CBS Accounting Information Systems 3 — Questions and Answers
Question 1: Which AIS control technique uses check digits appended to account numbers to detect data entry errors?
- Field check
- Validity check
- Self-checking digit (Correct answer)
- Range check
Correct answer: Self-checking digit
Self-checking digits (e.g., Luhn algorithm) are calculated from the account number and used to verify that the number was entered correctly.
Question 2: The accounts payable module in an AIS typically interfaces with which other module to trigger payment?
- Fixed assets module
- Cash disbursements module (Correct answer)
- Revenue recognition module
- Payroll module
Correct answer: Cash disbursements module
After an invoice is approved in accounts payable, it triggers a payment transaction processed through the cash disbursements module.
Question 3: What is the purpose of a 'three-way match' in the expenditure cycle?
- Matching three approvers' signatures on a check
- Comparing purchase order, receiving report, and vendor invoice before payment (Correct answer)
- Reconciling three months of bank statements simultaneously
- Cross-checking three departments' budget requests
Correct answer: Comparing purchase order, receiving report, and vendor invoice before payment
Three-way matching verifies that the PO, receiving report, and vendor invoice agree in quantity and price before authorizing payment.
Question 4: Which type of AIS fraud involves an employee submitting fictitious vendor invoices to divert funds?
- Skimming
- Billing scheme (Correct answer)
- Payroll ghost employee
- Lapping
Correct answer: Billing scheme
A billing scheme involves creating shell companies or submitting false invoices to trick the organization into making fraudulent payments.
Question 5: In government budgeting AIS, which accounting basis recognizes revenues when measurable and available, and expenditures when the liability is incurred?
- Full accrual basis
- Cash basis
- Modified accrual basis (Correct answer)
- Encumbrance basis
Correct answer: Modified accrual basis
Modified accrual accounting is used by governmental funds, recognizing revenues when available and measurable, and expenditures when incurred.
Question 6: What does an 'encumbrance' entry in a government AIS represent?
- A completed expenditure recorded in the general ledger
- A reservation of budget authority for a committed but unpaid obligation (Correct answer)
- An error correction entry reversing a prior period transaction
- A transfer between appropriation accounts
Correct answer: A reservation of budget authority for a committed but unpaid obligation
An encumbrance reserves budget funds when a purchase order is issued, preventing over-commitment of appropriations before the invoice is received.
Question 7: Which AIS control ensures that the total of individual accounts receivable balances equals the accounts receivable control account in the general ledger?
- Hash total verification
- Subsidiary ledger reconciliation (Correct answer)
- Aging schedule review
- Bank reconciliation
Correct answer: Subsidiary ledger reconciliation
Subsidiary ledger reconciliation ensures the sum of individual customer balances agrees with the AR control account, detecting posting errors.
CBS Accounting Information Systems 3
Which AIS control technique uses check digits appended to account numbers to detect data entry errors?