Information Systems Management (C724)
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Free Information Systems Management (C724) Questions
Who are the primary users of AIS
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Doctors
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Accountants and financial managers
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Engineers
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Chefs
Explanation
Correct Answer B. Accountants and financial managers
Explanation
AIS (Accounting Information Systems) are designed to collect, process, and store financial and accounting data. These systems support financial reporting, auditing, and decision-making for businesses. Accountants and financial managers use AIS to track transactions, analyze financial statements, and ensure compliance with regulations.
Why other options are wrong
A. Doctors – Doctors primarily use health information systems (HIS) and electronic medical records (EMR), not AIS, as their focus is on patient care rather than financial management.
C. Engineers – Engineers rely on CAD (Computer-Aided Design) software and project management tools rather than accounting systems for their work.
D. Chefs – Chefs use restaurant management and inventory systems rather than AIS, as their primary focus is food preparation and operations, not financial record-keeping
What is the primary purpose of a Management Reporting System (MRS) within an organization
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To generate financial statements for external stakeholders
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To provide real-time data for operational processes
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To create tailored reports that aid management in strategic decision-making
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To manage the organization's human resources effectively
Explanation
Correct Answer C. To create tailored reports that aid management in strategic decision-making
Explanation:
The primary purpose of a Management Reporting System (MRS) is to create customized reports that provide managers with the information they need to make strategic decisions. These reports often include performance metrics, budget comparisons, and trend analyses tailored to the specific needs of the organization.
Why Other Options Are Wrong:
A. To generate financial statements for external stakeholders
This option is incorrect because generating financial statements for external stakeholders is the role of financial accounting systems, not management reporting systems.
B. To provide real-time data for operational processes
This option is incorrect because providing real-time data for operational processes is typically the function of operational or transaction processing systems, not MRS.
D.To manage the organization's human resources effectively
This option is incorrect because managing human resources is the responsibility of human resource management systems, not management reporting systems.
What is the purpose of normalization in a database
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To organize data and improve efficiency
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To introduce inconsistency in data
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To complicate data storage
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To increase duplication in the database
Explanation
Correct Answer A. To organize data and improve efficiency
Explanation
Normalization is a process in database design that structures data to reduce redundancy and improve efficiency. It organizes data into related tables and enforces relationships, ensuring consistency and integrity. This minimizes data anomalies and enhances query performance.
Why other options are wrong
B. To introduce inconsistency in data – Normalization actually reduces inconsistency by enforcing rules that maintain data integrity and avoid duplication.
C. To complicate data storage – The purpose of normalization is not to make data storage more complex but to streamline it by organizing data properly. While it may require additional tables, it ultimately improves efficiency and usability.
D. To increase duplication in the database – Normalization reduces duplication by eliminating redundant data and ensuring that each piece of information is stored only once in the appropriate place.
In the context of an Accounting Information System (AIS), which of the following best describes the role of end users
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They are the individuals who design and maintain the AIS.
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They are the primary users who interact with the system to perform their tasks.
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They are external auditors who review the financial statements generated by the AIS.
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They are the regulatory bodies that enforce compliance with accounting standards.
Explanation
Correct Answer B. They are the primary users who interact with the system to perform their tasks.
Explanation:
End users in an Accounting Information System (AIS) are the individuals who interact with the system to perform their day-to-day tasks, such as entering data, generating reports, or analyzing financial information. They rely on the AIS to support their operational and decision-making activities.
Why Other Options Are Wrong:
A. They are the individuals who design and maintain the AIS.
This option is incorrect because individuals who design and maintain the AIS are typically IT professionals or system administrators, not end users.
C. They are external auditors who review the financial statements generated by the AIS.
This option is incorrect because external auditors are not end users of the AIS. They may review the outputs of the system but do not directly interact with it for daily tasks.
D. They are the regulatory bodies that enforce compliance with accounting standards.
This option is incorrect because regulatory bodies are not end users. They set standards and enforce compliance but do not use the AIS for operational purposes.
Which of the following is not a disadvantage of Distributed Data Processing
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Inefficient use of resources
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Inadequate segregation of duties
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Abatement of cost
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Lack of control
Explanation
Correct Answer C. Abatement of cost
Explanation:
Abatement of cost is not a disadvantage of Distributed Data Processing (DDP). In fact, DDP can reduce costs by decentralizing processing and reducing the need for a central data center. The other options (inefficient use of resources, inadequate segregation of duties, and lack of control) are common disadvantages of DDP.
Why Other Options Are Wrong:
A. Inefficient use of resources
This option is incorrect because inefficient use of resources is a disadvantage of DDP, as decentralized systems may lead to duplication of efforts or underutilization of resources.
