AIS Exam 1

Evaluated Receipt Settlement reduces the threat of: A. Accepting unordered items B. Errors in supplier invoices C. Theft of inventory D. Mistakes in posting to accounts payable

B

Which of the following is an example of a turnaround doc A. A company's financial statements B. Purchase orders C. Utility bill D. Employee earnings record

C

Which of the following are threats in the cash collections process? (Check all that apply.) A. Billing errors B. Theft of cash C. Theft of inventory D. Cash flow problems

D

A graphical description of data sources, data flows, transformation processes, data storage, and data destinations is called A. a data flow diagram. B. a business process diagram. C. a flowchart. D. a context diagram.

A

Joey Smith has been the controller of Nadia Cake for the past 5 years. The owners of Nadia have recently decided to expand their operation and are in the process of obtaining a loan from a local bank. In order to be qualified for the loan, the bank asks Nadia to conduct an audit of the financial records. The auditors have been unable to obtain Nadia's financial statements that were prepared by Joey. While there is no evidence of wrongdoing, the auditors are not able to complete the audit. Which of the following characteristics of useful information is absent in the situation described above? A. Accessible B. Complete C. Verifiable D. Reliable

A

Requiring the use of digital signatures on an electronic order by a customer is a control that is designed to reduce the risk of which threat? A.Invalid orders B.Incomplete or inaccurate orders C.Stockouts D.Loss of customers

A

Sending the receiving report to the inventory control department first, before it is then sent on to accounts payable, is a control procedure designed to minimize the risks of which threats? A. Paying for items not received B. Theft of cash C. Cash flow problems D. Duplicate payments

A

Shipping newly manufactured phones to retailers and customers is an example of which type of primary activity? A. Outbound logistics B. Operations C. Marketing D. Service

A

Which of the following is an example of an ERP system? A. 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. B. John uses a computerized information system to keep track of all the financial data generated by his business. C. 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. D. 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.

A

Which of the following is not a guideline when preparing a data flow diagram? A. Do not ignore any aspects of the system B. Subdivide the DFD C. Give each process a sequential number D. Group transformation processes

A

Which of the following is the best way to protect the organization's bank account information when receiving payments from customers? A. Obtain and use a UPIC B. Obtain and use RFID C. Obtain and use FEDI D. Obtain and use EFT E. Encryption

A

Which of the following is the most common source doc in the expenditure cycle? A. Purchase order B. Remittance advice C. Bill of lading D. Credit memo

A

Which of the following specifies when to reorder supplies and inventory? A. Reorder point B. EOQ formula C. Purchase requisition D. Purchase order

A

With the advent of cryptocurrencies, a new technology is changing the way financial and many other types of transactions are recorded, processed, and stored. This technology is called: A. Blockchain B. Transactionchain C. Cryptochain D. Cyclechain

A

Restricting access to master data reduces the risk of which threat(s)? (Check all that apply.) A. Inaccurate or invalid master data B. Unauthorized disclosure of sensitive information C. Loss or destruction of data D. Poor performance

A, B

The external entity from whom an organization purchases inventory and raw materials is called a _____ . (Check all that apply.) A. supplier B. vendor C. distributor D. common carrier

A, B

Which of the following are data flow diagram preparation guidelines? (Check all that apply.) A. All data flows should come from, and go to, a transformation process, a data store, a source, or destination. B. Processes and data stores typically take their names from the data inflows or outflows. C. Data flows can only move in one direction. D. In a DFD, you should always show how the system starts and stops.

A, B

Which of the following are data flow diagram preparation guidelines? (Check all that apply.) A. Give each process a sequential number to help readers navigate among the DFD levels B. Include all relevant data elements so that they are considered during the system development C. All transformation processes should have one or more incoming data flows, but may not have an outgoing data flow D. Include all error paths, no matter how unimportant they may seem

A, B

Which of the following are flowchart preparation guidelines? (Check all that apply.) A. Develop an understanding of the system using tools, such as interviews or questionnaires, or by walking through the system transactions. B. In documents flowcharts, divide the flowchart into columns with labels, clearly label all symbols, and use arrowheads on all the flow lines. C. There is no need to identify departments, job functions, or external parties on the flowchart. D. Design the flowchart so that data flow from bottom to top and from right to left. E. It is usually not necessary to show procedures and processes in the order they take place.

