Reference no: EM131264109

Accounting Information Systems

Statement evaluation: Your job is to explain whether each statement is (i) always true, (ii) sometimes true, or (iii) never true. If you answer (ii) sometimes true, explain when the statement is true

a) Data in the accounting information system are stored electronically, such as on a disk.

b) “Truth” is one of the qualitative characteristics identified by the FASB conceptual framework.

c) The FASB conceptual framework identifies ten elements of financial statements

d) Information you find on the Internet is reliable

e) Cost-effectiveness is an important criterion in the design of accounting information systems.

f) A Web site that is “under construction” may have a problem with adequate coverage according to the UMUC information criteria.

g) Both internal and external parties can use information provided by the accounting system

h) Most companies have two different accounting information systems: one for internal use and one for external use.

i) In an AIS, source documents are paper-based

j) Problems and questions in accounting information systems are open-ended; they do not have “right” or “wrong” answer

k) Bookkeeping and accounting are two ways of referring to the same thing

l) If a transaction increases a liability, it will also increase an expense

m) The accounting cycle involves human judgment

n) A company’s chart of accounts should use block coding

o) Information technology has eliminated the need for human judgment in the account cycle

p) An “accrual” refers to a situation where a company provides service before receiving cash

q) An adjusting entry for depreciation recognizes as asset’s loss in market value over time

r) Adjusting entries involve one balance sheet account and one income statement account, but never cash

s) In automated accounting information systems, block coding facilitates closing entries

t) The complete accounting cycle incorporates three different forms of trial balance.