ACCT 3301 - Exam 1

Which of the following statement is true concerning the process of recording a sales return? 1. The accounts receivable subsidiary records are updated at the time the sales Transaction Entry window is posted 2. The credit to accounts receivable is recorded at the time the Sales Transaction Entry Window is posted 3. The Sales Transaction Entry window is used to apply the sales return to a specific invoice or invoices 4. The Apply Sales Document Window is used to post the sales return to the General ledger 5. None of the above statements are true.

1. The accounts receivable subsidiary records are updated at the time the sales Transaction Entry window is posted

3 Fundamental Information Objectives common to all organizations

1. To support the firm's day to day operations 2. To support management decision making 3. To support the stewardship of management

After you record a payment received on outstanding accounts receivable through the Cash receipts Entry and Apply Sales Documents Windows, you separately record the bank deposit. What is the series of navigation steps you should use to record the bank deposit? 1. sales--Transaction-Cash receipts 2. Sales--transaction--receivable Money 3. Financial--Transactions--bank Deposits 4. Financial --transactions--Cash Receipts 5. Cash --transactions--bank deposits

3. Financial--Transactions--bank Deposits

There are two methods for Accounting for uncollectible accounts receivable, direct write-off and the allowance method. Under the allowance method, the write-off of a specific accounts receivable: 1. Decreases net income and decreases accounts receivable 2. Decreases net income and decreases working capital 3. Affects, neither net income nor accounts receivable 4. affects neither net income nor working capital 5. Increases bad debt expense and increases the allowance for doubtful accounts.

4. affects neither net income nor working capital

Which is a true statement regarding a document flowchart? A document flowchart is not normally used in evaluating internal control procedures. A document flowchart is more useful than a data flow diagram. A document flowchart illustrates the sequence of logical operations performed by a computer. A document flowchart is particularly useful in analyzing the adequacy of internal control procedures.

A document flowchart is particularly useful in analyzing the adequacy of internal control procedures.

Information System

A set of formal procedures by which data are collected, stored, processed into inform

Which of the following is NOT an objective of all information systems? Support for the day-to-day operations of the firm All of the above are objectives. Support for management decision making Support for the stewardship function of management

All of the above are objectives.

ERP systems are modular, with each module handling a standard business process. This modular design allows businesses to add or delete modules as needed. Which of the following are typical ERP modules mentioned in the text? (Check all that apply.) Vendor relationship management—procurement and promotion, vendor contact and service, and call center support. Order to cash—sales order entry, shipping, inventory, cash receipts, and commission calculation. Project management—costing, billing, time and expense, performance units, and activity management. Financial—general ledger, budgeting, cash management, and preparation of managerial reports and financial statements. System tools—tools for establishing master file data, specifying flow of information, and access controls.

All of the above except - Vendor relationship management—procurement and promotion, vendor contact and service, and call center support.

Accessible

Available to users when they need it and in a format, they can use

Complete

Does not omit important aspects of the events or activities it measures.

Which of the following are advantages of ERP systems? (Check all that apply.) ERP systems provide an integrated, enterprise-wide view of an organization's data and financial situation. Because the ERP system benefits are so great, there is little resistance to their installation. ERP systems are relatively inexpensive. Procedures and reports are standardized across business units. No answer text provided.

ERP systems provide an integrated, enterprise-wide view of an organization's data and financial situation. Procedures and reports are standardized across business units.

Which is a true statement regarding the use of the manual processing symbol in a flowchart? Each manual processing symbol should have an input and an output. If a document is moved from one column to another, show the document only in the last column. Do not connect two documents when moving from one column to another. Use a manual processing symbol to indicate a document being filed.

Each manual processing symbol should have an input and an output.

Which of the following is an example of an ERP system? Each week Emily enters all of the data into a system that automatically generates purchase orders, based on predetermined inventory reorder points. Production quotas for the coming week are also automatically generated based on customer orders. John uses a computerized information system to keep track of all the financial data generated by his business. Ken is a freelance contractor. He keeps records of all expenses and revenues on his cell phone app and the files are uploaded to the cloud on a regular basis. Jim has a system that keeps track of the cash receipts and cash disbursements of his cleaning business. At the end of each month, the system helps him prepare a monthly profit and loss statement.

Each week Emily enters all of the data into a system that automatically generates purchase orders, based on predetermined inventory reorder points. Production quotas for the coming week are also automatically generated based on customer orders.

