Accounting Info Systems 2

Which of the following is not a step in the data processing cycle?

a.       Data Validation

b.       Data Input

c.       Data Storage

d.       Data Processing

A

Recording and processing information about a transaction at the time it occurs is referred to as which of the following?

a.       Batch processing

b.      Real-time processing

c.       Captured transaction processing

d.       Chart of accounts processing

B

How does the chart of accounts list general ledger accounts?

a.       Alphabetical order

b.       Chronological order

c.       Size order

d.      The order in which they appear in financial statements

D

Which one below is not a type of data processing activity?

a.       Creating

b.       Updating

c.       Recording

d.       Reading

C

According to the Deloitte CIO Survey, what is the most common barrier to implementing ERP systems?

a.       Cost

b.       Unrealistic expectations

c.       Resistance to change

d.       Poor project management

C

What is a key advantage of an ERP system for companies?

a.       It fosters cohesive internal communication

b.       It prioritizes data segregation among different business functions to ensure information security

c.       It allows companies to purchase individual modules to meet specific needs

d.       It streamlines the company’s focus onto one specialized module, enhancing efficiency and performance

C

Which of the following is not an advantage of an ERP system?

a.       Better access control

b.       Standardization of procedures and reports

c.       Improved monitoring capabilities

d.      Simplicity and reduced costs

D; They are complex and costly to implement.

Match the common business activities with the corresponding source documents.

1. Collect employee withholding data______________Sales order

2. Receive cash__________________________________Purchase order

3. Request items_________________________________Timecards

4. Adjust customer account _______________________Remittance advance or remittance list

5. Record time worked by employees______________Purchase requisition

6. Take customer orders__________________________W-4 Form

7. Order items from vendors_______________________Credit memo

a. W-4
b. Remittance advance or remittance list
c. Purchase requisition
d. Credit memo
e. Timecard
f. Sales Order
g. Purchase Order

Which of the following documents is MOST likely to be used in the expenditure cycle?

a.       sales order

b.       credit memo

c.       receiving report

d.       job time ticket

C

Which of the following is LEAST likely to be a specialized journal?

a.       Sales journal

b.       Cash receipts journal

c.       Prepaid insurance journal

d.       Cash disbursements journal

C

All the information (name, GPA, major, etc) about a particular student is stored in the same _____.

a.       File

b.      Record

c.       Attribute

d.       Field

B

Why is it important to have sound internal controls in an ERP implementation? Select all that apply.

a.       Sound internal controls promote accountability and prevent errors through segregation of duties

b.       Sound internal controls grand wide access to ERP systems, fostering collaboration

c.       Sound internal controls expedite the implementation process, ensuring swift deployment.

d.      Sound internal controls streamline data validation processes, ensuring accuracy

A & D

Exercise – Master vs Transaction File
Label each of the following as either “Master” or “Transaction”.

1.       Record sales commissions

2.       Change customer credit limit

3.       Change employee rates

4.       Record purchases

5.       Record payroll checks

1.       Record sales commissions

Transaction

2.       Change customer credit limit

Master

3.       Change employee rates

Master

4.       Record purchases

Transaction

5.       Record payroll checks

Transaction

Exercise – Batch vs Real Time Processing

Label each of the following as either “Batch” or “Real Time” processing.

1.       Process biweekly payroll checks

2.       Make an airline reservation

3.       Identify and order a replacement drill bit broken during production

4.       Register for a course

5.       Make monthly customer payments

1.       Process biweekly payroll checks
Batch

2.       Make an airline reservation
Real Time

3.       Identify and order a replacement drill bit broken during production
Real Time (depends on context, though)

4.       Register for a course
Real Time

5.       Make monthly customer payments
Batch

What is the Data Processing Cycle?
a. A set of internal controls used to safeguard company data during transmission
b. The operations performed on data to generate meaningful and relevant information
c. A method for verifying the accuracy of financial statements before release
d. A system that stores and archives all transaction records for future reference

B

What are the four steps of the Data Processing Cycle?

Data Input, Data Processing, Data Storage, Information Output

What is data input usually triggered by?
a. A scheduled system update performed by the IT department
b. A management directive issued at the start of each period
c. An external audit request submitted by a regulatory body
d. A business activity that occurs within the organization

D

What are the three steps in Data Input?
a. Capture and enter the data, encrypt the data, and archive the data for compliance
b. Capture and enter the data, validate the data against external sources, and generate a report
c. Capture and enter the data, ensure accuracy and completeness, and ensure company policies are followed
d. Capture and enter the data, classify the data by department, and forward the data to management

C

What enhances the accuracy and completeness of captured data?
a. Manual double-entry verification, employee training, and periodic audits
b. Source data automation, well-designed turnaround documents, and data entry screens
c. Internal controls, encryption protocols, and access restrictions
d. Batch processing, real-time validation, and error logging procedures

B

Data must be collected about which three aspects of a business activity?
a. The transaction amount, the approval status, and the department involved
b. The date of the transaction, the location, and the responsible manager
c. The activity of interest, the resources affected, and the people who participated
d. The source document, the account code, and the audit trail