A, B

Which documents are used to create a three-way match when approving the payment of a supplier invoice? (Check all that apply.) A. Receiving report B. Credit memo C. Purchase order D. Supplier invoice

A, C, D

A BPD for the revenue cycle will include which of the following? A. Description of all the major functions performed within all cycles within an organization B. Description of all selling functions within an organization C. Description of all purchasing functions performed within an organization D. Description of all human resource and payroll functions within an organization

B

A BPD provides users a ________ of the different steps or activities in a business process. A. data flow B. visual view C. decision tree D. narrative

B

A ______ is a pictorial, analytical technique used to describe some aspect of an information system in a clear, concise, and logical manner. A. context flow diagram B. flowchart C. narrative D. BFD

B

A set of related activities that help accomplish a specific organizational goal is called a(n): A. Transaction B. Business process C. Key decision D. Information need

B

In which business cycle are goods shipped to a customer? A. Expenditure cycle B. Revenue cycle C. Production cycle D. Payroll cycle

B

In which transaction cycle would information for generating customer orders be most likely to pass between internal and external accounting information systems? A. The expenditure cycle. B. The revenue cycle. C. The HR/payroll cycle. D. The financing cycle.

B

Once business activity data have been entered into the system, they must be processed to keep the databases current. Which of the following are not one of the four different types of data processing activities? A. Deleting data records no longer needed B. Controlling access to the data records C. Reading, retrieving, or viewing existing data D. Updating previously stored data E. Creating new data records

B

Receiving and storing inventory is an activity in which transaction cycle? A. Production B. Expenditure C. Revenue D. Financing

B

The value of information can best be determined by A. the time it takes to help decision makers make their decisions. B. the benefit provided by information less the cost of producing it. C. the usefulness provided to decision makers. D. the relevance provided to decision makers.

B

Which document is sent to a supplier when an organization wants to buy something? A. Sales order B. Purchase order C. Purchase requisition D. Sales invoice

B

Which document is sent to suppliers in order to acquire inventory? A. Purchase requisition B. Purchase order C. Packing slip D. Receiving report

B

Which document is used to record the items and quantities ordered by a customer? A. Packing slip B. Sales order C. Remittance advice D. Bill of lading

B

Which of the following controls could be used to mitigate the threat of accepting unordered items? A.Supplier audits B.Requiring existence of approved purchase order prior to accepting any delivery C.Use of bar codes and RFID tags D.Configuration of the ERP system to flag discrepancies between received and ordered quantities that exceed tolerance threshold for investigation

B

Which of the following controls is designed to reduce the risk of errors in counting inventory delivered by suppliers? A. Periodic physical counts of inventory and reconciliation to of the counts with recorded quantities in the system B. Not informing receiving employees about the expected quantities C. Requiring the existence of approved purchase orders prior to accepting any delivery D. All three controls are designed to reduce the risk of errors in counting inventory.

B

Which of the following controls is the best way to reduce the threat of loss or destruction of revenue cycle data? A. Managerial reports B. Backup and disaster recovery procedures C. Encryption D. Access controls

B

Which of the following is a threat to the shipping process? A. Stockouts or excess inventory B. Picking the wrong items or the wrong quantity C. Incomplete/inaccurate orders D. Inaccurate or invalid credit memos

B

Which of the following is an example of a common activity in an AIS? A. Recording sales calls for marketing purposes. B. Selling goods and services and collecting cash. C. Keeping track of the number of customers who visited the company's website. D. Organizing community services for the company.

B

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

B

Which process directly updates the Accounts Payable file? A. Ordering B. Approve Supplier Invoices C. Receiving

B

To minimize the risk of the theft of cash, the person who makes cash disbursements should not also have the duties of: (Check all that apply.) A. ordering goods. B. reconciling the bank account. C. approving supplier invoices. D. receiving goods.

B, C

An AIS is composed of people, procedures and instructions, data, software, technology infrastructure, and controls. These six components enable an AIS to fulfill which of the following important business functions? (Check all that apply.) A. Develop the procedures and instructions needed to operate the software and store the data B. Provide the controls needed to safeguard an organization's assets and data C. Transform data into information so management can plan, execute, control, and evaluate activities, resources, and personnel D. Collect and store data about the organization's activities, resources, and personnel E. Hire the best people available to manage the organization

B, C, D

Which of the following statements is (are) true? (Check all that apply.) A. IT developments should not be allowed to affect business strategy or organizational culture. B. An AIS can help improve decision making by providing accurate and timely information, reducing uncertainty, and identifying situations requiring management action. C. A well-designed AIS can add value to an organization by improving product quality, improving efficiency, and sharing knowledge. D. By paying attention to its supply chain, a company can improve its performance by helping the others in the supply chain to improve their performance. E. Because the data is so different, it is not practical to collect and integrate both financial and non-financial data about an organization's activities.

