimation of damage that could be caused C. The high-level business area or department D. The likelihood of an unfavorable event occurring

D. The likelihood of an unfavorable event occurring

12. When performing risk assessment, the tasks are organized as:

A. Identify, prioritize, respond B. Identify, categorize, prioritize C. Prioritize, identify, categorize D. Categorize, prioritize, identify

B. Identify, categorize, prioritize

13. A risk statement includes an:

A. Issue and a possible outcome B. Impact and a possible outcome C. Issue and a categorization D. Issue and a risk

A. Issue and a possible outcome

Which of the following risk categories relate to external rather than internal risk?

A. Compliance, physical, and reputational risk

B. Operational, strategic, and financial risk

C. Physical, compliance, and reputational risk

D. Physical, compliance, and strategic risk

D. Physical, Compliance, and strategic risk

15. Risk severity can be evaluated by:

A. Prioritizing risks by ranking their likelihood of occurring and their potential impact on the organization B. Estimating the harm that could potentially result if a risk becomes a reality C. Estimating the probability of the risk occurring D. Calculating frequency or probability of the risk inherent in a scenario

A. Prioritizing risks by ranking their likelihood of occurring and their potential impact on the organization

16. Which of the following is an example of a risk statement?

A. A cybersecurity attack may result in theft of customer data. B. An oven fire may result in the destruction of a store. C. An employee stealing from a cash register may result in loss of cash. D. A store employee getting sick may result in them backing out of their shift.

A. A cybersecurity attack may result in theft of customer data.

17. An organization has a 1-5 scale for Likelihood and Impact. What is the risk score for a defined risk with a high likelihood (5) and a medium-low impact (2)?

A. 5 B. 3 C. 2.5 D. 10

D. 10

18. Choose the best definition of residual risk.

A. Residual risk is the risk to a business process of a natural disaster such as a fire or earthquake. B. Residual risk is the risk to a business process of a cybersecurity leak. C. Residual risk is the natural level of risk in a business process if there are no risk responses in place. D. Residual risk is the remaining risk posed by a process or activity once a plan to respond to the risk is in place.

D. Residual risk is the remaining risk posed by a process or activity once a plan to respond to the risk is in place.

19. Choose the best definition of inherent risk.

A. Inherent risk is the risk to a business process of a natural disaster. B. Inherent risk is the remaining risk once a plan is in place. C. Inherent risk is the natural level of risk in a business process if there are no risk responses in place. D. Inherent risk is the risk to a business process of a cybersecurity leak.

C. Inherent risk is the natural level of risk in a business process if there are no risk responses in place.

20. Traditional risk responses available to management are:

A. Accept, mitigate, transfer, avoid B. Defeat, amplify, ignore, reject C. Accept, mitigate, defeat, amplify D. Accept, implement internal controls, ignore, reject

A. Accept, mitigate, transfer, avoid

21. A company’s process of implementing internal control provides reasonable assurance that:

A. Financial statements are fairly presented B. Operations are efficient and effective C. Laws and regulations are being followed D. All of these answer choices are correct

D. All of these answer choices are correct

22. Which of the following options correctly describes the three functions of internal controls?

A. Analyzing, implementing, evaluating B. Planning, organizing, controlling C. Monitoring, assessing, reviewing D. Preventing, detecting, correcting

D. Preventing, detecting, correcting

23. Select the correct set of accounting functions that must be separated to segregate duties effectively:

A. Recording, authorizing, custody B. Data input, information output, storage C. Recording, authorizing, planning D. Planning, recording, auditing

A. Recording, authorizing, custody

24. A control is characterized by its:

A. Type, location, and implementation B. Location, implementation, technology C. type, technology, location D. function, location, and implementation

D. function, location, and implementation

25. _____ controls are often more reliable and consistent than _____ controls because they are not subject to errors or overrides.

