ch 2

1) Identify the statement below that is not true with regards to the accounts receivable subsidiary ledger.

B) Debits and credits in the subsidiary ledger must always equal.

9) Which of the following is an example of source data automation?

B) POS (point-of-sale) scanners in retail stores

29) Which of the following statements is not correct?

B) The audit trail consists of records stored sequentially in an audit file.

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.

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.

1) Which of the following commonly initiates the data input process?

A) a business activity

9) All of the following are disadvantages of an ERP system except

A) an ERP provides an integrated view of the organization's data.

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

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.

9) Identify the four parts of the transaction processing cycle.

A) data input, data storage, data processing, information output

28) Changing an employee's hourly wage rate would be recorded where?

A) employee master file

5) ERP stands for

A) enterprise resource planning.

2) Which of the following is not usually a consideration when designing a coding system?

A) government coding regulations

23) What is the first step in the data processing cycle?

A) input

2) In an ERP system, the module used to record data about transactions in the revenue cycle is called

A) order to cash.

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

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

14) The data processing method used by FedEx to track packages is an example of

A) real-time processing.

12) The chart of accounts of a movie theater would probably include

A) retained earnings.

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.

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.

27) A specialized journal would be most likely to be used to enter

A) sales transactions.

7) Pre-numbered invoices and pre-numbered purchase orders are examples of

A) sequence codes.

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

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.

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.

22) Source data automation refers to

A) using devices to capture transaction data in machine-readable form at the time the transaction is initiated.

17) Data processing includes all of the following except

A) verifying subsidiary ledger balances.

14) A general journal

A) would be used to record monthly depreciation entries.

21) Catarina Boards is a skateboard retailer located in Pueblo, New Mexico. Catarina Boards is a sole proprietorship that stocks an inventory of between 30 and 50 different skateboards. Inventory is updated in real time by the AIS. If Catarina wishes to keep detailed information about the purchase price of each skateboard in a place outside of the general ledger, it might use a

B) transaction file.

4) All of the following situations would likely be communicated in an exception report except

B) weekly credit and cash sales comparison.

1) Which of the following is an example of an ERP system?

C) Charlie keeps records of all his business records in a shoe box. Each week he enters all of the data into spreadsheets that automatically generate purchase orders, based on predetermined inventory reorder points. Production quotas for the coming week are also automatically generated based on customer orders.

5) The collection of employee time sheets is part of which transaction cycle?

C) the human resources cycle

16) In Petaluma, California, electric power is provided to consumers by Pacific Power. Each month Pacific Power mails bills to 86,000 households and then processes payments as they are received. What is the best way for this business to ensure that payment data entry is efficient and accurate?

C) turnaround documents

13) What is the final step in the data processing cycle?

output

12) Identify the item below that is not one of the four different types of data processing activities.

using

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)

entity

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)

field

13) An ERP system might facilitate the purchase of direct materials by all of the following except

13) An ERP system might facilitate the purchase of direct materials by all of the following except

12) All of the following are ERP vendors except

A) Dell.

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.

11) Source documents generally help to improve accuracy in transaction processing because ) they specify which information to collect. B) logically related data can be grouped in the same area of the document. C) they provide directions and steps for completing the form. D) All of the above are correct.

Answer: D

19) Which of the following statements about a master file is false?

B) A master file's individual records are rarely, if ever, changed.

18) Which statement below is true with regards to an audit trail?

B) An audit trail provides the means to check the accuracy and validity of ledger postings.

4) A change in an employee's hourly pay would be recorded in

C) the employee master file.

11) To be effective, the chart of accounts must

B) contain sufficient detail.

6) The general ledger account that corresponds to a subsidiary ledger account is known as a(n)

B) control account.

5) John Pablo works in the accounting department of a multinational manufacturing company. His job includes updating accounts payable based on purchase orders and checks. His responsibilities are part of the company's

B) expenditure cycle.

3) Which step below is not considered to be part of the data processing cycle?

B) feedback from external sources

8) When printed on paper, data output is referred to as

B) hard copy.

2) The quality assurance department at a large manufacturing business enters data into the AIS that is used to produce a weekly report that summarizes the proportion of defective units in each product line. This is an example of

B) internal nonfinancial information.

6) In an ERP system, the module used to record data about transactions in the disbursement cycle is called

B) purchase to pay.

3) Which of the following information would most likely be reviewed by management on an exception report?

B) quality control system failures

6) Common source documents for the revenue cycle include all of the following except sales order. B) receiving report. C) delivery ticket. D) credit memo.

B) receiving report.

17) A specialized journal

B) simplifies the process of recording large numbers of repetitive transactions.

15) Street Smarts (SS) is a retailer located in Naperville, Illinois. During the peak tourist season, it has average daily cash and credit card sales in excess of $7,000. What is the best way for SS to ensure that sales data entry is efficient and accurate?

B) source data automation

13) The efficiency of recording numerous business transactions can be best improved by the use of

B) specialized journals.

4) Issuing a purchase order is part of which transaction cycle?

B) the expenditure cycle

10) Identify the statement below that is false with regards to effective coding practices.

C) Codes should be customized for each division of an organization.

13) Which of the following statements is true?

C) On-line batch processing is a combination of real-time and batch processing.

10) Pre-numbering of source documents helps to verify that

C) all transactions have been recorded.

12) In transaction processing, generally which activity comes first?

C) capturing data on source documents

8) In an ERP system, the module used to record marketing data is called

C) customer relationship management.

10) All of the following are advantages of an ERP system except

C) it takes considerable experience and training to use an ERP system effectively.

7) In an ERP system, the module used to record data about transactions in the production cycle is called

C) manufacturing.

16) A subsidiary ledger

C) records all detailed data for any general ledger account that has individual sub-accounts.

10) What is the most frequent revenue cycle transaction?

C) sale to customer

26) The coding technique most likely used for sales orders is

C) sequence code.

9) When displayed on a monitor, data output is referred to as

C) soft copy.

11) All of the following are reasons that implementing a new ERP may fail except

D) ERPs may require procedures and reports to be standardized across business units.

1) Which statement below regarding the AIS is false?

D) Traditionally, most AIS have been designed so that both financial and operational data are stored in a manner that facilitates their integration in reports.

10) Identify the output below that an accounting information system can provide.

D) all of the above

3) Implementation of an ERP system requires increased focus on all except which of the following controls?

D) appropriate disposal of hard copy reports

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

D) both A and B

15) The general ledger

D) contains summary-level data for every account of the organization.

7) The existence of multiple systems which provide information can result in all of the followingexcept

D) efficiency.

7) Which of the following documents would be found in the expenditure cycle?

D) purchase order

24) A purchase requisition is a common source document used to facilitate which business activity?

D) purchase request

18) The Cape Fear Rocket Club heads out to the dunes of Cape Fear, Oregon every August to pierce the sky with their fiery projectiles. An enterprising seller of t-shirts has devised a series of designs that capture the spirit of the event in silk-screened splendor. His employees can be found on many of the major intersections selling his products out of the backs of pickup trucks. What is the best way for this business to ensure that sales data entry is efficient and accurate?

D) sequentially numbered forms

1) The general ledger

D) summarizes the transactions in journals.

20) Which of the following is conceptually similar to a journal in a manual AIS?

D) transaction file

22) 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 price of the Japanese fans is a(n)

attribute

23) 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 represents a(n)

record