B, C, D

Which of the following statements is(are) true? (Check all that apply.) A. While the Internet is a network of value and of trust, a blockchain is a network of information. B. With blockchain, items of value can be exchanged in a secure and trusted manner. C. A smart contract is a regular contract with the terms and agreed upon details built into a blockchain. D. Blockchain is more than a database; it is a new way to process, store, share, and search information.

B, C, D

Which of the following statements is (are) true? (Check all that apply.) A. The smaller the organization and the less complicated the system, the more difficult it is to achieve goal congruence. B. Information costs and benefits can be difficult to quantify. C. There are limits to the amount of information the human mind can absorb and process. D.As a rule, users make better decisions as the quantity and quality of information decreases. E. Most systems are composed of smaller subsystems, each designed to achieve one or more organizational goals, which support a larger system.

B, C, E

Which controls are designed to reduce the risk of unauthorized disclosure of sensitive data about a company's purchases? (Check all that apply.) A. Review of all changes to master data B. Encryption C. Data processing integrity controls D. Access controls

B, D

A graphical description of a company's processes is called a: A. Document flowchart B. Program flowchart C. Business process diagram D. Data flow diagram

C

A legal contract that defines responsibility for goods while they are in transit is called A. a picking ticket. B. an invoice. C. a bill of lading. D. a packing slip.

C

A method for processing accounts payable in which each approved invoice is posted to individual supplier records in the accounts payable file and is then stored in an open invoice file is called A. voucher system. B. voucher package. C. nonvoucher system. D. disbursement voucher.

C

A well-planned and drawn level 0 data flow diagram for the revenue cycle would show which of the following processes? A. 1.1 Take customer's order; 1.2 Ship product; 1.3 Bill customer. B. 0.1 Take customer's order; 0.12 Ship product; 0.13 Bill customer. C. 1.0 Take customer's order; 2.0 Ship product; 3.0 Bill customer. D. 0.1 Take customer's order; 0.2 Ship product; 0.3 Bill customer.

C

ERP is the abbreviation for A. entity resource planning. B. enterprise reporting program. C. enterprise resource planning. D. enterprise resource program.

C

Information is best described as A. facts that are collected, recorded, stored, and processed by an information system. B. raw facts about transactions. C. data that have been organized and processed to provide meaning and improve decision making. D. a set of related, coordinated, and structured data.

C

The type of flowchart that illustrates the flow of documents and data among areas of responsibility within an organization is called A. program flowchart. B. system flowchart. C. document flowchart. D. business process flowchart

C

Which of the following is not a flowcharting symbol category? A. Storage B. Input/output C. Reporting D. Processing

C

Which of the following is not a transaction cycle? A. The revenue cycle. B. The expenditure cycle. C. The general ledger cycle. D. The HR/payroll cycle.

C

Which of the following threat(s) are data processing integrity controls designed to reduce? (Check all that apply.) A. Errors in supplier invoices B. Paying for items not received C. Mistakes in posting to accounts payable D. Failure to take advantage of discounts for prompt payment

C

With respect to data flow diagrams, which of the following is true? A. A data store represents the movement of data among processes, sources, and destinations. B. In a DFD, a data source is represented by a circle and a data destination is represented by a square. C. A data flow diagram graphically describes the flow of data within an organization. D. A process represents a repository of stored data.

C

The set of activities involved in ordering inventory, receiving it, and paying for it is referred to as the ____. (Check all that apply.) A. order-to-pay process B. revenue cycle C. expenditure cycle D. purchase-to-pay (or cash disbursement) process

C, D

Which of the following control procedures are most effective to reduce the threat of paying for services (e.g., painting, janitorial, landscape, etc.) that were not performed? (Check all that apply.) A. Competitive bidding B. Use of bar codes or RFID tags C. Budgetary controls D. Audits E. Job rotation and mandatory vacations

C, D

With respect to data flow diagrams, which of the following statements are true? (Check all that apply.) A. If two or more data flows move together, two lines are used. If the data flow separately, a single line is used. B. A context diagram is the lowest-level DFD; it provides a low-level view of a system. C. In order to provide more information, a portion of a level-zero diagram (such as process 2.0) can be divided into sub-processes (for example, 2.1, 2.2, and 2.3, if there are three sub-processes). D. DFDs are subdivided into successively lower levels in order to provide ever-increasing amounts of detail.

