AIS: Chapters 1-4 (Missing Questions Due to Images)

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9) What is a key decision that needs to be made with regards to acquiring equipment? A) the location B) pro forma income statement C) how much capital to acquire D) job descriptions

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

12) A data warehouse A) is primarily used for analysis rather than transaction processing. B) stores transaction processing records in hard copy. C) replaces traditional transaction processing databases. D) increases the speed of transaction processing.

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

13) The use of a data warehouse in strategic decision making is often referred to as A) business intelligence. B) managerial accounting. C) data analysis. D) analytical modeling.

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

13) What is the final step in the data processing cycle? A) output B) storage C) processing D) input

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

16) In a payroll processing DFD, the "prepare reports" activity will be represented by ________, the "employee payroll file" will be represented by ________, and the "management" will be represented by ________. A) a circle; two horizontal lines; a square B) a circle; two horizontal lines; two horizontal lines C) a rectangle; a square; a circle D) a square; two horizontal lines; a circle

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

3) In which transaction cycle would customer sales transaction information be most likely to pass between internal and external accounting information systems? A) the revenue cycle B) the expenditure cycle C) the human resources / payroll cycle D) the financing cycle

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

16) Creating an empty table in a relational database requires use of the ________, and populating that table requires the use of ________. A) DDL; DML B) DQL; SQL C) DDL; DQL D) DML; DDA

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

18) If a national sales tax were implemented, which language would be used to add a new field in the sales table to track the sales tax due? A) Data Definition Language B) Data Manipulation Language C) Data Query Language D) Data Update Language

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

2) Who of the following is not a stakeholder with whom an accounting information system typically communicates directly? A) Wall Street industry analyst B) venture capitalist C) company that supplies raw materials D) company that purchases finished goods for resale to consumers

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

5) When the sum of all entries in the subsidiary ledger equals the balance in the corresponding general ledger account, it is assumed that A) the recording processes were accurate. B) all source documents were recorded. C) adjusting entries are not required. D) no errors exist in the subsidiary ledger.

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

1) In a relational database, requiring that every record in a table have a unique identifier is called the A) entity integrity rule. B) referential integrity rule. C) unique primary key rule. D) foreign key rule.

: A Objective: Learning Objective 5 Difficulty: Easy AACSB: Analytic

7) Identify the components of an accounting information system.

: A well-designed AIS consists of people, procedures and instructions, data, software, information technology infrastructures, and internal controls and security measures. Objective: Learning Objective 5 Difficulty: Moderate AACSB: Analytic

13) How can the value of the information produced by an accounting information system be determined? What would a measurement and verification expert think about quantification and verification of such information?

: A well-designed AIS improves the efficiency and effectiveness of the value chain by improving the quality and lowering the overall cost of products or services, improving efficiency of operations, improving decision making, and enhancing the sharing of knowledge. These are the benefits of possessing and using information. Drawbacks to possessing and using such information are the costs of obtaining and maintaining such information. These costs include investments in people, processes, and computing and networking hardware and software on an ongoing basis. Costs of the information are quantifiable to some extent. However, some of the benefits of using the information involve numerous estimates and assumptions. As such, the quantification of the benefits of utilizing such information depends on the accuracy of the assumptions. Objective: Learning Objective 6 Difficulty: Difficult AACSB: Analytic

11) How can an AIS add value to the organization?

: An AIS can increase the efficiency and effectiveness of the value chain by improving the quality and lowering costs of products or services, improving efficiency of operations, improving decision making, enhancing the sharing of knowledge, improving the efficiency and effectiveness of its supply chain and improving the internal control structure. Objective: Learning Objective 6 Difficulty: Moderate AACSB: Analytic

10) The ________ contains information about the structure of the database. A) data definition language B) data dictionary C) data warehouse D) database management system

: B Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

11) To be effective, the chart of accounts must A) not use alpha-numeric characters. B) contain sufficient detail. C) utilize only one coding technique. D) begin with account 001.

: B Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

20) A ________ is an abstract representation of a database's contents. A) schema B) logical data model C) physical view D) data dictionary

: B Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

5) The logical structure of a database is described by the A) data dictionary. B) schema. C) database management system. D) context diagram.

: B Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

11) Which of the following would not be found in a data dictionary entry for a data item? A) records containing a specific data item B) physical location of the data C) source of the data item D) field type

: B Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

13) Most processes on a DFD can be identified by A) data in-flows only. B) data out-flows only. C) data flows both into or out of a process. D) always being followed by a data store.

: C Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

1) Using a file-oriented approach to data and information, data is maintained in A) a centralized database. B) many interconnected files. C) many separate files. D) a decentralized database.

: C Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

10) What is the most frequent revenue cycle transaction? A) purchase of inventory B) receipt of cash C) sale to customer D) billing

: C Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

12) Identify the item below that is not one of the four different types of data processing activities. A) creating B) reading C) using D) deleting

: C Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

15) Message left on voicemail: "Hi Nikki! Just landed at the airport. How about dinner this evening if you're available. Call me!" Which of the following characteristics of useful information is absent in the situation described above? A) relevant B) reliable C) complete D) timely E) understandable F) verifiable G) accessible

: C Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

3) The value of information can best be determined by A) its usefulness to decision makers. B) its relevance to decision makers. C) the benefits associated with obtaining the information minus the cost of producing it. D) the extent to which it optimizes the value chain.

