AIS Chapter 2

there are two types of computers networked together to accomplish the application processing. The server is usually a large computer that contains the database and many of the applications while the client computers, usually personal computers, are networked into the server.

client server computing

model for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.

cloud computing

12. The advantages to real-time processing include: a) As the data are entered, the system checks for input errors - therefore, errors can be corrected immediately. b) Information is provided to users on a timely basis. c) All files are constantly up-to-date. d) All of the above are advantages.

d) All of the above are advantages.

11. There are a number of advantages to cloud computing. Which of the following is one of those advantages? a) As a company grows, it can easily purchase new capacity from the cloud provider. b) Once the software and data are stored in the cloud, it can be accessed by multiple devices from multiple locations. c) The company has a reduced need for servers and data storage. d) All of the above.

d) All of the above.

10. Which of the following is not an advantage to cloud computing: a) Scalability b) Expanded Access c) Cost Savings d) Security

d) Security

access is provided to databases without the need for setting up physical hardware or installing software.

database as a service (DaaS)

provides details for the entire set of accounts used in the organization's accounting system. Transactions or transaction summaries are posted to the general ledger from the general journal and special journals

general ledger

The place of original entry for any transactions that are not recorded in special journals. The general journal is used to record non-routine transactions and adjusting and closing entries.

gerenal journal

an existing system in operation within an organization. A legacy system uses older technology in which the organization has a considerable investment and that might be entrenched in the organization.

legacy systems

advantages to cloud computing

scalability-the capability of a system, network, or process to handle a growing amount of work, or its potential to be enlarged to accommodate growth. If we have a large amount of business volume we can scale up capacity purchased from a cloud provider. expanded access- Once the software and data are stored in the cloud, it can be accessed by multiple devices from many different locations. infrastructure is reduced cost savings

adds modern, user friendly screen interfaces to legacy system.

screen scrapers

ways to enhance legacy system

screen scrapers enterprise application integration

Method of software delivery that allows data to be accessed from any device with an Internet connect. The software companies maintain servers.

software as a service (SaaS)

is a record that captures the key data of a transaction. The source document provides (1) Input data necessary for the accounting system (i.e. and invoice from customers) (2) Triggers business processes to begin (I.e., a received purchase order starts the process of fulfilling the order), (3) Serves are part of the audit trail.

source document

are established to record specific types of transactions.

special journal

maintain detailed information regarding routine transactions, with an account established for each entity.

subsidiary ledger

an output of the accounting system that can be used as an input in a different part of the accounting system.

turnaround document

Flow of Transactions to Reporting

-Capture transactions data on source document -journalize transactions -post transactions to the general ledger -prepare trail balance -journalize and post adjusting entries -prepare adjusted trial balance -prepare financial statements -journalize post closing entries -prepare post closing trial balance

4. The system that captures, records, processes, and reports accounting information is referred to as a(n): A. Accounting information system B. Management information system. C. System of business processes. D. Client-server system.

A. Accounting information system

16. A set of processes, software and hardware tools, methodologies, and technologies to integrate software systems is referred to as: A. Enterprise application integration B. Client-server interface C. Screen scrapers D. Complete integration

A. Enterprise application integration

10. Which of the following provides details for the entire set of accounts used in the organization's accounting systems? A. General Ledger B. Special Journal C. Subsidiary Ledger D. General Journal

A. General Ledger

12. Which of the following statements does not refer to a legacy system? A. Includes source documents, journals, and ledgers. B. Have been in place for many years. C. Much time has been spent developing, maintaining, and customizing the system. D. Often based on old or inadequate technology.

A. Includes source documents, journals, and ledgers.

14. Which of the following is not one of the advantages of maintaining the legacy systems? A. Legacy systems are inexpensive to maintain. B. The system contains invaluable historical data that may be difficult to integrate into a new system. C. The system is well supported and understood by existing personnel who are already trained to use the system. D. The system has been customized to meet specific needs of the organization.

A. Legacy systems are inexpensive to maintain.

18. In the context of cloud computing, what does scalability mean for a growing company? A. Scalability allows a growing company to purchase new capacity incrementally from a cloud provider. B. Scalability allows a growing company to offer its online services to a greater number of consumers at once. C. Scalability allows a growing company to purchase more hardware to improve its cloud network D. Scalability allows a growing company to gain the greatest return on capital of online investments.

A. Scalability allows a growing company to purchase new capacity incrementally from a cloud provider.

8. Which of the following is one of the advantages of maintaining a legacy system? A. The system often supports unique business processes not inherent in generic accounting software. B. The system is complicated and takes time to learn and understand C. The system focuses on source documents, journals, and ledgers. D. The system is cheap to maintain.

A. The system often supports unique business processes not inherent in generic accounting software.

13. Organizations are often reluctant to abandon their legacy systems because: A. The system was customized to meet specific needs. B. The process to replace the systems is inexpensive. C. The time involved for replacement is minimal. D. Information contained on the system is outdated.