C, D

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

C, D, E

In a DFD, a data destination is represented by A. an arrow. B. two horizontal lines. C. a bubble. D. a square.

D

Most organizations engage in a small number of a pair of activities that happen many times. These are called: A. Conflict-congruence exchanges B. Revenue-expenditure exchanges C. Paired transaction exchanges D. Give-get exchanges

D

Restricting physical access to inventory is designed to minimize the threat of A. shipping errors. B. failure to bill. C. picking the wrong items or the wrong quantity. D. theft of inventory.

D

Which of the following controls could be used to mitigate the threat of kickbacks? A. Centralized purchasing function B. Review and approval of purchase requisitions C. Competitive bidding D. Job rotation and mandatory vacations

D

Which of the following data flow diagram symbols is used to show a transformation process in a DFD? A. Square B. Triangle C. Two parallel horizontal lines D. Circle

D

Which of the following is a benefit of implementing an ERP system at a multinational corporation? A. Standardization of procedures and reports across business units B. Customer service improves as employees can quickly access data C. Increased productivity of employees D. All of these are correct

D

Which of the following is a primary activity? A. Technology B. Purchasing C. Firm infrastructure D. Inbound logistics

D

Which approach is an organization following if it posts each individual supplier invoice in accounts payable and stores the invoices in an open-invoice file until they are paid? A. ERS B. Procurement card C. Disbursement voucher D. Voucher system E. Nonvoucher system

E

Which control would help reduce the threat of cash flow problems? A. Prompt, restrictive endorsement of all customer checks B. Having the person who opens the mail immediately create a list of all customer payments received C. None of these controls reduce the threat of cash flow problems D. All of these controls reduce the threat of cash flow problems E. Lockbox arrangements

E

Which of the following is the proper sequence of activities for transactions when an organization acquires inventory or raw materials? A. Receive, order, pay B. Pay, order, receive C. Pay, receive, order D. Order, pay, receive E. Order, receive, pay

E

An approach to inventory management that seeks to reduce required inventory levels by improving the accuracy of forecasting techniques to better schedule purchases to satisfy production needs is called A. materials requirements planning. B. just-in-time inventory system. C. economic order quantity. D. reorder point.

A

Data is most useful when ______. (Check all that apply.) A. it is in machine-readable format. B. its access is limited to a single person. C. it lacks clarity. D. it increases uncertainty.

A

The _____, who reports to the treasurer, is responsible for paying suppliers. A. cashier B. chief executive officer C. chief financial officer D. controller

A

The control procedure for restricting access to pricing master data is designed to mitigate the threat of: A. billing errors. B. the failure to bill customers. C. picking the wrong items. D. posting errors in accounts receivable.

A

The control procedure for separating the duties of the billing and shipping functions is designed to mitigate the threat of: A. the failure to bill customers. B. billing errors. C. posting errors in accounts receivable. D. inaccurate or invalid credit memos.

A

The control procedure of requiring competitive bidding is primarily designed to mitigate the risk of A. purchasing at inflated prices. B. stockouts and excess inventory. C. purchasing items not needed. D. purchasing goods of inferior quality. E. unreliable suppliers.

A

The source of back orders for inventory items is A. Revenue cycle B. Inventory control C. Production cycle D. Suppliers

A

The type of flowchart that illustrates the relationships among system input, processing, storage, and output in an organization is called ________ A. system flowchart. B. document flowchart. C. internal control flowchart. D. program flowchart.

A

What is the first step in the data processing cycle? A. Input B. Output C. Processing D. Storage

A

Which of the following statement(s) about the Internet is(are) true? (Check all that apply.) A. The Internet has made people-to-people interactions easier to engage in B. The Internet has many uses, including the ability to share information with large groups of people C. The Internet has made business-to-business transactions more difficult to engage in D. Many Internet transactions are processed and stored by older, traditional legacy systems

A, B

The text discusses three different steps when processing input. Which of the following is (are) one of those steps? (Check all that apply.) A. Make sure captured data are accurate and complete. B. Make sure to capture transaction data and enter them into the system. C. Make sure company policies are followed when data is input. D. Make sure the input data is processed and stored correctly.