: C Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

6) The schema that provides an organization-wide view of the entire database is known as the A) external-level schema. B) internal-level schema. C) conceptual-level schema. D) logical view of the database.

: C Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

8) A low-level view of the database that describes how the data are actually stored and accessed is the A) conceptual-level schema. B) subschema. C) internal-level schema. D) external-level schema.

: C Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

8) In which transaction cycle would information for hiring employees be most likely to pass between internal and external accounting information systems? A) the revenue cycle B) the expenditure cycle C) the human resources / payroll cycle D) the financing cycle

: C Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

9) Record layouts, definitions, addresses, and indexes will be stored at the ________ level schema. A) external B) conceptual C) internal D) meta

: C Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

16) A subsidiary ledger A) is used to record infrequent or non-routine transactions. B) simplifies the process of recording large numbers of repetitive transactions. C) records all detailed data for any general ledger account that has individual sub-accounts. D) contains summary-level data for every account of the organization.

: C Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

5) In which transaction cycle would information for paying employees be most likely to pass between internal and external accounting information systems? A) the revenue cycle B) the expenditure cycle C) the human resources / payroll cycle D) the financing cycle

: C Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

25) Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area. Antia uses computer technology to provide superior customer service. The store's database system was designed to make detailed information about each Japanese fan easily accessible to her customers. Accordingly, the fan price and condition are provided for each fan, along with many pictures of each fan. In Antia's database, the data about each Japanese fan's price is stored in a(n) A) entity. B) attribute. C) field. D) record.

: C Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

23) Cornelia Cassidy is a telecom equipment sales representative. Her company has provided her with a laptop computer that uses wireless connectivity to access the accounting information system from virtually anywhere in the country. She has access to view customer and product information. She also has access that allows her to enter and cancel customer orders. The permissions for Cornelia (and other sales reps) define a ________ in the company's database management system. A) conceptual-level schema B) data dictionary C) external-level schema D) physical view

: C Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

26) The coding technique most likely used for sales orders is A) block code. B) group code. C) sequence code. D) data code.

: C Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

4) A change in an employee's hourly pay would be recorded in A) the payroll master file. B) a payroll transaction file. C) the employee master file. D) the employee transaction file.

: C Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

3) Identify the false statement below. A) Retail stores do not have a production cycle. B) Financial institutions have installment-loan cycles. C) Every organization should implement every transaction cycle module. D) A service company does not have an inventory system.

: C Objective: Learning Objective 4 Difficulty: Easy AACSB: Analytic

6) The problem of losing desired information from a database when an unwanted record is purged from the database is referred to as the ________ anomaly. A) purge B) erase C) delete D) integrity

: C Objective: Learning Objective 4 Difficulty: Easy AACSB: Analytic

6) The transaction cycle that includes the events of hiring employees and paying them is known as the A) revenue cycle. B) expenditure cycle. C) human resources cycle. D) financing cycle.

: C Objective: Learning Objective 4 Difficulty: Easy AACSB: Analytic

19) In a well-structured relational database, A) foreign keys cannot be null. B) there must be at least two foreign keys. C) every column in a row must be single valued. D) one table must be related to all other tables.

: C Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

7) Identify one potential outcome of the delete anomaly. A) inconsistent data B) inability to add new data C) unintentional loss of data D) none of the above

: C Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

9) When displayed on a monitor, data output is referred to as A) reports. B) hard copy. C) soft copy. D) financials.

: C Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

1) ________ in a well-structured relational database. A) Every table must be related to all other tables B) One table must be related to at least one other table C) Every table must be related to at least one other table D) One table must be related to all other tables

: C Objective: Learning Objective 4 Difficulty: Moderate AACSB: Reflective Thinking

10) Kai Keoni has created custom statues made out of scrap metal for over ten years. He lives above his shop in Martha's Vineyard, Maryland. Kai is an accounting fanatic and has kept detailed records of every statue he has ever created. For every sale, he obtains the customer's name and address, a description of the statue, and a picture of the statue sold to the customer. His unique style has recently attracted the attention of several celebrities. Ready to take his business to the next level, Kai has hired you to construct an accounting information system, which he wants modeled after his paper records. As you look over his records, you realize that sometimes the same customer is recorded by a slightly different name. For example, Mike Mulligan bought a horse statue, M. Mulligan bought a pig statue, and Mike M. all seem to be the same person. This is an example of what type of problem in the existing records? A) entity integrity B) referential integrity C) update anomaly D) insert anomaly

: C Objective: Learning Objective 4 Difficulty: Moderate AACSB: Reflective Thinking

5) Identify the aspect of a well-structured database that is incorrect. A) Data is consistent. B) Redundancy is minimized and controlled. C) All data is stored in one table or relation. D) The primary key of any row in a relation cannot be null.

: C Objective: Learning Objective 5 Difficulty: Easy AACSB: Analytic

7) In an ERP system, the module used to record data about transactions in the production cycle is called A) order to cash. B) purchase to pay. C) manufacturing. D) logistics.

: C Objective: Learning Objective 5 Difficulty: Easy AACSB: Analytic

10) All of the following are advantages of an ERP system except A) in an ERP, data input is captured or keyed once. B) ERPs permit management to gain greater visibility into every area of the enterprise. C) it takes considerable experience and training to use an ERP system effectively. D) ERPs permit manufacturing plants to receive new orders in real time.