A. The system was customized to meet specific needs.

advantages to real-time processing

As data are entered in real time, the system checks for input errors and errors can be addressed immediately. Information is provided to users on a timely basis, without the time lag inherent in batch systems. Since all data are in a database system all files are updated constantly A single system can be achieved as business processes are integrated into a single system.

5. Which of the following statements is true? A. All accounting systems in use today are computerized systems. B. All accounting systems, whether computerized or not, must capture data, process the data, and provide outputs C. It is not necessary for an accounting system to maintain summary information if it maintains detail information. D. The general ledger will be summarized and then posted to the subsidiary ledger.

B. All accounting systems, whether computerized or not, must capture data, process the data, and provide outputs

17. All of the following are disadvantages to a cloud-based system except: A. Fewer manual controls over reporting transactions B. Fewer IT employees would be needed to maintain the system C. Increased risk of fraudulent activities D. The system relies heavily on the functionality of the host server

B. Fewer IT employees would be needed to maintain the system

7. Chapter 2 discusses the different approaches that can be used to enhance existing legacy systems. Which approach intends to consolidate, connect, and organize all of the computer applications, data, and business processes (both legacy and new) into a seamlessly interfaced framework of system components? A. Screen scrapers B. Legacy replacement integration C. Enterprise application integration D. Resource management integration

C. Enterprise application integration

11. The book of original entry for any transaction not recorded in a special journal is the: A. Special Ledger B. General Ledger C. General Journal D. Subsidiary Journal

C. General Journal

2. Which of the following is not an advantage of cloud computing when compared to client-server computing? A. It is more scalable. B. It is less costly. C. It increases the amount of computer infrastructure in a company. D. It has expanded availability.

C. It increases the amount of computer infrastructure in a company.

20. The disadvantages to real-time processing include: A. Processing can take longer than normal if the master files are large. B. Adding or deleting records takes a considerable amount of time. C. The single database that is shared is more susceptible to unauthorized access. D. Data duplication is likely because each process uses its own master file.

C. The single database that is shared is more susceptible to unauthorized access.

disadvantages to legacy system

Can be costly to maintain in both time and dollars Often lack adequate, up-to-date supporting documentation May not run well with new hardware and old parts and maintenance can be hard to find Not always based on user-friendly interfaces Software is written in older computer languages that few programmers understand Can be difficult to modified to make them web based Difficult to integrate when companies merge and acquire other companies.

21. The advantages to real-time processing include: A. As the data are entered, the system checks for input errors - therefore, errors can be corrected immediately. B. Information is provided to users on a timely basis. C. All files are constantly up-to-date. D. All of the above are advantages.

D. All of the above are advantages.

9. Which of the following is an example of a source document? A. Purchase order B. Employee time card C. Cash receipts D. All of the above are examples of source documents.

D. All of the above are examples of source documents.

3. Which of the following statements is false? A. Technology has allowed many industries to provide better, faster, and higher quality information. B. Business process must adapt to the new technologies. C. Business processes, IT systems, and the accounting information system are inextricably linked. D. IT systems have not had a major impact on the input of data into the accounting information system.

D. IT systems have not had a major impact on the input of data into the accounting information system.

15. Frontware, which adds modern, user friendly screen interfaces to legacy systems are referred to as: A. Turnaround software B. Graphical user face C. COBOL D. Screen scrapers

D. Screen scrapers

6. The record that captures the key data of a transaction is called: A. Turnaround document B. Ledger C. Journal D. Source document

D. Source document

set of processes, software and hardware tools, methodologies and technologies to integrate software systems.

Enterprise Application Integration (EAI)

models for accessing, monitoring, and managing remote datacenter infrastructures through a 3rd party provider.

Infrastructure as a Service (IaaS)

advantages to batch processing

It is very efficient for large volumes of like transactions where most items in a master file are used during each processing run. The basic accounting audit trail is maintained because there are well defined beginning and ending periods and a set of continuous documents to reconcile to the batch being processed Such systems generally use less costly hardware and software than other methods The hardware and software are not as complicated as online systems and therefore can be easier to understand. It is generally easier to control than other types of computerized systems. Batch totals can be used to ensure the batch was processed correctly.

A system that requires inputs to be entered into the accounting information system by individuals not systems. An entirely manual system would require the use of source documents.

Manual Systems

transactions are processed one at a time and sent to a queue and processing of these records is done through the Internet.

Online processing

a third-party provides specific hardware and software tools that an organization might need for an application. The organization then takes the "base" package and customizes the application to fit it's business needs.

Platform as a Service (PaaS

9. Which of the following is a disadvantage of purchased accounting software, compared with software developed in-house? a) Less customized designed software. b) It is less costly. c) The implementation time is shorter. d) There are fewer bugs.

a) Less customized designed software.