A, B, C

Which of the following are threats in the sales order entry process? (Check all that apply.) A. Stockouts B. Loss of customers C. Incomplete or inaccurate orders D. Theft of inventory

A, B, C

Which controls are designed to minimize the risk of making duplicate payments? (Check all that apply.) A. Pay only from original copies of supplier invoices B. Restrict access to blank checks C. Use "Positive Pay" arrangements with banks D. Regularly reconcile the bank account E. Require a complete voucher package before issuing payment

A, E

Identify all the controls that mitigate the threat of picking the wrong items or the wrong quantity of an item: (Check all that apply.) A. Documentation of all inventory transfers B. Reconciliation of picking lists to sales order details C. Periodic physical counts of inventory, and reconciliation to recorded quantities D. Bar code and RFID technology E. Restriction of physical access to inventory

B, D

Cash flow budgets minimize the risk of which threat? A. Duplicate payments B. Paying for items not received C. Theft of cash D. Failure to take advantage of discounts for prompt payment

D

Which of the following should be done when a customer places an order? (Check all that apply.) A. Issue a credit memo B. None of these are correct C. Verify the customer's creditworthiness D. Check inventory availability

C, D

Which of the following statements about ERP systems is(are) true? (Check all that apply.) A. Well-designed ERP systems provide management with the easy access to up-to-date information needed to plan, control, and evaluate business processes more effectively. B. Before ERP systems were developed, it was easy to include nonfinancial information in an AIS. C. ERP systems integrate all aspects of a company's operations with a traditional AIS. D. ERP systems use a centralized database to share information across business processes and coordinate activities.

C, D

Which of the following statements about data storage is (are) true? (Check all that apply.) A. A general journal is used to record a large number of repetitive transactions. B. A general ledger contains detailed level data for every asset, liability, equity, revenue, and expense account. C. A chart of accounts is a list of the numbers assigned to each general ledger account. D. A subsidiary ledger contains detailed data for any general ledger account with many individual subaccounts. E. A specialized journal is used to record infrequent or non-routine transactions.

C, D

Factoring accounts receivable is one way to address the threat of A. mistakes in maintaining accounts receivable. B. loss of customers. C. failure to bill customers. D. cash flow problems due to past-due accounts. E. mistakes in billing customers.

D

Which general revenue cycle threat does encryption address? A. Loss or destruction of data B. Inaccurate or invalid master data C. Poor performance D. Unauthorized disclosure of sensitive information

D

All of the following are ways an AIS can add value to an organization except: A. Improving internal controls B. Improving efficiency C. Sharing knowledge D. Increasing product costs

D

Supplier invoices are sent to which function? A. Cash Disbursements B. Ordering C. Receiving D. Approve Supplier Invoices

D

The control procedure of supplier audits is designed to mitigate the risk of A. purchasing items not needed. B. purchasing at inflated prices. C. stockouts and excess inventory. D. kickbacks. E. purchasing goods of inferior quality.

D

The flowchart that show the sequence of logical operations executed by a computer is called a: A. Decision flowchart B. Systems flowchart C. Operations flowchart D. Program flowchart

D

The process of ordering inventory can be initiated by communication from A. The revenue cycle B. The production cycle C. Inventory control D. All of these are correct

D

Which document authorizes reducing the balance owed by a customer? A. Sales invoice B. Bill of lading C. All four documents can be used to authorize reducing the balance owed by a customer. D. Credit memo E. Monthly statement

D

Which of the following is true? A.BPDs only describe interactions within an entity; it is never used to describe interactions between entities. B. A BPD for the revenue cycle will only describe the functions performed by the purchasing company. C. There are only a small number of different symbols that can be used in drawing a BPD. D. The Business Process Modeling Initiative Notation Working Group established standards for drawing BPDs.

D

Which of the following is used to change a customer's accounts receivable balance? A. Packing slip B. Bill of lading C. Sales order D. Sales invoice E. Picking list

D

________ information reduces uncertainty, improves decision making, or confirms or corrects prior expectations. A. Reliable B. Verifiable C. Complete D. Relevant

D

Which of the following processes involve having customers send payments directly to the organization's bank? (Check all that apply.) A. FEDI B. EFT C. Electronic lockbox D. Factoring

A, B, C

Which of the following statement(s) about the history of transaction processing is(are) true? (Check all that apply.) A. We used double-entry bookkeeping systems with journals and ledgers and paper-based financial reports for hundreds of years. B. When computers were invented, we digitized journals and ledgers and created transaction files and master files that did the job of paper-based journals and ledgers. C. When the number of master files proliferated, we combined multiple files into databases, which have grown much smaller and simpler. D. Originally, people kept track of transactions using a single-entry accounting system.