Which of the following are objectives of the data collection activity within the general model for AIS? Efficient and relevant Efficient and objective Relevant and redundant Efficient and redundant

Efficient and relevant

Reliable

Free from error or bias; accurately represents organization events or activities

Which of the following is a benefit of implementing an ERP system at a multinational corporation? Increased productivity of employees. Standardization of procedures and reports across business units. Customer service improves as employees can quickly access data. None of them

Increased productivity of employees. Standardization of procedures and reports across business units. Customer service improves as employees can quickly access data.

Which of the following are disadvantages of ERP systems? (Check all that apply.) It can take years to select and fully implement an ERP system. The organization is less able to control access to the system. Data input must be captured or keyed multiple times as it is entered into different systems. Usually companies must adapt their processes to standardized ERP business processes. They are complex because they have to integrate many different business activities and systems.

It can take years to select and fully implement an ERP system. Usually companies must adapt their processes to standardized ERP business processes. They are complex because they have to integrate many different business activities and systems.

Which of the following is NOT a purpose of the transaction processing system? Converting economic events into financial transactions Managing and reporting on the status of financial investments Distributing essential information to operations personnel to support their daily operations Recording financial transactions in the accounting records

Managing and reporting on the status of financial investments

Which of the following is the most effective way to segregate duties in an ERP system? No one person should be responsible for recording and monitoring of organizational assets. No one person should be responsible for authorization, recording, and have custody of organizational assets. No one person should be responsible for recording, risk assessment, and control procedures. No one person should be responsible for authorization, monitoring, and risk assessment.

No one person should be responsible for authorization, recording, and have custody of organizational assets.

Which of the following is NOT a characteristic of effective information? Summarization Accuracy Relevance Precision

Precision

Understandable

Presented in a useful and intelligible format

Timely

Provided in time for decision-makers to make decisions

Relevant

Reduces uncertainty, improves decision making, or confirms or corrects prior expectations

Fabrikam makes a credit sale to Advanced Paper Company. What is the series of navigation steps you should use to record the sale?

Sales > Transactions > Sales Transaction Entry

Business Organization Pyramid

See Fig. 1

Which of the following is not an advantage of an ERP system? Standardization of procedures and reports Improved monitoring capabilities Better access control Simplicity and reduced costs

Simplicity and reduced costs

Which of the following statements is most accurate? ERP systems are commercial software packages that are sometimes called turnkey systems because they can be implemented by the user with little or no modification Substantive tests provide evidence focused on the system controls External auditors may rely on the work of internal auditors only if they report to the controller or the CEO of the client company. Both small and large firms that have standardized information needs are potential customers for commercial software

Substantive tests provide evidence focused on the system controls

Which of the following is NOT a database management task? Summarization Deletion Storage Retrieval

Summarization

What is the difference between AIS and MIS?

The distinction between AIS and MIS centers on the concept of a transaction. However, in the reality, physical information systems are not typically organized into such discrete packages. More often, MIS and AIS functions are integrated within physical systems to achieve operational efficiency.

Describe two different ways to move forward through entry boxes in a Sales Transaction Window

The primary way to move through entry boxes in a Sales Transaction Window is to use the Tab Key, or Shift-Tab if the user desires to move backward. If the user decides they do not want to use the Tab/Shift-Tab function to move through the entry boxes, they have the option to use their mouse/cursor to select the desired entry box. Computerized Accounting in the Cloud using MD GP 2016 teaches the user how to navigate Microsoft Dynamics via the Tab/Shift-Tab function, rather than the mouse/cursor.

Which of the following statements about ERP systems is (are) true? (Check all that apply.) Companies seldom hire outside help to implement ERP software. Top management's commitment to an ERP system greatly increases the chances of success. Since there are so few quality ERP systems, choosing one is an easy task. One way to choose a suitable ERP system is to select a package designed for your industry. The importance of sound internal controls in an ERP system cannot be overstated.

Top management's commitment to an ERP system greatly increases the chances of success. One way to choose a suitable ERP system is to select a package designed for your industry. The importance of sound internal controls in an ERP system cannot be overstated.