: C Objective: Learning Objective 5 Difficulty: Moderate AACSB: Analytic

2) A typical source document could be A) some type of paper document. B) a computer data entry screen. C) the company's financial statements. D) both A and B

: D Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

4) The passage of the Sarbanes Oxley Act A) made documentation skills even more important. B) requires public companies to prepare an annual internal control report. C) mandates that auditors must be able to prepare, evaluate and read documentation tools such as flowcharts. D) all of the above

: D Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

5) Which of the following is not a true statement? A) Documentation tools save an organization both time and money. B) Documentation tools are used extensively in the systems development process. C) Data flow diagrams and flowcharts are the two most frequently used systems development documentation tools. D) Data flow diagrams and flowcharts are difficult to prepare and revise using software packages.

: D Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

7) In a DFD, a "data sink" is also known as a A) data store. B) transformation process. C) data flow. D) data destination.

: D Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

13) Reports produced using the data dictionary could include all of the following except a list of A) programs where a data item is used. B) synonyms for the data items in a particular file. C) outputs where a data element is used. D) the schemas included in a database.

: D Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

4) Describe four advantages and four disadvantages of implementing an ERP system at a multinational corporation.

: Advantages Integrating information breaks down barriers between departments and streamlines the flow of information. Data input is captured or keyed only once. Management gains greater visibility into every area of the enterprise and has improved monitoring capabilities. Better access control is established by consolidating multiple permissions and security models into a single data access structure. Standardization of procedures and reports across business units. Customer service improves as employees can quickly access data. Increased productivity of employees. Disadvantages ERP systems are very costly. Implementation is time consuming. Changes to business processes are sometimes required, in order to minimize the customization needed. Complexity of the system. Employees may be resistant to implement and use an ERP system and change business processes. Objective: Learning Objective 5 Difficulty: Easy AACSB: Analytic

17) Baggins Incorporated identifies new product development and product improvement as the top corporate goals. An employee developed an innovation that will correct a shortcoming in one of the company's products. Although Baggins current Return on Investment (ROI) is 15%, the product innovation is expected to generate ROI of only 12%. As a result, the employee fails to follow up. As a result, awarding bonuses to employees based on ROI resulted in A) goal conflict. B) information overload. C) goal congruence. D) decreased value of information.

: A Objective: Learning Objective 1 Difficulty: Difficult AACSB: Analytic

7) A delivery of inventory from a vendor, with whom a credit line is already established, would be initially recorded in which type of accounting record and as part of what transaction cycle? A) purchases journal; expenditure cycle B) general journal; expenditure cycle C) general ledger; expenditure cycle D) cash disbursements journal; production cycle

: A Objective: Learning Objective 1 Difficulty: Difficult AACSB: Reflective Thinking

29) Data flow diagrams depict A) processes, but not who is performing the processes. B) processes, but not the data that flows between processes. C) who is performing processes, but not how they perform the process. D) who is performing processes, but not the data that flows between processes.

: A Objective: Learning Objective 1 Difficulty: Difficult AACSB: Reflective Thinking

48) In a data flow diagram of the vendor payment process, "Vendor" will appear above or in A) a square. B) a circle. C) two horizontal lines. D) none of the above

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

9) Identify the four parts of the transaction processing cycle. A) data input, data storage, data processing, information output B) data input, data recall, data processing, information output C) data input, data recall, data transmission, information output D) data input, data recall, data transmission, data storage

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

1) Graphical representations of information are often supplemented by A) narrative descriptions. B) relevant e-mail communications. C) logic charts. D) oral descriptions from management.

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

1) Which of the following commonly initiates the data input process? A) a business activity B) automatic batch processing C) an accounting department source document D) a trial balance query

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

11) In a data flow diagram of the customer payment process, "Customer" will appear above or in A) a square. B) a circle. C) two horizontal lines. D) none of the above

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

49) In a data flow diagram, an inverted triangle represents A) an internal control. B) document filing. C) on page connection. D) document processing.

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

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

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

7) Information that does not omit important aspects of the underlying events or activities that it measures is A) complete. B) accessible. C) relevant. D) timely.

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

8) In preparing a DFD, when data are transformed through a process, the symbol used should be A) a circle. B) an arrow. C) a square. D) two horizontal lines.

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

4) An accounting information system (AIS) processes ________ to provide users with ________. A) data; information B) data; transactions C) information; data D) data; benefits

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic 5) ________ information reduces uncertainty, improves decision makers' ability to make predictions, or confirms expectations. A) Timely B) Reliable C) Relevant D) Complete Answer: C Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

8) Information is ________ when two knowledgeable people independently produce the same information. A) verifiable B) relevant C) reliable D) complete

: A Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic 9) Data must be converted into information to be considered useful and meaningful for decision making. There are six characteristics that make information both useful and meaningful. If information is free from error or bias and accurately represents the events or activities of the organization, it is representative of the characteristic of A) relevancy. B) timeliness. C) understandability. D) reliability. Answer: D Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

28) A well-planned and drawn context data flow diagram will include how many processes? A) one B) between 5 and 7 C) between 2 and 7, but no more than 7 D) as many as are needed to accurately depict the process being documented

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

18) Which of the following tradeoffs between characteristics of useful information is least objectionable? A) incomplete information received on a timely basis B) irrelevant information received in an understandable format C) unreliable information easily accessible D) verifiable information received in unreadable format

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

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

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

26) Chas Mulligan has been hired by Yardley Security as an assistant to the internal auditor. He has been asked to document the existing accounting information system, and focus on the activities and flow of data between activities. He decides to begin with a summary description of the sources and uses of data in the organization and how they are processed by the system. The documentation tool that he should employ for this purpose is a A) data flow diagram. B) document flowchart. C) system flowchart. D) program flowchart.