A, B, C, D

Identify all the controls that mitigate the threat of theft of inventory: (Check all that apply.) A. Periodic physical counts of inventory, and reconciliation to recorded quantities B. Restriction of physical access to inventory C. Restrict the ability to cancel sales D. Bar code and RFID technology E. Documentation of all inventory transfers

A, B, C, D, E

Which of the following are flowchart preparation guidelines? (Check all that apply.) A. Show the final disposition of all the documents B. Identify the business processes, documents, data flows, and data processing procedures to be flowcharted C. Show where documents or processes originate, and data are processed, but do not show where data are stored or sent D. Show data entered into, or retrieved from, a database as passing through a processing operation (computer program) first. E. Do not indicate on the flowchart who prepared the flowchart

A, B, D

Which of the following controls are designed to minimize the risk of inaccurate or invalid master data? (Check all that apply.) A. Use access controls to restrict which employees can access master data B. Review all changes to the master data C. Encrypt all master data D. Utilize the processing integrity controls discussed in Chapter 13

A, B, D

Which document is used to authorize the release of inventory from the warehouse? A. Picking ticket B. Packing list C. Bill of lading D. Customer order

A

Which document is used to reduce the balance owed to a supplier? A. Debit memo B. Purchase order C. Credit memo D. Supplier invoice

A

Which of the following controls could be used to mitigate the threat of unauthorized disclosure of sensitive information in the expenditure cycle? A. Encryption B. Tracking and monitoring product quality by supplier C. Review and approval of purchases from new suppliers D. Competitive bidding

A

Which of the following controls is designed to mitigate the risk of purchasing goods of inferior quality? A. Holding purchasing managers responsible for the costs associated with rework and scrap B. Periodic physical counts of the inventory C. Price lists D. Collecting and monitoring supplier delivery performance data

A

Which of the following is NOT a component of an AIS? A. company culture B. IT infrastructure C. software D. people

A

Which of the following statements is (are) true? (Check all that apply.) A. A system is a set of two or more interrelated components that interact to achieve a goal. B. Businesses need to collect data about activities that take place, the resources affected by the activities, and the people who participate in the activity. C. Information is facts that are collected, recorded, stored, and processed by an information system. D. It is difficult to determine the value of information before it has been produced and utilized. E. Goal congruence occurs when a subsystem's goals are inconsistent with the goals of another subsystem or with the system as a whole.

A, B, D

What are the benefits of procurement cards? (Check all that apply.) A. Account numbers can be linked to general ledger accounts for different supplies B. Simplify accounts payable because receive only one monthly statement C. None of these are benefits D. Improve efficiency of accounts payable by reducing the number of payments made for purchase of supplies E. Spending limits reduce risk of purchasing too much supplies

A, B, D, E

To minimize the risk of the theft of cash, the person who handles customer payments should not also have the duties of (Check all that apply.) A. creating or authorizing credit memos. B. reconciling the bank account. C. picking merchandise. D. taking customer orders. E. posting remittances to customer accounts.

A, B, E

Identify all the controls that mitigate the threat of shipping errors: (Check all that apply.) A. Data entry edit controls B. Reconciliation of picking lists to sales order details C. Bar code and RFID technology D. Periodic physical counts of inventory, and reconciliation to recorded quantities E. Restriction of physical access to inventory

A, C

Which of the following are characteristics of useful information? (Check all that apply.) A. Reputable B. Encrypted C. Accurate D. Biased

A, C

Which of the following is helpful in reducing the risk of customers failing to pay for their purchases? (Check all that apply.) A. Credit limits B. Credit memos C. Accounts receivable aging report D. Separating the duties of cash collections and accounts receivable

A, C

Which of the following purposes does a receiving report fulfill? (Check all that apply.) A. Document the quality of items received B. Document the need to order items C. Document the quantity received D. Document the need to back order items

A, C

Which of the following statements is (are) true? (Check all that apply.) A. Information system designers use information technology to help decision-makers more effectively filter and condense information. B. Goal conflict occurs when a subsystem achieves its goals while contributing to the organization's overall goal. C. Benefits of information include reduced uncertainty, improved decisions, and improved ability to plan and schedule activities. D. Changes in a subsystem can usually be made without considering the effect on other subsystems. E. The value of information is the cost of producing it minus the benefit produced by the information.

