Chapter 1 – Accounting Information Systems and Firm Value Multiple Choice Questions 1. c 2. a 3. a 4. c 5. d 6. b 7. d 8. a 9. d 10. a 11. a 12. c 13. b 14. d 15. a Discussion Questions 1. How would an AIS help a company identify the products with the highest profit margin? Accounting information systems keep track of the revenues and the costs of each product. If the information is reliable, exhibiting the faithful representation qualities, AIS can compute the highest profit margin and highest profit margin percentages. This will help the company know how best to grow its profits, potentially by increasing sales of the products with highest profit margins and perhaps deemphasizing those of lowest profit margin. 2. Brainstorm a list of discretionary information that might be an output of an accounting information system and be needed by Starbucks. Prioritize which items might be most important and provide support. Answers will vary. Here are some potential answers: The cost of a cup of coffee, by type: Breakfast blend, Cafe estima, caffe Verona, espresso roast, Ethiopia sidamo, French roast, Gold Coast blend, Guatemala Antigua, house blend, Italian roast, Kenya coffee, komodo dragon blend, organic Serena blend, organic shade grown Mexico, Sumatra, decaf caffe Verona, decaf espresso roast, decaf house blend, and decaf Sumatra! Monthly Sales per square foot of retail space. Employee cost for each operating hour. Advertising expenditures per dollar of sales.