WGU D217 Accounting Information Systems

a financial transaction

The primary input to the transaction processing system is

FRS provides information to external users; the MRS provides information to internal users.

The major difference between the financial reporting system (FRS) and the management reporting system (MRS) is the

whether the transactions are financial or nonfinancial that directly affect the processing of financial transactions

The author distinguishes between the accounting information system and the management information system based on

the purchase of computer

An example of a financial transactions is

log of customer calls

An example of a nonfinancial transaction is

the conversion cycle

The transaction processing system includes which of the following

the production of useful information

The goal of data processing is

tax authorities

Which of the following is an external end user?

internal auditing

An appraisal function housed within the organization that performs a wide range of services for management is

constituents

What factor conceptually distinguishes external auditing and internal auditing?

cash disbursements

What system is part of the expenditure cycle?

physical and financial

Both the revenue and the expenditure cycle can be viewed as having two parts. These key parts are

represent relationships between key elements of both manual and computer systems

System flowcharts do which one of the following?

oval

Which symbol is used to represent a data source or destination of documents and reports in a system flowchart?

Sales Order Processing

Which accounting application is least suited to batch processing?

there is a lag between the time when the economic event occurs, and the financial records are updated.

In contrast to a real-time system, in a batch processing system

processing takes place when the economic event occurs.

In contrast to a batch processing system, in a real-time system

block code

The coding scheme most appropriate for a chart of accounts is

a mnemonic code

When a firm wants its coding system to convey meaning without reference to any other document, it would choose

missing or unrecorded documents can be identified.

The most important advantage of sequential coding is that

Management Reporting System (MRS)

Li has implemented a new accounting information system (AIS) to help him manage his construction company. Li uses the information captured by the system to plan each project, forecasting the requirements for raw materials and the cash flow expected. Which AIS subsystem helps Li in planning?

Variance reports

Which information does the management reporting system (MRS) provide?

The decision maker wastes resources analyzing outdated information.

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization. What happens if the information is old?

The decision maker receives materially wrong information.

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization. What happens if the information is inaccurate?

The organization needs to review its credit-granting policies.

Which important information does external feedback about the level of uncollected customer accounts indicate to the management information system?

Raw material is moved into work-in process.

What is a type of data source for the accounting information system (AIS)?

It has unique information needs.

Why would an organization decide to develop its own custom information system?

Inaccurately recording sales and cash receipts transactions in journals and accounts.

An objective of internal controls is to mitigate the risk from errors and fraud. What is the primary risk associated with revenue cycle transactions?

It is a temporary file using a numeric filing system.

What does the letter N in an inverted triangle mean in a system flowchart?

Master file

Which digital computer file contains account data that are updated by transactions and includes the general ledger and subsidiary ledgers?

Parallelogram symbol

How would shipping logs be depicted in system flowchart?

This is an on-page connector used to replace flow lines that otherwise would cause excessive clutter on the page.

What is the circular symbol labeled A in the system flowchart?

Sequential coding supports the reconciliation of a batch of transactions at the end of processing.

What is an advantage of sequential codes?

Real-time systems process transactions individually when the events occur.

Why is there no lag time with real-time systems?

Collecting data only once

What does efficiency mean in the data collection process?

The decision maker does not have enough information in order to act.

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness and summarization. What happens if the information is incomplete?

The decision maker is overwhelmed by the amount of detail in the information.

Useful information has the following characteristics: relevance, timeliness, accuracy, completeness and summarization. What happens if the information lacks summarization?

Complete

An office manager receives the following marketing fax from a current supplier: "Our company is having a promotion this month for all our main products. Please call for more information." Which characteristic of useful information is missing from this scenario?

They are the domain experts, determining the nature of the information required, its source, its destination, and the rules that need to be applied.

Why are accountants involved in the information system development team?

CDP uses a common data center for all the processing needs of the organization; in DDP, every department has its own processing capabilities.

What is the main difference between centralized data processing (CDP) and distributed data processing (DDP)?

Transactions processing system (TPS)

Sara has started a very successful online company selling custom-made jewelry. One of her competitive advantages is a state-of-art information system that provides visibility within the supply chain. Which one of the information system's subsystems helps Sara manage the customer orders she receives?

Organizational departments

A system flowchart is a graphical representation of the physical relationships among key elements of a system. What do these elements include?

It is a temporary file using a chronological filing system/

What does the letter C in an inverted triangle mean in a flowchart?

Master file

Which digital computer file contains account data that are updated by transactions and includes the general ledger and subsidiary ledgers?

Parallelogram symbol

How would shipping logs be depicted in a system flowchart?

Bucket-shaped symbol

In a system flowchart, how would a clerk's tasks of entering sales orders be depicted?