C

What captures data at the source when a transaction takes place?
a. A master file
b. A control account
c. A source document
d. A data value

C

How do source data automation devices capture transaction data?
a. Data captured in machine-readable form at the time and place of origin
b. Transaction data is captured in a human-readable format
c. Through manual data entry and processing via automation
d. In an unreadable form but later converted into machine-readable form

A

A utility bill is an example of a(n)
a. Source document used to record daily sales transactions
b. Chart of accounts entry
c. General ledger summary
d. Turnaround document

D

An important AIS function is to process transactions _____ and _____

Efficiently and effectively

A woman in texas discovered that she was wrongfully charged 1.3 million dollars in electricity bills. This case relates to which part of the data processing cycle?
a. Data Processing
b. Data Input
c. Data Storage
d. Information Output

B

Data must be collected about three aspects of a business activity:

1. The activity of interest (ex: a sale at the store)

2. Resources affected by each activity (ex: inventory)

3. The people who participated (ex: employee)

Which of the following best describes a source document?
a. A document generated internally to summarize monthly account totals
b. A permanent record used to store cumulative customer information
c. A document that captures data at the source when a transaction takes place.
d. A report generated by the system after a transaction has been processed

C

A record that is sent to an external party, and then returned to the system later as an input
a. Source data automation
b. Master file
c. Specialized journal
d. Turnaround document

D

The collection of transaction data in machine-readable form at the time and place of origin
a. Turnaround documents
b. Source data automation
c. General journals
d. Control accounts

B

Regarding data input, POS machines and QR codes are all examples of:
a. Turnaround documents
b. Source data automation
c. Data entry screens
d. Master files

B

T/F Data doesn’t have to be stored in a manner that is accessible as long as it can be read by a computer

False; it must be easily accessible

Contains summary level data for all accounts
a. General Journals
b. Subsidiary legers
c. General ledgers
d. Specialized Journals

C

Contains detailed data for any general ledger account with many individual accounts
a. General Journals
b. Subsidiary legers
c. General ledgers
d. Specialized Journals

B

Which of the following accounts are the best example of a subsidiary ledger?
a. Accounts receivable
b. Cash
c. Retained earnings
d. Owner's equity

A

Records infrequent or non-routine transactions
a. General Journals
b. Subsidiary ledgers
c. General ledgers
d. Specialized Journals

A

Records repetitive transactions, like sales or cash.
a. General Journals
b. Subsidiary legers
c. General ledgers
d. Specialized Journals

D

A type of general ledger account that summarizes the total amounts recorded in a subsidiary ledger
a. Control account
b. Specialized journal
c. General journal
d. General Ledger

A

A subsidiary ledger balance should equal the _____ balance

control account

Why does the storage component of the Accounting Information System contain many different types of accounts?
a. To reduce the overall cost of maintaining financial records
b. To create an audit trail
c. To simplify the process of generating tax documents
d. To eliminate the need for internal controls

B

Match the following definitions with their respective terms.

1. Items numbered consecutively to account for all items

2. Blocks of numbers reserved for specific categories of data

3. Two or more subgroups of digits used to code items

4. Letters and numbers interspersed to identify an item

Group codes, Block codes, Mnemonic codes, Sequence codes

1. Sequence codes

2. Block codes

3. Group codes

4. Mnemonic codes

Prenumbered forms, checks, and invoices are all examples of
a. Sequence codes
b. Group codes
c. Mnemonic codes
d. Block codes

A

“Product numbers that start with a two are refridgerators” is an example of
a. Sequence codes
b. Group codes
c. Mnemonic codes
d. Block codes

D

“If the digit is in position 1-2, it means color. If it’s in position 3-4, it means year of manufacture.” is an example of
a. Sequence codes
b. Group codes
c. Mnemonic codes
d. Block codes

B

“DRY300W05 is a low end (300) white (W) dryer (DRY) made by Sears (05)” is an example of
a. Sequence codes
b. Group codes
c. Mnemonic codes
d. Block codes

C

What are the three guidelines for a better coding system?
a. Be accurate, allow for review, be efficient
b. Be flexible, allow for automation, be secure
c. Be scalable, allow for redundancy, be traceable
d. Be consistent, allow for growth, be simple

D

A list of all the numbers assigned to each account that allows transactions to be coded, classified, and stored properly.
a. Chart of accounts
b. Control account
c. General ledger
d. Master file

A

What stores cumulative information about an organization permanently but can change frequently?
a. Master file
b. Transaction file
c. Control account
d. Specialized journal

A

Which of the following is an example of a master file?
a. Sales journal
b. Customer list
c. Cash receipts log
d. Daily transaction report

B

What contains records of individual business transactions that occur during a specific time, and is usually stored for the current period before being archived?
a. General ledger
b. Chart of accounts
c. Transaction file
d. Master file

C

Which of the following is an example of a transaction file?
a. Sales journal
b. Vendor list
c. Employee roster
d. Customer list