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Reflective Thinking

27) A well-planned and drawn level 0 data flow diagram for the expenditure cycle would show which of the following processes? A) 1.0 Order Goods; 2.0 Receive and Store Goods; 3.0 Pay for Goods B) 1.0 Order Goods; 1.1 Receive and Store Goods; 1.2 Pay for Goods C) 0.1 Order Goods; 0.2 Receive and Store Goods; 0.3 Pay for Goods D) 0.1 Order Goods; 0.12 Receive and Store Goods; 0.13 Pay for Goods

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Reflective Thinking

4) John Pablo works in the accounting department of a multinational manufacturing company. His job includes updating accounts receivable based on sales orders and remittance advices. His responsibilities are part of the company's A) revenue cycle. B) expenditure cycle. C) financing cycle. D) production cycle.

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Reflective Thinking

6) Many small businesses choose to outsource their payroll activities to firms that specialize in providing payroll services. Dolores Yu operates a payroll processing business in Calabasas, California. When she sends bills out to her clients, her work is part of her firm's A) revenue cycle. B) expenditure cycle. C) financing cycle. D) production cycle.

: A Objective: Learning Objective 1 Difficulty: Moderate AACSB: Reflective Thinking

48) Carly Jackson is a staff auditor for KPMG. She has been asked to document the client's existing accounting information system so the engagement team can assess the client's adequacy of controls around financial reporting. She decides to begin by creating a flowchart to describe, analyze, and evaluate internal controls. What documentation tool should she use for this purpose? A) internal control flowchart B) document flowchart C) system flowchart D) dataflow diagram

: A Objective: Learning Objective 2 Difficulty: Difficult AACSB: Reflective Thinking

19) Which of the following statements about data processing methods is true? A) Online real-time processing does not store data in a temporary file. B) Batch processing cannot be used to update a master file. C) Control totals are used to verify accurate processing in both batch and online batch processing. D) Online real-time processing is only possible with source data automation.

: A Objective: Learning Objective 2 Difficulty: Difficult AACSB: Reflective Thinking

5) When preparing a document flowchart, the names of organizational departments or job functions should appear in the A) column headings. B) right-hand margin. C) written narrative accompanying the flowchart. D) title of the flowchart.

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

1) Paid time-off policies, job descriptions, and procedures manuals are examples of information needed to support key decisions in what business process? A) hire and train employees B) acquire inventory C) sell merchandise D) collect payment from customers

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

14) The data processing method used by FedEx to track packages is an example of A) real-time processing. B) batch processing. C) online batch processing. D) real-time batch processing.

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

2) Before a firm can identify the information needed to effectively manage a process, the firm must A) understand the process . B) hire programmers. C) purchase computers and/or workstations. D) obtain internet access.

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

23) What is the first step in the data processing cycle? A) input B) output C) storage D) purchasing

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

3) Data must be collected about three facets of each business activity. What are they? A) the business activity, the resources it affects, the people who participate B) the business activity, the transactions it creates, the impact on the financial statements C) the inputs, outputs and processes used D) who is involved, what was sold, how much was paid

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

5) Identify the piece of information below that is typically needed to hire and train employees. A) job descriptions B) vendor performance C) market coverage D) capacity needs

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

6) Flowchart symbols A) are divided into four categories. B) are unique to the organization creating the flowchart. C) are normally drawn using a flowcharting template. D) eliminate the need for narrative descriptions or explanations.

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

7) What is a key decision that needs to be made with regards to selling merchandise? A) which credit cards to accept B) which employees to hire C) which public accounting firm to employ D) how much capital to acquire

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

8) Documents that are sent to customers or suppliers and then sent back to the company in the course of a business transaction are known as A) turnaround documents. B) source documents. C) input documents. D) transaction documents.

: A Objective: Learning Objective 2 Difficulty: Easy AACSB: Analytic

22) Source data automation refers to A) using devices to capture transaction data in machine-readable form at the time the transaction is initiated. B) using the internet as the operating platform of an accounting information system. C) using an accounting information system to electronically bill customers. D) using an accounting information system to automate a previously manual transaction process.

: A Objective: Learning Objective 2 Difficulty: Moderate AACSB: Analytic

3) The logical view of a database system refers to A) how a user or programmer conceptually organizes and understands the data. B) how the DBMS accesses data for a certain application program. C) how and where the data are physically arranged and stored. D) how master files store data values used by more than one application program.

: A Objective: Learning Objective 2 Difficulty: Moderate AACSB: Analytic

17) Data processing includes all of the following except A) verifying subsidiary ledger balances. B) changing customer addresses. C) removing inventory items no longer offered. D) adding the name of a new vendor.