A, C

Accounting software has improved significantly over time. We now have intelligent or automated accounting systems that can: (Check all that apply.) A. Use machine learning and artificial intelligence to process data and store it in the cloud B. Make critical and strategic management decisions without human intervention C. Allow companies and clients to use smart portals to transfer data and information back and forth securely D. Record transactions automatically, perform on demand accounting functions, and automatically distribute data

A, C, D

Identify all the controls that mitigate the threat of mistakes when counting deliveries from suppliers. (Check all that apply.) A. Not informing receiving employees about the quantities ordered B. Documentation of all transfers of inventory C. Requiring receiving employees to sign the receiving report D. Use of bar codes and RFID tags E. Requiring the existence of an approached purchase order prior to accepting any delivery

A, C, D

Which of the following statements is (are) true? (Check all that apply.) A. All organizations need information in order to make effective decisions. B. In the conversion cycle, companies convert company shares to cash by selling ownership shares to investors. C. In most cycles, companies repeatedly process a few related transactions, such as buying or selling goods. D. A transaction is an agreement between two entities to exchange goods or services.

A, C, D

With respect to computer-based storage concepts, which of the following statements is (are) true? (Check all that apply.) A. A file is a group of related records. B. An attribute is something about which information is stored. C. Data values are characteristics of interest that are stored. D. A set of interrelated, centrally coordinated files is referred to as a database.

A, D

With respect to data input, data must be collected about three facets of each business activity. Which of the following is (are) one of those facets? (Check all that apply.) A. The people who participate in each activity B. The controls needed to protect activity data C. The decisions that will be made about each activity D. The resource(s) affected by each activity E. Each activity of interest

A, D, E

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.) A. Vendor relationship management—procurement and promotion, vendor contact and service, and call center support B. System tools—tools for establishing master file data, specifying flow of information, and access controls C. Financial—general ledger, budgeting, cash management, and preparation of managerial reports and financial statements D. Order to cash—sales order entry, shipping, inventory, cash receipts, and commission calculation E. Project management—costing, billing, time and expense, performance units, and activity management

B, C, D, E

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

B, C, E

Which of the following are business process diagram preparation guidelines? (Check all that apply.) A. Show what technology is used in each business process B. Each row or swim lane in a BPD contains the activities performed by the indicated employee or department C. Unlike DFDs, most BPDs will not start with an action verb D. BPDs depict the major steps in a process sequentially, reading from left to right and top to bottom E. A BPD, no matter how detailed, is rarely sufficient to evaluate internal controls, such as whether duties are properly segregated

B, D

Which threats does the use of RFID and bar codes address? (Check all that apply.) A. Loss or destruction of data B. Theft of inventory C. Failure to bill D. Picking the wrong items

B, D

Identify all the controls that mitigate the threat of the theft of inventory. (Check all that apply.) A. Use of bar codes and RFID tags B. Segregation of duties of inventory custody and receiving C. Budgetary controls D. Restriction of physical access to inventory E. Documentation of all transfers of inventory

B, D, E

Which of the following are advantages of ERP systems? (Check all that apply.) A. ERP systems are relatively inexpensive. B. ERP systems provide an integrated, enterprise-wide view of an organization's data and financial situation. C. Because the ERP system benefits are so great, there is little resistance to their installation. D. Management gains greater visibility into every area of the enterprise, and greater monitoring capabilities. E. Procedures and reports are standardized across business units.

B, D, E

Which of the following are business process diagram preparation guidelines? (Check all that apply.) A. Divide the BPD into columns with labels, clearly label all symbols, and use arrowheads on all flow lines B. Get an understanding of the system using tools, such as observing business processes and data flows, or by walking through the system transactions C. Show documents as they flow through the system, and show where each is stored D. Identify business processes, documents, data flows, and data processing procedures E. Place the name, date, and preparer's name on each page of the completed BPD

B, D, E

Which of the following control procedures is designed to mitigate the threat of the theft of cash? (Check all that apply.) A. Filing invoices by discount due date B. Use of a dedicated computer and browser for online banking C. Requiring that all supplier invoices be matched to supporting documents D. Restriction of access to the supplier master fileE.Physical security of blank checks