B. Inadequate segregation of duties
This option is incorrect because inadequate segregation of duties is a disadvantage of DDP, as decentralized systems may lack the centralized oversight needed to enforce proper controls.
D. Lack of control
This option is incorrect because lack of control is a disadvantage of DDP, as decentralized systems can make it harder to maintain consistent standards and oversight across the organization.
Which of the following statements about the timeliness of information is FALSE
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Timeliness is a function of situational variables.
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Managers should have information in time to take appropriate action.
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Timely could imply that the information needs to be fast.
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Timely might mean next year in some cases.
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Timely information must reach the manager as quickly as possible.
Explanation
Correct Answer E. Timely information must reach the manager as quickly as possible.
Explanation
Timeliness refers to providing information when it is needed for decision-making. While speed is important, timely information does not always mean "as fast as possible"; rather, it should arrive at the appropriate time to be useful.
Why other options are wrong
A. Timeliness is a function of situational variables. – This is true because the importance of timeliness depends on the context in which the information is used.
B. Managers should have information in time to take appropriate action. – This is correct, as information should be available when decisions need to be made.
C. Timely could imply that the information needs to be fast. – In some situations, rapid information delivery is necessary, such as in financial markets or crisis management.
D. Timely might mean next year in some cases. – This is also true. Some types of information, such as annual financial reports, may only be relevant at specific intervals.
What is a data repository
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An information management software
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A place where data is stored
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A business process
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A hardware component
Explanation
Correct Answer B. A place where data is stored
Explanation
A data repository is a centralized location where data is collected, maintained, and accessed for analysis or reporting. It helps organize and manage large amounts of structured or unstructured data.
Why other options are wrong
A. An information management software. – A repository is a storage space, not a software system, though software may be used to manage it.
C. A business process. – A repository is a storage solution, not a process. Business processes may interact with data repositories but do not define them.
D. A hardware component. – A data repository is not a physical device but a conceptual space for storing data, which may exist on hardware.
What is the function of the general ledger in accounting
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To create financial statements
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To record all transactions electronically
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To serve as a record of all accounts used by a company
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To classify balance sheet items
Explanation
Correct Answer C. To serve as a record of all accounts used by a company
Explanation
The general ledger is the central repository of a company’s financial transactions, summarizing all accounts. It provides a complete record of all financial activity, forming the foundation for financial statement preparation.
Why other options are wrong
A. To create financial statements – The general ledger supports financial statement preparation, but creating financial statements involves additional steps such as journal entries and trial balances.
B. To record all transactions electronically – While modern systems do use electronic records, the primary function of the general ledger is to organize and summarize transactions, not just store them electronically.
D. To classify balance sheet items – The general ledger contains more than just balance sheet items; it includes income statement accounts as well.
In what way does Distributed Data Processing (DDP) enhance the overall experience for users within an organization
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By centralizing data management to improve consistency
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By enabling faster access to data through localized processing
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By restricting user access to sensitive information
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By increasing the complexity of data handling procedures
Explanation
Correct Answer B. By enabling faster access to data through localized processing
Explanation
DDP allows data processing to occur at multiple locations rather than a centralized system, improving speed and accessibility. By processing data closer to the users, it reduces bottlenecks and enhances efficiency.
Why other options are wrong
A. By centralizing data management to improve consistency. – DDP decentralizes data processing rather than centralizing it, which can sometimes lead to slight inconsistencies.
C. By restricting user access to sensitive information. – While security measures can be part of DDP, its main purpose is not to restrict access but to enhance performance.
D. By increasing the complexity of data handling procedures. – DDP is designed to improve user experience, not complicate processes. It may introduce some management challenges, but its primary goal is efficiency.
In what ways does an accounting information system enhance the efficiency of daily business activities
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By automating transaction processing and generating real-time financial reports
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By limiting access to financial data to only top management
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By focusing solely on external reporting requirements
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By eliminating the need for any financial oversight
Explanation
Correct Answer A. By automating transaction processing and generating real-time financial reports
Explanation
An accounting information system streamlines financial operations by automating transactions, reducing human errors, and providing timely insights into financial data, which enhances decision-making.
Why other options are wrong
B. By limiting access to financial data to only top management. – While access control is important, restricting data to top management does not necessarily improve efficiency.
C. By focusing solely on external reporting requirements. – Accounting information systems also support internal decision-making, not just external reporting.
D. By eliminating the need for any financial oversight. – Oversight remains crucial to ensure compliance, accuracy, and fraud prevention, even with automation.
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