: A Objective: Learning Objective 2 Difficulty: Moderate AACSB: Reflective Thinking

2) For a retail business, a delivery of inventory, from a vendor (with whom there is an established credit relationship) would be initially recorded in which type of accounting record as part of which transaction cycle? A) purchases journal; expenditure cycle B) general journal; expenditure cycle C) general ledger; expenditure cycle D) cash disbursements journal; production cycle

: A Objective: Learning Objective 2 Difficulty: Moderate AACSB: Reflective Thinking

37) Which of the following is not true about program flowcharts? A) Program flowcharts are a high-level overview of all business processes. B) Program flowcharts document the processing logic of computer programs. C) A program flowchart will exist for every computer process symbol on a system flowchart. D) Program flowcharts increase computer programmer productivity.

: A Objective: Learning Objective 2 Difficulty: Moderate AACSB: Reflective Thinking

14) Which statement below concerning the database management system (DBMS) is false? A) The DBMS automatically creates application software for users, based on data dictionary parameters. B) The DBMS automatically maintains the data dictionary. C) Users' requests for information are transmitted to the DBMS through application software. D) The DBMS uses special languages to perform specific functions.

: A Objective: Learning Objective 3 Difficulty: Difficult AACSB: Analytic

28) Changing an employee's hourly wage rate would be recorded where? A) employee master file B) employee transaction file C) special journal D) employee update file

: A Objective: Learning Objective 3 Difficulty: Difficult AACSB: Reflective Thinking

30) Data about which of the following facets of a business activity is most likely to be recorded in a transaction file? A) business activity B) resources affected by the business activity C) people who participate in the business activity D) place the business activity occurs

: A Objective: Learning Objective 3 Difficulty: Difficult AACSB: Reflective Thinking

31) Data about all of the following facets of a business activity are most likely to be recorded in a master file except the A) business activity. B) resources affected by the business activity. C) people who participate in the business activity. D) place the business activity occurs.

: A Objective: Learning Objective 3 Difficulty: Difficult AACSB: Reflective Thinking

15) Which would not generally be considered a data dictionary output report? A) a list of cash balances in the organization's bank accounts B) a list of all programs in which a data element is used C) a list of all synonyms for the data elements in a particular file D) a list of all data elements used by a particular user

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

2) Which of the following is not usually a consideration when designing a coding system? A) government coding regulations B) standardization C) future expansion needs D) ease of reporting

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

1) One group that relies on both the adequate collection and transformation of data for decision-making purposes for an organization is A) management. B) interested outsiders. C) competitors. D) the government.

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

10) Identify the party below that is not internal to the firm. A) customer B) management C) employees D) CEO

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

12) The chart of accounts of a movie theater would probably include A) retained earnings. B) a drawing account. C) work-in-process. D) both A and C

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

12) The data dictionary usually is maintained A) automatically by the DBMS. B) by the database administrator. C) by the database programmers. D) by top management.

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

27) A specialized journal would be most likely to be used to enter A) sales transactions. B) monthly depreciation adjustments. C) annual closing entries. D) stock issuance transactions.

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

3) Which of the following statements regarding special journals is not true? A) The balances in a special journal must always reconcile to the general ledger. B) Special journals are used to record large numbers of repetitive transactions. C) Special journals are periodically summarized and posted to the general ledger. D) Special journals provide a specialized format for recording similar transactions.

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

4) The ________ handles the link between the way data are physically stored and each user's logical view of that data. A) database management software (DBMS) B) database manager C) data warehouse D) data dictionary

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

7) Pre-numbered invoices and pre-numbered purchase orders are examples of A) sequence codes. B) block codes. C) group codes. D) mnemonic codes.

: A Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

14) A general journal A) would be used to record monthly depreciation entries. B) simplifies the process of recording large numbers of repetitive transactions. C) records all detailed data for any general ledger account that has individual sub-accounts. D) contains summary-level data for every account of the organization.

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

21) In a well-designed and normalized database, which of the following attributes would be a foreign key in a cash receipts table? A) customer number B) cash receipt date C) remittance advice number D) customer check number

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

24) Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area. Antia uses computer technology to provide superior customer service. The store's database system was designed to make detailed information about each Japanese fan easily accessible to her customers. Accordingly, the fan price and condition are provided for each fan, along with many pictures of each fan. In Antia's database, the Japanese fans (as a whole) represent a(n) A) entity. B) attribute. C) field. D) record.

: A Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

5) Groups of related business activities such as the acquisition of merchandise and payment of vendors are called A) transaction cycles. B) economic cycles. C) business events. D) transactions.

: A Objective: Learning Objective 4 Difficulty: Easy AACSB: Analytic

9) Who of the following would not be involved in the revenue cycle? A) accounts payable clerk B) customer C) cashier D) credit manager

: A Objective: Learning Objective 4 Difficulty: Easy AACSB: Analytic

2) The problem of changes being incorrectly recorded in a database is known as A) an update anomaly. B) an insert anomaly. C) a delete anomaly. D) a memory anomaly.

: A Objective: Learning Objective 4 Difficulty: Easy AACSB: Analytic

2) The ________ is not a transaction cycle. A) general ledger and reporting cycle B) expenditure cycle C) revenue cycle D) human resources cycle

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

20) Which of the following is false regarding a well-structured relational database? A) A foreign key cannot be null. B) A primary key cannot be null. C) Every column in a row must be single valued. D) All nonkey attributes in a table must describe a characteristic of the object identified by the primary key.