Master file backup

It is a standard and a necessity to maintain the master file integrity of an organization so that if the current master files become corrupt, destroyed, or plagued with errors, the organization has a recourse. What should the organization have in place in case of such an event?

the customer purchase order

Which document triggers the revenue cycle?

accounts payable

Which department is least likely to be involved in the revenue cycle?

bill the customer

The purpose of the sales invoice is to

supervision

Which type of control is considered a compensating control for customer payments?

the transfer of information among modules occurs automatically.

Commercial accounting systems have fully integrated modules. The word "integrated" means that

vendor

A copy of the purchase order (PO) is sent to the

accounts payable.

The departments involved in the purchasing process are purchasing, receiving, inventory control and

the liability account is decreased.

When a cash disbursement in payment of an accounts payable is recorded

accounts payable.

The greatest risk of misappropriation of funds occurs in

receiving.

In a firm with proper segregation of duties, adequate supervision as a compensating control is still necessary in

purchase of a new plant.

The fixed asset system records the

cash disbursements

In a technology enabled payroll system, Personnel, Time Keeping, Payroll, and Accounts Payable connect to which department to pay employees?

general ledger compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable.

An important reconciliation in the payroll system is

Paychecks are distributed by the employees' immediate supervisor.

Which of the following situations represents an internal control weakness?

Fully depreciated assets are disposed of immediately.

Which of the following is NOT a reasonable control for fixed assets?

balances for each account in the chart of accounts

What type of data is found in the general ledger master file?

comparative balance sheet

Which report is an output of the financial reporting system (FRS)?

that it focuses on internal decision-making information.

A characteristic of the management reporting system (MRS) is

volume, velocity, and variety of data

Big data analytics are characterized by

It tells that user what actions should be taken in response to specific questions.

What function does prescriptive analytics serve?

Sales order

Which item reflects vital information such as quantities and unit prices?

A credit memo issues automatically.

How do inventory control functions adjust inventory at the time of a return?

The sales clerk allows customers who are not creditworthy to buy items on the charge account.

Which risk is associated with charge accounts within the revenue cycle?

Updating inventory

Which function reflects the expenditure cycle?

Reconcile and verify contents

What is the purpose of the blind copy?

Buildings

Which item reflects fixed assets?

Implementation of agreements

What contributes to the success of the electronic date interchange system?

Direct deposit

What is an example of a payroll system information technology (IT) control?

Accounts payable

Which department is responsible for receiving the supplier's invoice, the purchase order, and the receiving report in order to post the acquisition of fixed assets?

Hours worked

Which information from timecards provides an audit trail to support financial reporting?

Journal vouchers are reviewed and approved as part of a system of internal control to ensure GL entries are authorized.

Why are journal vouchers reviewed and approved before entry into the general ledger (GL)?

A management reporting system contains data that can be used to monitor the company.

Why is a management reporting system a control?

The file uses the same format as the general ledger master, and therefore, the account structure will be the same for information year to year.

Why is the general ledger history file used for comparative financial reports?

A comparison of budgets to actual amounts and review of the variance.

Which comparison serves as a tool for managers by using data from the budget master file and from the responsibility center file?

The agreement details the quantities to be sold, guaranteed delivery times, payment terms, and methods handling disputes.

Which strategic agreement is made between buyer and seller for electronic data interchange?

Buyer refusing due to late arrival.

What is a reason for sales returns?

Unauthorized purchases

What is a risk associated with one clerk receiving inventory?

To review and examine content reported

What is the importance of supervisory control?

To reduce fraud

What is the purpose of authorized vendors?

The clerk must count and inspect all deliveries to ensure receipt of the right product.

Which procedure should be followed when receiving goods?

Hours worked

Which information from timecards provides an audit trail to support financial reporting?

Debit work-in-process; credit wages payable

Which entry is made to record wages payable?

Review and approval of the number of hours worked

Which task is included when a supervisor reviews and approves employee time (timecards, time sheets and job tickets)?

Special journals and subsidiary accounts of the general ledger

Which journals record the results of the transaction cycle?

A management reporting system contains data that can be used to monitor the company.

Why is a management reporting system a control?

A real-time general ledger/financial reporting system uses integrated transaction processing for concurrent posting in the system.

Which efficiencies do real-time general ledger/financial reporting systems have on an organization's ability to produce financial statements?

"Committee of Sponsoring Organizations of the Treadway Commission (COSC)

Which control framework does the general ledger/financial reporting system (GL/FRS) follow?

data redundancy

Which of the following is a problem usually associated with the flat-file approach to data management?

the inability to determine what data is available

Which problem is characteristically associated with the flat-file approach to data management?

the internal view

A description of the physical arrangement of records in the database is

the user view

Which of the following may provide many distinct view of the database?

occurs because of data redundancy.

The update anomaly in unnormalized tables

may result in the loss of important data.

The deletion anomaly in unnormalized tables