Verifiable

Two independent, knowledgeable people produce the same information

Which of the following is NOT a financial transaction? Cash receipts Purchases of products Update valid vendor file Sale of inventory

Update valid vendor file

Which of the following is least likely to be used as evidence by an external auditor? Work performed by internal auditors who report to the audit committee of the BOD Tests of controls results Work performed by internal auditors who organizationally report to the controller Substantive tests results

Work performed by internal auditors who organizationally report to the controller

In a data flow diagram of the customer payment process, "update receivables" will appear above or in a circle. a square. two horizontal lines none of the above

a circle.

Financial transactions

an economic event that affects the assets and equities of the organization, is reflected in its accounts, and is measured in monetary terms

Data sources

are financial transactions that enter the information system from either internal or external sources

External financial transactions

are the most common source of data

information

causes the user to take an action that he or she otherwise could not, or would not, have taken. Information is often defined simply as processed data, but this definition is inadequate. Information is determined by the effect it has on the user, not by its physical form. Information triggers users to take actions that support their day-to-day business tasks, resolve conflicts, and plan for the future

When preparing a flowchart, the names of organizational departments or job functions should appear in the right-hand margin written narrative accompanying the flowchart title of the flowchart column headings.

column headings.

A DFD created at the highest-level or summary view is referred to as a context diagram process diagram content diagram overview diagram

context diagram

External users

creditors, stockholders, potential investors, regulatory agencies, tax authorities, suppliers, and customers

ERP is the abbreviation for enterprise resource program enterprise reporting program. entity resource planning. enterprise resource planning.

enterprise resource planning.

Nonfinancial transactions

events that do not meet the narrow definition of a financial transaction

Data

facts, which may or may not be processed (edited, summarized, or refined) and have no direct effect on a user's actions

When viewed from the highest to most elemental level, the data hierarchy is table, record, key file, record, attribute. key, record, table record, attributes, key attribute, record, file.

file, record, attribute.

The following are subsystems of the accounting information system, EXCEPT the general ledger/financial reporting system management reporting system human resources system transaction processing system

human resources system

Internal financial transactions

involve the exchange or movement of resources within the organization.

A data flow diagram is a graphical description of the source and destination of data that shows how data flow within an organization. is a graphical description of the flow of documents and information between departments or areas of responsibility. is a graphical description of the relationship among the input, processing, and output in an information system. is a graphical description of the sequence of logical operations that a computer performs as it executes a program.

is a graphical description of the source and destination of data that shows how data flow within an organization.

physical data flow diagram

is a graphical representation of a system that shows the system's internal and external entities and the flows of data into and out of these entities

logical data flow diagram

is a graphical representation of a system that shows the system's processes (as bubbles), data stores, and the flows of data into and out of the processes and data stores

database

is its physical repository for financial and non-financial data

Default information

is the automatic entry of information into an entry box. The automatic entry is based on the default settings which were established through maintenance. The purpose of default information is to reduce the amount of time spent entering information into entry boxes.

Data collection system.

is the first operational stage in the information

Information generation

is the process of compiling, arranging, formatting, and presenting information to users.

Graphical representations of information are often supplemented by narrative descriptions. relevant e-mail communications. logic charts. oral descriptions from management.

logic charts.

Internal users

management at all levels of the organization as well as operations personnel

In a flowchart of a manual customer payment processing system, "update customer file" will be shown by a(n) ________ symbol, and "update account receivable" will be shown by a(n) ________ symbol. input; output input; manual operation manual operation; output manual operation; manual operation

manual operation; manual operation

the general ledger/financial reporting system (GL/FRS)

produces the traditional financial statements, such as the income statement, balance sheet, statement of cash flows, tax returns, and other reports required by law.

the management reporting system (MRS)

provides internal management with special-purpose financial reports and information needed for decision making such as budgets, variance reports, and responsibility reports.

In an ERP system, the module used to record data about transactions in the disbursement cycle is called purchase to pay. manufacturing. order to cash. financial

purchase to pay.

Two rules govern the design of data collection procedures:

relevance and efficiency

All of the following are guidelines for preparing data flow diagrams except sequentially number process bubbles. uniquely name all data flows. include all storage files, even if they are only temporary. show the most detail in the highest-level DFD

show the most detail in the highest-level DFD

transaction processing system (TPS)

supports daily business operations with numerous reports, documents, and messages for users throughout the organization

The Value of Information

the benefit produced by the information minus the cost of producing it

Costs of information

the time and resources spent to produce and distribute the information.

In a DFD, "bubbles" is also known as a transformation process. data store. data flow. data destination.

transformation process.

End users

two general groups: external and internal