B, D, E

Which documents are often sent to the customer along with the merchandise ordered? (Check all that apply.) A. Picking ticket B. Bill of lading C. Back order D. Accounts receivable aging report E. Packing slip

B, E

With respect to flowcharts, which of the following statements is (are) true? (Check all that apply.) A. Flowcharts can be used to analyze how to improve business processes, but not document flows. B. Document flowcharts trace a document from its cradle to its grave, showing everything that happens as it flows through the system. C. An internal control flowchart is not very helpful in spotting system weaknesses or inefficiencies. D. A system flowchart describes the specific logic used to perform a process shown on a program flowchart. E. An internal control flowchart can be used to describe, analyze, and evaluate internal control strengths.

B, E

Before a company can identify the information needed to effectively manage a process, the company must A. hire an information system director. B. upgrade its information system. C.understand its business process. D. consult with its operation department.

C

Cancelling all supporting documents when payment is made to a supplier is a control procedure designed to mitigate the threat of: A. Paying for items not received B. Cash flow problems C. Duplicate payments D. Failure to take advantage of discounts for prompt payment

C

Cupcake by Emma is a dessert retailer located in Springtown, Texas. Emma is a sole proprietorship that stocks an inventory of between 30 and 50 different kinds of desserts. Inventory is updated in real time by the company's AIS. If Emma wishes to keep cumulative data about the company, Emma might use a A. relational file. B. specific file. C. master file. D. transaction file.

C

Data must be collected about three facets of each business activity. These facets are A. the resource(s), the benefits, and the process. B. activity of interest, the resource(s), and the process. C. activity of interest, the resource(s), and the people who participate. D. activity of interest, the process, and the people who participate.

C

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

C

Separation of the check-writing and accounts payable functions is designed to mitigate the threat of: A. Failure to take advantage of discounts for prompt payment B. Duplicate payments C. Theft of cash D. Paying for items not received

C

The control procedure for mailing monthly statements to customers is designed to mitigate the threat of: A. the failure to bill customers. B. All of these are correct. C. posting errors in accounts receivable. D. inaccurate or invalid credit memos.

C

To minimize the risk of theft of consumer remittances, the person who handles and deposits customer payments can also A. post adjustments to accounts receivable. B. reconcile the bank statements. C. None of these activities can be performed by the person who handles and deposits customer payments. D. authorize credit memos.

C

What is financial electronic data interchange (FEDI)? A. It is a document listing names and amounts of all customer payments received in the mail. B. It is the transfer of funds through use of online banking software. C. It is the combination of EFT and EDI that enables both remittance data and funds transfer instructions to be included in one electronic package. D. It is a lockbox arrangement in which the bank electronically sends the company information about the customer account number and the amount remitted as soon as it receives payments.

C

Which approach to maintaining accounts receivable is more likely to be used for business-to-business transactions than for business-to-consumer transactions? A. Accounts receivable aging reports B. Cycle billing C. Open-invoice method D. Balance-forward method

C

Which control procedure is designed to minimize the threat of posting errors to accounts receivable? A. Aging of accounts receivable B. All of these controls minimize the threat of posting errors to accounts receivable C. Mailing of monthly statements to customers D. Approval of credit memos by the credit manager E. Separation of the shipping and billing functions

C

Which control would help reduce the threat of theft of cash? A. Cash flow budgets B. Discounts for prompt payment by customers C. Lockbox arrangements D. All of these controls reduce the threat of theft of cash E. None of these controls reduce the threat of theft of cash

C

Which document is no longer used to approve a supplier payment when a company is using ERS? A. Purchase order B. Receiving report C. Supplier invoice D. Credit memo

C

Which general revenue cycle threat does regular preparation of managerial reports most directly address? A. All the three threats listed here B. Loss or destruction of data C. Poor performance D. Unauthorized disclosure of sensitive information

C

Which of the following BPD symbols is used to show an activity in a process? A. Circle B. Line with arrow C. rectangle box D. Diamond

C

Which of the following Flowchart symbols is used to show an annotation in a flowchart? A. weird box that's flowy on the bottom B. cylinder C. line thingy D. rectangle box

C

Which of the following controls could be used to mitigate the threat of uncollectible accounts? A. Restriction of physical access to inventory B. Restriction of access to pricing master data C. Credit limits D. Encryption

C

Which of the following is a secondary activity? A. Service B. Operations C. Human resources D. Marketing

C