A. Automated; detective B. Manual; automated C. Manual; detective D. Automated; manual

D. Automated; manual

26. Who in an organization is responsible for making sure that internal controls are functioning as designed?

A. Management B. Internal audit department C. External auditors D. All of these answer choices are correct

D. All of these answer choices are correct

27. What type of tool is used to measure how far a company is on its journey to reach the ideal state?

A. Maturity ruler B. Optimization model C. Optimization ruler D. Maturity model

D. Maturity model

28. The goal of the Sarbanes-Oxley Act of 2002 is to:

A. Protect investors from the risk of increased taxes. B. Protect companies from the U.S. government interfering. C. Protect investors from fraud and other risks by improving the reliability and accuracy of financial statements. D. Protect the U.S. government from fraudulent acts committed by U.S. companies.

C. Protect investors from fraud and other risks by improving the reliability and accuracy of financial statements.

29. Which of the following is the best definition of the COSO Cube?

A. The COSO Cube is a three-dimensional illustration that depicts how all parts of the Internal Control Integrated Framework are related. B. The COSO Cube is a three-dimensional illustration of management hierarchy. C. The COSO Cube is a diagram used to list control objectives for a firm. D. The COSO Cube is a technique to randomize control components.

A. The COSO Cube is a three-dimensional illustration that depicts how all parts of the Internal Control Integrated Framework are related.

30. Which component of the COSO Internal Control-Integrated Framework provides guidance on ethical values and integrity?

A. Information and communication B. Risk assessment C. Control environment D. Monitoring activities

C. Control environment

31. How do accounting information systems contribute to decision-making in an organization?

A. By providing real-time data for managerial decision-making B. By automating routine bookkeeping tasks C. By generating financial reports for external stakeholders D. By ensuring compliance with accounting standards

A. By providing real-time data for managerial decision-making

32. All accounting information systems are:

A. Executive support systems B. Management information systems C. Decision support systems D. Transaction processing systems

D. Transaction processing systems

33. Cloud computing provides a customer with access to shared resources over the internet. What cloud model is owned by a single organization?

A. Public cloud B. Private cloud C. Proprietary cloud D. Hybrid cloud

B. Private cloud

34. What accounting software package did Julia’s Cookies use when they were a startup?

A. QuickBooks B. Oracle DBMS C. Microsoft Outlook D. Microsoft Access

A. QuickBooks

35. What are the three main models of cloud computing?

A. Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS) B. Physical Infrastructure, Virtual Infrastructure, Hybrid Infrastructure C. Public Cloud, Private Cloud, Community Cloud D. On-demand Cloud, Shared Cloud, Private Cloud

A. Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS)

36. What type of accounting system provides a subscription-based model with no up-front investment?

A. A desktop system installed locally B. A cloud-based accounting solution with software residing on the web and data storage provided by the vendor C. A batch-processing system with cloud storage D. An ERP system installed locally

B. A cloud-based accounting solution with software residing on the web and data storage provided by the vendor

37. A small business may implement a compensating control such as manager supervision. This is an example of what control activity?

A. Segregation of duties B. Physical access C. Logical access D. Environmental access

A. Segregation of duties

38. Choose the best definition of systems integration.

A. Systems integration happens when one company purchases another company. B. Systems integration is separating one company into two or more separate entities. C. Systems integration is a combination of two separate companies. D. Systems integration is the process of joining different systems or subsystems into one larger system and ensuring that they function as one system.

D. Systems integration is the process of joining different systems or subsystems into one larger system and ensuring that they function as one system.

Successful ERP systems support the core business processes in a company’s operations. Every function within the ERP is called a module. What is the best definition of the financial module?

A. Coordinates the entire supply chain, from purchasing of raw materials and supplies to inventory management and warehousing.

B. The most important ERP module that captures accounting data and generates financial documents, including financial statements, tax forms, and receipts.

C. Manages production activities including machine operations and scheduling.

D. Captures and stores all customer information.

B. The most important ERP module that captures accounting data and generates financial documents, including financial statements, tax forms, and receipts.

40. What is the main purpose of enterprise resource planning (ERP) systems and accounting information systems?

A. To integrate and streamline business processes B. To facilitate employee communication C. To manage customer relationships D. To track sales and revenue

A. To integrate and streamline business processes