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

7) The transaction cycle approach yields efficiencies when processing of a large number of transactions because A) a large number of transactions within a given cycle can be categorized into a relatively small number of distinct types. B) transaction cycles are easier to computerize. C) the transaction cycle approach represents the natural order of business. D) transaction cycles are easy to understand.

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

8) Paying state payroll taxes is part of which transaction cycle? A) human resources/payroll B) expenditure C) financing D) revenue

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

8) The update anomaly in non-normalized database tables A) occurs because of data redundancy. B) restricts addition of new fields or attributes. C) results in records that cannot be updated. D) is usually easily detected by users.

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

9) Identify one potential drawback in the design and implementation of database systems for accounting. A) Double-entry accounting relies on redundancy as part of the accounting process, but well-designed database systems reduce and attempt to eliminate redundancy. B) Relational DBMS query languages will allow financial reports to be prepared to cover whatever time periods managers want to examine. C) Relational DBMS provide the capability of integrating financial and operational data. D) Relational DBMS can accommodate multiple views of the same underlying data; therefore, tables storing information about assets can include data about both historical and replacement costs.

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Reflective Thinking

12) Kai Keoni has created custom statues made out of scrap metal for over ten years. He lives above his shop in Martha's Vineyard, Maryland. Kai is an accounting fanatic and has kept detailed records of every statue he has ever created. For every sale, he obtains the customer's name and address, a description of the statue, and a picture of the statue sold to the customer. His unique style has recently attracted the attention of several celebrities. Ready to take his business to the next level, Kai has hired you to construct an accounting information system, which he wants modeled after his paper records. As you look over his records, you notice that some customer last names have different first names in different records. For example, R. Framington Farnsworth, Bob Farnsworth, and Snake Farnsworth all seem to be the same person. You explain to Kai that every customer must be identified by a unique customer number in the AIS. You are referring to the A) entity integrity rule. B) referential integrity rule. C) update anomaly. D) insert anomaly.

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Reflective Thinking

5) Which statement below regarding the AIS and managerial reports is false? A) The AIS is best utilized for financial data while the management information system is best utilized for operational data. B) The AIS must be able to provide managers with detailed operational information about the organization's performance. C) Both financial and nonfinancial data are required for proper and complete evaluation of organizational performance. D) Most source documents capture both financial and nonfinancial data about business transactions.

: A Objective: Learning Objective 4 Difficulty: Moderate AACSB: Reflective Thinking

22) Suppose a relational database contained two linked tables. Assuming the organization wants the database to be normalized, which of the following items represents a problem to normalization? A) The database contains only one primary key. B) The database contains two foreign keys. C) The database contains two primary keys. D) The database contains only one foreign key.

: A Objective: Learning Objective 5 Difficulty: Difficult AACSB: Analytic

12) All of the following are ERP vendors except A) Dell. B) SAP. C) Oracle. D) Microsoft.

: A Objective: Learning Objective 5 Difficulty: Difficult AACSB: Analytic

4) Identify the statement below that is false with regards to basic requirements of a relational database model. A) Primary keys can be null. B) Foreign keys, if not null, must have values that correspond to the value of a primary key in another table. C) All non-key attributes in a table should describe a characteristic about the object identified by the primary key. D) Every column in a row must be single-valued.

: A Objective: Learning Objective 5 Difficulty: Easy AACSB: Analytic

5) ERP stands for A) enterprise resource planning. B) enterprise resource program. C) enterprise reporting program. D) none of the above

: A Objective: Learning Objective 5 Difficulty: Easy AACSB: Analytic

2) In an ERP system, the module used to record data about transactions in the revenue cycle is called A) order to cash. B) purchase to pay. C) financial. D) customer relationship management.

: A Objective: Learning Objective 5 Difficulty: Moderate AACSB: Analytic

5) Many modern accounting software packages offer separate transaction cycle modules. What is the reason for this? A) Every organization does not need to implement all of the available transaction cycle modules. B) Most businesses do not need the revenue cycle module as part of their AIS. C) The nature of a given transaction cycle is the same irrespective of the type of organization. D) A properly designed AIS does not use the concept of separate business transaction cycles to process transactions.

: A Objective: Learning Objective 5 Difficulty: Moderate AACSB: Analytic

9) All of the following are disadvantages of an ERP system except A) an ERP provides an integrated view of the organization's data. B) ERP software and hardware can cost midsized companies between $10 million and $20 million dollars. C) ERPs frequently cause organizations to change their business processes to standardized ones. D) ERPs are relatively complex.

: A Objective: Learning Objective 5 Difficulty: Moderate AACSB: Analytic

12) Kekoa Konani is chairman of the Chatty Chihuahua Club, where he maintains a database of registered purebred Chihuahuas and their breeding history. One table will store the name, birth date, and other characteristics of all of the registered Chihuahuas. Each Chihuahua is uniquely identified by a registration number. A second table will contain data that link each Chihuahua to its male and female parents by means of their registration numbers. The entities described by the first table are A) marmosets. B) parental relationships. C) registration numbers. D) names.

: A Objective: Learning Objective 5 Difficulty: Moderate AACSB: Reflective Thinking

13) An ERP system might facilitate the purchase of direct materials by all of the following except A) selecting the best supplier by comparing bids. B) preparing a purchase order when inventory falls to reorder point. C) routing a purchase order to a purchasing agent for approval. D) communicating a purchase order to a supplier.

