2: Introduction to Transaction Processing

True

Processing more transactions at a lower unit cost makes batch processing more efficient than real-time systems.

False

The process of acquiring raw materials is part of the conversion cycle.

True

Directing work-in-process through its various stages of manufacturing is part of the conversion cycle.

True

The top portion of the monthly bill from a credit card company is an example of a turn-around document.

False

The general journal is used to record recurring transactions that are similar in nature.

False

Document flowcharts are used to represent systems at different levels of detail.

False

Data flow diagrams represent the physical system.

True

Document flowcharts are often used to depict processes that are handled in batches.

False

Program flowcharts depict the type of media being used (paper, magnetic tape, or disks) and terminals.

True

System flowcharts represent the input sources, programs, and output products of a computer system.

True

Program flowcharts are used to describe the logic represented in system flowcharts.

True

Batch processing systems can store data on direct access storage devices.

False

Backups are automatically produced in a direct access file environment.

False

The box symbol represents a temporary file.

True

Auditors may prepare program flowcharts to verify the correctness of program logic.

True

A control account is a general ledger account which is supported by a subsidiary ledger.

True

The most significant characteristic of direct access files is access speed.

False

Real time processing is used for routine transactions in large numbers.

False

Batch processing is best used when timely information is needed because this method processes data efficiently.

False

An inverted triangle with the letter “N” represents a file in “name” order.

True

Real-time processing in systems that handle large volumes of transactions each day can create operational inefficiencies.

False

Operational inefficiencies occur because accounts unique to many concurrent transactions need to be updated in real time.

True

Operational inefficiencies occur because accounts common to many concurrent transactions need to be updated in real time.

True

Batch processing of noncritical accounts improves operational efficiency.

False

Batch processing of accounts common to many concurrent transactions reduces operational efficiency.

C

Which system is not part of the expenditure cycle?

a. cash disbursements

b. payroll

c. production planning/control

d. purchases/accounts payable

D

Which system produces information used for inventory valuation, budgeting, cost control, performance reporting, and make-buy decisions?

a. sales order processing

b. purchases/accounts payable

c. cash disbursements

d. cost accounting

A

Which of the following is a turn-around document?

a. remittance advice

b. sales order

c. purchase order

d. payroll check

B

The order of the entries made in the ledger is by

a. transaction number

b. account number

c. date

d. user

A

The order of the entries made in the general journal is by

a. date

b. account number

c. user

d. customer number

C

In general a special journal would not be used to record

a. sales

b. cash disbursements

c. depreciation

d. purchases

A

Which account is least likely to have a subsidiary ledger?

a. sales

b. accounts receivable

c. fixed assets

d. inventory

D

Subsidiary ledgers are used in manual accounting environments. What file is comparable to a subsidiary ledger in a computerized environment?

a. archive file

b. reference file

c. transaction file

d. master file

C

A journal is used in manual accounting environments. What file is comparable to a journal in a computerized environment?

a. archive file

b. reference file

c. transaction file

d. master file

C

In a computerized environment, a list of authorized suppliers would be found in the

a. master file

b. transaction file

c. reference file

d. archive file

D

Which of the following is an archive file?

a. an accounts payable subsidiary ledger

b. a cash receipts file

c. a sales journal

d. a file of accounts receivable that have been written off

C

Which document is not a type of source document?

a. a sales order

b. an employee time card

c. a paycheck

d. a sales return receipt

A

The most important purpose of a turn-around document is to

a. serve as a source document

b. inform a customer of the outstanding amount payable

c. provide an audit trail for the external auditor

d. inform the bank of electronic funds deposits

A

Which type of graphical documentation represents systems at different levels of detail?

a. data flow diagram

b. document flowchart

c. system flowchart

d. program flowchart

A

Data flow diagrams

a. depict logical tasks that are being performed, but not who is performing them

b. illustrate the relationship between processes, and the documents that flow between them

and trigger activities

c. represent relationships between key elements of the computer system

d. describe in detail the logic of the process

B

Document flowcharts

a. depict logical tasks that are being performed, but not who is performing them

b. illustrate the relationship between processes, and the documents that flow between them

and trigger activities

c. represent relationships between key elements of the computer system

d. describe the logic of the process

B

When determining the batch size, which consideration is the least important?

a. achieving economies by grouping together large numbers of transactions

b. complying with legal mandates

c. providing control over the transaction process

d. balancing the trade off between batch size and error detection

A

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

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

b. relatively more resources are required

c. a greater resource commitment per unit of output is required

d. processing takes place when the economic event occurs

D

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

a. a lag occurs between the time of the economic event and when the transaction is recorded

b. relatively fewer hardware, programming, and training resources are required

c. a lesser resource commitment per unit of output is required

d. processing takes place when the economic event occurs

C

The type of transaction most suitable for batch processing is

a. airline reservations

b. credit authorization

c. payroll processing

d. adjustments to perpetual inventory

D

The type of transaction most suitable for real-time processing is

a. recording fixed asset purchases

b. recording interest earned on long-term bonds

c. adjusting prepaid insurance

d. recording a sale on account

D

Which step is not found in batch processing using sequential files?

a. control totals

b. sort runs

c. edit runs

d. immediate feedback of data entry errors

B

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

a. manual and computerized

b. physical and financial

c. input and output

d. batch and real-time

C

All of the following can provide evidence of an economic event except

a. source document

b. turn-around document

c. master document

d. product document

C

Which method of processing does not use the destructive update approach?

a. batch processing using direct access files

b. real-time processing

c. batch processing using sequential files

d. all of the above use the destructive update approach

B

Which symbol represents a data store?

D

Which symbol represents a manual operation?

A

Which symbol represents accounting records?

B

Which symbol represents a document?

D

Which symbol represents a magnetic tape (sequential storage device)?

A

Which symbol represents a decision?

C

The characteristics that distinguish between batch and real-time systems include all of the following except

a. time frame

b. resources used

c. file format

d. efficiency of processing

A

A file that stores data used as a standard when processing transactions is

a. a reference file

b. a master file

c. a transaction file

d. an archive file

D

Sequential storage means

a. data is stored on tape

b. access is achieved through an index

c. access is direct

d. reading record 100 requires first reading records 1 to 99

C

Real-time processing would be most beneficial in handling a firm’s

a. fixed asset records

b. retained earning information

c. merchandise inventory

d. depreciation records

C

Which accounting application is least suited for batch processing?

a. general ledger

b. vendor payments

c. sales order processing

d. payroll

D

Which accounting application is best suited for batch processing?

a. general ledger

b. vendor payments

c. sales order processing

d. payroll

B

Operational inefficiencies occur because

a. accounts both common and unique to many concurrent transactions need to be updated in real time.

b. accounts common to many concurrent transactions need to be updated in real time.

c. accounts unique to many concurrent transactions need to be updated in real time.

d. None of the above are true statements

C

Operational efficiencies can be improved by

a. updating accounts both common and unique to many concurrent transactions in real time.

b. updating accounts both common and unique to many concurrent transactions in batch mode.

c. updating accounts unique to many concurrent transactions in real time and updating common accounts in batch mode.

d. None of the above are true statements