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UNIT 1 ACTIVITY WORKSHEET

Accounting Information System: An Overview

I. Read each item carefully. Select the correct/best answer for each of the following questions and
write the letter of your choice on the space provided.

________ 1. An accounting information system serves many functions - which of the following
is not one of those functions?
a. Capture the details of a transaction
b. Implement the start of a transaction
c. Provide reports of transactions
d. Process the transactions details into appropriate accounts

________ 2. Which of the following does not apply to accounting system?

a. It is a systematic organization of business components to serve the over-all
entrepreneurial endeavor.
b. It facilitates management planning, control and decision making.
c. It provides the framework to protect the business and safeguard the assets.
d. It provides the means by which interested parties may be given information
on the financial position and results of operations of a business organization.

________ 3. When designing the data collection activity, which type of data should be avoided?
a. data that is relevant c. data that is efficient
b. data that is redundant d. data that is accurate

________ 4. Which of the following is not a financial transaction?

a. purchase of products c. cash receipts
b. update valid vendor file d. sale of inventory

________ 5. Accountants play many roles relating to the accounting information system,
including all of the following except
a. System users c. System designers
b. System auditors d. System converters

________ 6. Advantages of a database system include all of the following except

a. elimination of data redundancy c. open access to all data by all users
b. single update for changes in data d. confidence that all data is current

________ 7. Which of the following is not a database management task?

a. Retrieval c. storage
b. Summarization d. deletion

________ 8. The choice of accounting information system will depend on all of the following
except:
a. The size of the organization
b. The philosophy of management
c. The ability of the company to capture information
d. The nature of its processes

________ 9. The computer-based processing that requires all similar transactions be grouped
together and be processed at the same time, is referred to as:
a. Batch Processing. c. Online Processing.
b. Real-time Processing. d. Sequential Processing.

________ 10. Which activity is not part of the finance function?

a. cash receipts c. portfolio management
b. credit d. general ledger

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II. Prepare a cloud graphic organizer showing the different features of Accounting Information
System focusing on the AIS basic elements, subsystems, characteristics and the three roles of
Accountants. You can use the template below.

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III. Write the word “True” for each correct statement, otherwise “False”.

a) __________A set of two or more interrelated components that interact to achieve a goal is system.
b) __________Information is a business resource.
c) __________Transaction processing systems convert non-financial transactions into financial
transactions
d) __________Information lacking reliability may still have value.
e) __________Retrieval is the task of permanently removing obsolete or redundant records from
the database.

IV. Listed below are a number of the important users of accounting information. Below the list are
descriptions of a major need of each of these various users. Identify the user group that is most
likely to have the need described.

Company management Banker

Stockholder Supplier
Securities and Exchange Commission Labor union
Bureau of Internal Revenue

a) _______________The profitability of each division in the company.

b) _______________The prospects for future dividend payments.
c) _______________The profitability of the company since the last contract with the workforce
was signed.
d) _______________The financial status of a company issuing securities to the public for the first
time.
e) _______________The prospects that a company will be able to meet its interest payments on
time.
f) _______________The prospects that a company will be able to pay its purchases on time.
g) _______________The profitability of the company based on the tax code.

V. Match the description/situation listed in the right column with the information characteristic
listed in the left column.

________ 1. Reliable a. The report was carefully designed so that

the data contained in the report became
information to the reader.

_________ 2. Verifiable b. The manager was working one weekend

and needed to find some information
about product requests for a certain
customer. He was able to find the report on
the company’s network.

_________ 3. Complete c. The data in a report was checked by two

clerks working independently.

_________ 4. Understandable d. Shipments at the company are entered

into PCs in the shipping department office.
The paperwork often gets lost between the
shipping dock and the office, and some
shipments do not get entered.

_________ 5. Accessible e. At the company’s warehouse, personnel

write the picked quantity on the picking
ticket as the goods are picked from the
shelf. These clerks are not very careful and
the picked quantities are wrong.