13. A method of using hardware and software that captures retail sales transactions by standard bar coding is referred to as: a) Point of Sale System b) COBOL System c) Inventory Tracking System d) Retail Scanning System

a) Point of Sale System

5. A source document serves important functions in the accounting system. Which of the following is not one of those functions? a) Provides the output data for financial reports b) Serves as part of the permanent audit trail c) Triggers beginning of business processes d) Provides the input data to record the transaction

a) Provides the output data for financial reports

3. Which of the following correctly states the order of steps in a manual accounting system? a) Source Documents, Journals, Ledgers, Reports b) Journals, Source Documents, Ledgers, Reports c) Source Documents, Ledgers, Journals, Reports d) Ledgers, Reports, Journals, Source Documents

a) Source Documents, Journals, Ledgers, Reports

22. There are a number of advantages to cloud computing. Which of the following is one of those advantages? A. As a company grows, it can easily purchase new capacity from the cloud provider. B. Once the software and data are stored in the cloud, it can be accessed by multiple devices from multiple locations. C. The company has a reduced need for servers and data storage. D. All of the above.

all of the above

7. An existing system within the organization that uses older technology is called a(n): a) Cloud Computing System b) Legacy system c) Client-server system d) Modern integrated system

b) Legacy system

8. A company that wishes to buy cloud computing services enters into an agreement with a cloud computing provider. This agreement is called a: a) Cloud Computing Contract (CCC) b) Service Level Agreement (SLA) c) Agency Contract for Corporations (ACC) d) Cloud Provider Agreement (CPA)

b) Service Level Agreement (SLA)

15. An organization that has applications having large volumes of similar transactions that can be processed at regular intervals is best suited to use which method of processing? a) Real-time processing b) Point of sale processing c) Batch processing d) Sequential processing

c) Batch processing

6. When similar transactions are group together for a specified time for processing, it is called a) Online processing b) Real-time processing c) Batch processing d) Group processing

c) Batch processing

14. ___________ is the approach of pairing new technology to existing legacy technology by adding modern, user friendly screen interfaces. a) Electronic Data Interchange b) Electronic Invoice Presentment and Payment c) Screen Scrapers d) Cloud Application Analysis

c) Screen Scrapers

4. The choice of accounting information system will depend on all of the following except: a) The size of the organization b) The philosophy of management c) The ability of the company to capture information d) The nature of its processes

c) The ability of the company to capture information

1. IT systems have dramatically affected many aspects of business. Which of the following is not one of the changes? a) Data input into accounting information systems. b) The way that data is processed in the system. c) The accounting information that is reported by the system. d) The outputs of the system.

c) The accounting information that is reported by the system.

2. When a transaction occurs there are systematic and defined steps that take place within the organization to complete all of the underlying tasks. These "defined steps" are referred to as: a) Business Processes b) Financial Transactions c) Accounting Information Systems d) Customer Service Arenas

a) Business Processes

19. Which of the following statements, regarding ethical considerations in an accounting information system is false? A. The accounting information system is often the tool used to either commit or cover up unethical behavior. B. If there is only one person within the organization with responsibility for maintaining the computer systems, it is not difficult to detect instances of computer fraud. C. Fraud could be perpetrated and go undetected for a long time if the accounting information system is not carefully monitored. D. If accountants are well informed about the risks of unethical behavior, they will be better prepared to control those risks.

B. If there is only one person within the organization with responsibility for maintaining the computer systems, it is not difficult to detect instances of computer fraud.

1. Which of the following is not a disadvantage of maintaining legacy systems? A. There are fewer programmers available to support and maintain legacy systems. B. They contain invaluable historical data that may be difficult to integrate into newer systems. C. Hardware or hardware parts may be unavailable for legacy systems. D. It can be difficult to integrate various legacy systems into an integrated whole.

B. They contain invaluable historical data that may be difficult to integrate into newer systems.

requires that all similar transactions are grouped together for a specified time, and then this group of transactions is processed together as a batch.

Batch processing

disadvantages of batch processing

Processing can take longer than normal if the master files are large and not all records in the master file are used. Maybe we are running only a few customer records but since we are using the master file with all customer records our output might be delayed. In legacy systems with older hardware, adding or deleting records takes much computer maintenance time due to the sequential structure of the files Each batch uses its own separate file which causes data duplication. Integration across business processes is difficult in batch-oriented systems. There will also be a time lag which means files might never actually be real-time. If batch and master files need to be ordered in sequential order, we have less flexibility in record storage and retrieval.

transactions are processed one at a time and immediately available.

Real-Time Processing

is a contract between a service provider and an end user. The SLA provides details as to pricing, delivery, returns, etc.

Service Level Agreement (SLA)

disadvantages to real-time processing

The hardware and software are more expensive A single database that is shared is more susceptible to unauthorized access of data, unless extensive controls are in place Real-time systems can be difficult to audit because of the complexity of the system.

advantages to legacy system

They are customized to meet the specific needs of the organization Support unique business processes not available in standard accounting software Contain valuable historical data that would be difficult to integrate into the system Are well supported by existing personnel who already understand how the system works