: A Objective: Learning Objective 5 Difficulty: Moderate AACSB: Reflective Thinking

8) Which of the following is not an example of how an AIS adds value to an organization? A) All employees at a hospital can access and update patient records from any computer terminal in the hospital. B) A customer service representative can find a customer's account data, purchase history, payment history, and salesperson's name while on the phone with the customer, to resolve issues quickly. C) Suppliers are able to access sales data directly from the point-of-sale system of a retailer and deliver inventory automatically when needed. D) Client tax files are encrypted and made available on the CPA firm's network to any employee with an access code.

: A Objective: Learning Objective 6 Difficulty: Difficult AACSB: Analytic

7) A well-designed AIS can improve the decision making in an organization. Identify the statement below that describes a situation where an AIS may actually inhibit effective decision making. A) An AIS provides to its users an abundance of information without any filtering or condensing of such information. B) An AIS identifies situations requiring management action. C) An AIS reduces uncertainty, and therefore accounting information can provide a basis for choosing among alternative courses of action. D) An AIS provides information about the results of previous decisions which provides decision makers with feedback that can be used in future decision making.

: A Objective: Learning Objective 6 Difficulty: Easy AACSB: Analytic

4) A good example of how an AIS is used to share knowledge within an organization is A) the use of a corporate database to help staff identify the relevant experts who can help with a particular client. B) the use of tablets to access a network for messaging worldwide. C) the monitoring of production equipment to watch for defects. D) the use of point-of-sale data to determine hot-selling items.

: A Objective: Learning Objective 6 Difficulty: Moderate AACSB: Analytic

3) Which of the following is a true statement? A) Business strategy directly influences AIS, but not information technology. B) Information technology directly influences organizational culture, but not business strategy. C) Organizational culture directly influences business strategy, but not AIS. D) AIS directly influences information technology, but not business strategy.

: A Objective: Learning Objective 7 Difficulty: Difficult AACSB: Analytic

1) A change in the AIS that makes information more easily accessible and widely available within an organization is most likely to first influence the A) organizational culture. B) customer base. C) external financial statement users. D) production activity.

: A Objective: Learning Objective 7 Difficulty: Easy AACSB: Analytic

7) Identify how firms use predictive analysis. A) to provide an educated guess regarding what is expected to occur in the near future B) to engage in data warehousing C) to engage in a low-cost strategy D) to design the most effective accounting information system

: A Objective: Learning Objective 7 Difficulty: Moderate AACSB: Analytic

1) The process of creating value for customers is the result of nine activities that form a A) value chain. B) capitalist operation. C) profitable business. D) information system.

: A Objective: Learning Objective 8 Difficulty: Easy AACSB: Analytic

2) The value chain concept is composed of two types of activities known as A) primary and support. B) primary and secondary. C) support and value. D) technology and support.

: A Objective: Learning Objective 8 Difficulty: Moderate AACSB: Analytic

7) Clemente Santiago has formed a business that sells carved gourmet coconuts. He has hired five employees. The most senior is Friday, who manages the carving process. Monday is the newest employee. She collects the coconuts. Tuesday takes calls from unhappy customers. Wednesday tosses finished coconuts into the sea, sending them to the wholesaler. Thursday sends smoke signals to the wholesaler extolling the virtues of the latest production run of nuts that are drifting across the bay. Which of the following functions in the value chain is Monday performing? A) Inbound logistics B) Operations C) Outbound logistics D) Marketing and sales E) Service

: A Objective: Learning Objective 8 Difficulty: Moderate AACSB: Analytic

26) Discuss the ways in which a well-designed DBMS will facilitate the three basic functions of creating, changing, and querying data.

: A DBMS will use data definition, data manipulation, and data query languages in order to perform the three basic, essential data functions. Data definition is achieved using DDL (data definition language); data manipulation is achieved using DML (data manipulation language) which includes operations such as updating, inserting, and deleting portions of the database. DQL (data query language) is used to retrieve, sort, order, and present subsets of data in response to user queries. A DBMS will probably also include a report writer, which is a language that simplifies report creation. Objective: Learning Objective 3 Difficulty: Moderate AACSB: Analytic

25) Describe a data dictionary.

: A data dictionary is a means by which information about the structure of a database is maintained. For each data element stored in the database, there is a corresponding record in the data dictionary that describes it. The DBMS usually maintains the data dictionary. Inputs to the dictionary include various new data, changed data, and deleted data. Output from the data dictionary may include a variety of reports useful to programmers, database designers, and other users of the information system. Accountants have a very good understanding of the data elements that exist in a business organization, so when an organization is developing a database, accountants should be allowed to participate in the development of the data dictionary. Objective: Learning Objective 3 Difficulty: Easy AACSB: Analytic

39) Discuss the idea of a data flow.

: A data flow is a graphic representation of the flow of data between processes, data stores, and data sources and destinations. A data flow is really a form of communication. When the analyst draws a curved or straight line with an arrow at one end, what is represented is a form of communication among the other elements of the data flow process. Consider for example a data source being depicted by a box. The box represents a data source. Data then is sent from the source to a circle, which represents a transformation process. The source of data sends the flow to the transformation process, which will process the data and somehow use the data or turn it into useful information. Note that data flows can represent one or more pieces of datum. Because data flows may have more than one data element, the analyst must determine whether to show one or more lines. Good DFDs and data flow lines in such diagrams eliminate the need for users and analysts to "infer" what type of information is flowing. Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

35) Describe a situation in which data flow should be shown with two data flow lines instead of one.