A

A set of interrelated master and transaction files is called a(n):
a. Subsidiary ledger
b. Database
c. Audit trail
d. Chart of accounts

B

Which of the following best distinguishes a master file from a transaction file?
a. Master files record specific transacitons, while transaction files store cumulative information
b. Master files store cumulative information, while transaction files record specific transactions
c. Master files are archived after the current period, while transaction files are permanent
d. Master files are updated in real time, while transaction files are updated periodically

B

What is a group of related records called?
a. File
b. Entity
c. Attribute
d. Field

A

What is something about which an organization wants to store data, such as a person, place, or event?
a. Record
b. Entity
c. Data value
d. Attribute

B

What are the characteristics of an entity called?
a. Fields
b. Records
c. Attributes
d. Data values

C

What is the portion of a data record where attributes are stored?
a. Field
b. File
c. Record
d. Entity

A

What is a set of fields where all the attributes of an entity are stored called?
a. Data value
b. File
c. Record
d. Entity

C

What is the actual value stored in a field called?
a. Attribute
b. Data value
c. Field
d. Entity

B

Which of the following best illustrates the relationship between these storage elements?

A customer's name, "John Smith," is stored within the "Name" portion of a customer record.
a. "John Smith" is the field, and "Name" is the data value
b. "John Smith" is the attribute, and "Name" is the entity
c. "Name" is the field, and "John Smith" is the data value
d. "Name" is the record, and "John Smith" is the field

C

What type of data processing involves data being accumulated and processed periodically?
a. Real-time
b. Online-batch
c. Batch

C

What type of data processing involves data being entered and edited in real time, but processed later?
a. Batch
b. Online-batch
c. Real-time

B

What type of data processing involves data being processed immediately after capture?
a. Online-batch
b. Real-time
c. Batch

B

A company that collects all of its sales transactions throughout the day and processes them together after closing is using which type of data processing?
a. Real-time
b. Batch
c. Online-batch

B

A bank that updates a customer's account balance the instant a withdrawal is made at an ATM is using which type of data processing?
a. Batch
b. Online-batch
c. Real-time

C

A retail system that lets an employee enter a return at the register right away, but doesn't update inventory totals until that night, is using which type of data processing?
a. Real-time
b. Online-batch
c. Batch

B

Information Output refers to stored data being viewed via which two formats?
a. Digital copy and analog copy
b. Hard copy and soft copy
c. Printed copy and archived copy
d. Primary copy and backup copy

B

Which form of Information Output is described as a record of transactions or other company data?
a. Reports
b. Queries
c. Documents
d. APIs

C

Which form of Information Output is described as an organized output used by employees to control operational activities, make decisions, and understand business activities?
a. Documents
b. Reports
c. Queries
d. APIs

B

What is described as the "backbone of reporting," referring to a basic request for the database to provide needed information?
a. Document
b. API
c. Turnaround document
d. Query

D

Which of the following is defined as a structured interface that allows one system to interact with another system offering a data service?
a. Query
b. Report
c. API
d. Master file

C

Walmart allowing suppliers to access their information system to view inventory levels is an example of which type of Information Output?
a. Document
b. Report
c. Query
d. API

D

An employee generating a monthly sales summary to help management decide which products to reorder is an example of which type of Information Output?
a. Document
b. Report
c. Query
d. API

B

When selecting an ERP, it is wise to consider:
a. The vendor's pricing structure
b. Industry alignment
c. The number of employees who will use it
d. The system's compatibility with legacy hardware

B

What is a system that integrates activities from the entire organization's operations—like accounting, finance, production, HR, etc.—into one system?
a. Database
b. ERP System
c. Accounting Information System
d. Data Processing Cycle

B

Which of the following is NOT listed as a module an ERP system consists of?
a. Financial
b. HR/Payroll
c. Customer relationship management
d. Source data automation
e. Project Management

D

Why is it essential that all data items be validated and checked for accuracy during the initial entry process in an ERP system?
a. To reduce the overall cost of implementation
b. To comply with external audit requirements
c. Any errors will be automatically propagated throughout the system
d. To ensure the system meets industry alignment standards

C

A good ERP system gives managers and employees…
a. Full access to the entire ERP system
b. A small portion of the system
c. Temporary access that expires monthly
d. Access based on seniority level

B

Which of the following is an ERP advantage related to data no longer needing to be entered separately by multiple departments?
a. Greater visibility and monitoring
b. Data captured once
c. Standardizes procedures and reports
d. Increases productivity via automation

B

Which of the following is an ERP advantage that refers to employees being able to view real-time information to assist customers?
a. Streamlined information
b. Better access control
c. Improved customer service
d. Standardizes procedures and reports

C

Which of the following is NOT listed as an ERP disadvantage?
a. Cost
b. Time to implement
c. User resistance
d. Reduced visibility and monitoring

D

Which ERP disadvantage refers to employees having difficulty learning new systems?
a. Complexity
b. User resistance
c. Time to implement
d. Customizing or standardizing business processes

B