: A data flow may consist of one or more pieces of datum. The determining factor is whether the data elements always flow together at the same time. For example, "customer payment" have both payment and remittance data. Since these elements always flow together, only one data flow line is required. However, data flows between the customer and the payment processes have customer inquiries and cash receipts; these data items do not always flow together at the same time. In such a case, two data flow lines will be shown. Objective: Learning Objective 1 Difficulty: Moderate AACSB: Reflective Thinking

16) Explain the relational database data model.

: A data model is an abstract representation of the contents of a database. The majority of new DMBS use what is called the relational data model, developed by Dr. E. F. Codd in 1970. Using this model, everything in the database is stored in the form of tables, known as relations. Keep in mind that this is the conceptual- and external-level schemas (which describes the logical structure of a database), not the actual physical structure of the database itself. In the concept of relations, both rows and columns comprise the database tables. Each row in a relation (table) is called a tuple. Tuples contain data about a specific occurrence of the type of entity represented by that table. For example, in a sales table, each tuple may contain all of the information about a specific customer. Each column in a relation contains information about one specific attribute of that entity. Using the sales example again, the columns in such a table may represent specific characteristics about each sales transaction. Objective: Learning Objective 4 Difficulty: Moderate AACSB: Analytic

24) Describe the different schemas involved in a database structure. What is the role of accountants in development of schemas?

: A schema describes the logical structure of a database. There are three levels of schemas. First, the conceptual-level schema is an organization-wide view of the entire database listing all data elements and relationships between them. Second, an external-level schema is a set of individual user views of portions of the database, each of which is referred to as a subschema. Finally, an internal-level schema provides a low-level view of the database includes descriptions about pointers, indexes, record lengths, etc. Accountants are primarily involved in the development of conceptual- and external-level schemas; however, database knowledgeable accountants may participate in developing an internal -level schema. Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

20) Define the concept of a system.

: A system is a set of two or more components that are somehow interrelated and interact together to achieve a specific goal. Objective: Learning Objective 1 Difficulty: Easy AACSB: Analytic

24) Discuss the concept of a system and the issues of goal conflict and goal congruence.

: A system is a set of two or more components that are somehow interrelated and interact together to achieve a specific goal. A system usually consists of smaller components called subsystems. These subsystems have specific and defined functions, which interact with and support the larger system. The concept of systems is key to information technology and AIS. All systems, including the AIS, must work to achieve one or more organizational goals. Goal conflict results when a decision or action of a subsystem is inconsistent with another subsystem or the system (organization) as a whole. Goal congruence results when a subsystem achieves its goals while contributing to the organization's overall goal. Subsystems should maximize organizational goals. Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

8) Explain what an AIS is, describe the basic tasks it performs in an organization, and give some examples of the types of accounting transactions it processes.

: An AIS consists of six components: people, procedures and instructions, data, software, information technology infrastructures, and internal controls and security measures. The AIS performs three major functions: 1) it collects and stores data about activities and transactions so that the organization's management, employees, and interested outsiders can review what has happened; 2) the AIS processes data (that is, facts that have been collected and stored) into information that is useful for making decisions, and is of value to the organization; and 3) the AIS provides adequate controls designed to safeguard the organization's assets, including its data and information. Common examples of accounting transactions that an AIS helps to process and track are the sales of products to customers, cash collections, cash payments, and the recording and payment of the employees' payroll. Objective: Learning Objective 5 Difficulty: Moderate AACSB: Analytic

6) Define an accounting information system.

: An AIS is a system that collects, records, stores, and processes data to produce information for decision makers. Objective: Learning Objective 5 Difficulty: Easy AACSB: Analytic

32) Describe an audit trail.

: An audit trail provides a means to check the accuracy and validity of postings to the ledger. The posting references and document numbers help provide the audit trail. An audit trail exists when company transactions can be traced through the AIS from where it originated to where they end up on the financial statements Objective: Learning Objective 3 Difficulty: Moderate AACSB: Reflective Thinking

10) Describe what you think will be the main impact of database technology in your career.

: Answers to this question could cover a wide range. Most likely the following items will be discussed or mentioned: — the probable demise of the double-entry system as the need for such redundancy is much less in a database system. — financial reporting may become more of accessing a database of corporate data in the format desired by the user than relying on financial reports prepared by accountants. — accountants will no longer need to be the filter for accounting data as users will be able to do this themselves, thus the accountants may become more decision makers and managers. — the whole notion of internal controls will become more important in the future if the accountants' role changes in relation to financial reporting. Objective: Learning Objective 1 Difficulty: Difficult AACSB: Reflective Thinking

32) Discuss the ways in which information professionals interact with documentation tools and the various levels of understanding necessary.

: At a minimum, a professional should be able to read documentation. A professional may also be called upon to evaluate internal control system documentation in order to identify control strengths and weaknesses or recommend improvements. A professional may be engaged to prepare documentation, which requires the greatest amount of skill and understanding of a particular system. Objective: Learning Objective 1 Difficulty: Moderate AACSB: Analytic

9) In general, a data destination will be shown by A) an arrow pointing away. B) an arrow pointing in. C) arrows pointing both ways. D) no arrows, only two horizontal lines.