Deck 6: Overview of Transaction Processing and Financial Reporting Systems

Question 1

The general journal is used to record recurring transactions that are similar in nature.

Answer 1

False

Question 2

Directing work-in-process through its various stages of manufacturing is part of the conversion cycle.

Answer 2

True

Question 3

System flowcharts represent the input sources,programs,and output products of a computer system.

Answer 3

True

Question 4

Batch processing is best used when timely information is needed because this method processes data efficiently.

Question 5

Auditors may prepare program flowcharts to verify the correctness of program logic.

Question 6

The box symbol represents a temporary file.

Question 7

The portion of the monthly bill from a credit card company is an example of a turn-around document.

Question 8

Program flowcharts are used to describe the logic represented in system flowcharts.

Question 9

Program flowcharts depict the type of media being used (paper,magnetic tape,or disks)and terminals.

Question 10

An inverted triangle with the letter "N" represents a file in "name" order.

Question 11

Backups are automatically produced in a direct access file environment.

Question 12

The process of acquiring raw materials is part of the conversion cycle.

Question 13

Real time processing is used for routine transactions in large numbers.

Question 14

Data flow diagrams represent the physical system.

Question 15

Batch processing systems can store data on direct access storage devices.

Question 16

Processing more transactions at a lower unit cost makes batch processing more efficient than real-time systems.

Question 17

A control account is a general ledger account which is supported by a subsidiary ledger.

Question 18

The most significant characteristic of direct access files is access speed.

Question 19

Document flowcharts are used to represent systems at different levels of detail.

Question 20

System flowcharts are often used to depict processes that are handled in batches.

Question 21

Batch processing of accounts common to many concurrent transactions reduces operational efficiency.

Question 22

Real-time processing in systems that handle large volumes of transactions each day can create operational inefficiencies.

Question 23

In general,a special journal would not be used to record

A) sales
B) cash disbursements
C) depreciation
D) purchases

Question 24

Which system is not part of the expenditure cycle?

A) cash disbursements
B) payroll
C) production planning/control
D) purchases/accounts payable

Question 25

Batch processing of non-critical accounts improves operational efficiency.

Question 26

Operational inefficiencies occur because accounts common to many concurrent transactions need to be updated in real time.

Question 27

Which of the following is a turn-around document?

A) remittance advice
B) sales order
C) purchase order
D) payroll check

Question 28

Block codes restrict each class to a pre-specified range.

Question 29

The order of the entries made in the general journal is by

A) date
B) account number
C) user
D) customer number

Question 30

Sequential codes may be used to represent complex items or events involving two or more pieces of related data.

Question 31

Mnemonic codes are appropriate for items in either an ascending or descending sequence,such as the numbering of checks or source documents.

Question 32

The journal voucher is the document that authorizes entries to be made to the general ledger.

Question 33

For a given field size,a system that uses alphabetic codes can represent far more situations than a system with that uses numeric codes.

Question 34

Each account in the chart of accounts has a separate record in the general ledger master file.

Question 35

Operational inefficiencies occur because accounts unique to many concurrent transactions need to be updated in real time.

Question 36

Individuals with access authority to general ledger accounts should not prepare journal vouchers.

Question 37

The block code is the coding scheme most appropriate for a chart of accounts.

Question 38

The most common means of making entries in the general ledger is via the journal voucher.

Question 39

The order of the entries made in the ledger is by

A) transaction number
B) account number
C) date
D) user

Question 40

Which system produces information used for inventory valuation,budgeting,cost control,performance reporting,and make-buy decisions?

A) sales order processing
B) purchases/accounts payable
C) cash disbursements
D) cost accounting

Question 41

When determining the batch size,which consideration is the least important?

A) achieving economies by grouping together large numbers of transactions
B) complying with legal mandates
C) providing control over the transaction process
D) balancing the trade off between batch size and error detection

Question 42

System flowcharts

A) depict logical tasks that are being performed, but not who is performing them
B) illustrate the relationship between database entities in systems.
C) represent relationships between key elements of both manual and computer systems.
D) describe the internal logic of computer applications in systems. .

Question 43

Both the revenue and the expenditure cycle can be viewed as having two key parts.These are

A) manual and computerized
B) physical and financial
C) input and output
D) batch and real-time

Question 44

Which document is not a type of source document?

A) a sales order
B) an employee time card
C) a paycheck
D) a sales return receipt

Question 45

A journal is used in manual accounting environments.What file is comparable to a journal in a computerized environment?

A) archive file
B) reference file
C) transaction file
D) master file

Question 46

Which account is least likely to have a subsidiary ledger?

A) sales
B) accounts receivable
C) fixed assets
D) inventory

Question 47

All of the following can provide evidence of an economic event except

A) source document
B) turn-around document
C) master document
D) product document

Question 48

Which of the following is an archive file?

A) an accounts payable subsidiary ledger
B) a cash receipts file
C) a sales journal
D) a file of accounts receivable that have been written off

Question 49

Which symbol represents a data store?

A)
B)
C)
D)

Question 50

In contrast to a real-time system,in a batch processing system

A) there is a lag between the time when the economic event occurs and the financial records are updated
B) relatively more resources are required
C) a greater resource commitment per unit of output is required
D) processing takes place when the economic event occurs

Question 51

Which method of processing does not use the destructive update approach?

A) batch processing using direct access files
B) real-time processing
C) batch processing using sequential files
D) all of the above use the destructive update approach

Question 52

Which step is not found in batch processing using sequential files?

A) control totals
B) sort runs
C) edit runs
D) immediate feedback of data entry errors

Question 53

Data flow diagrams

A) depict logical tasks that are being performed, but not who is performing them
B) illustrate the relationship between processes, and the documents that flow between them and trigger activities
C) represent relationships between key elements of the computer system
D) describe in detail the logic of the process

Question 54

Which type of graphical documentation represents systems at different levels of detail?

A) data flow diagram
B) document flowchart
C) system flowchart
D) program flowchart

Question 55

The type of transaction most suitable for batch processing is

A) airline reservations
B) credit authorization
C) payroll processing
D) adjustments to perpetual inventory

Question 56

In contrast to a batch processing system,in a real-time system

A) a lag occurs between the time of the economic event and when the transaction is recorded
B) relatively fewer hardware, programming, and training resources are required
C) a lesser resource commitment per unit of output is required
D) processing takes place when the economic event occurs

Question 57

The type of transaction most suitable for real-time processing is

A) recording fixed asset purchases
B) recording interest earned on long-term bonds
C) adjusting prepaid insurance
D) recording a sale on account

Question 58

In a computerized environment,a list of authorized suppliers would be found in the

A) master file
B) transaction file
C) reference file
D) archive file

Question 59

The most important purpose of a turnaround document is to

A) serve as a source document
B) inform a customer of the outstanding amount payable
C) provide an audit trail for the external auditor
D) inform the bank of electronic funds deposits

Question 60

Subsidiary ledgers are used in manual accounting environments.What file is comparable to a subsidiary ledger in a computerized environment?

A) archive file
B) reference file
C) transaction file
D) master file

Question 61

Which symbol represents a manual operation?

A)
B)
C)
D)

Question 62

Real-time processing would be most beneficial in handling a firm's

A) fixed asset records
B) retained earning information
C) merchandise inventory
D) depreciation records

Question 63

The characteristics that distinguish between batch and real-time systems include all of the following except

A) time frame
B) resources used
C) file format
D) efficiency of processing

Question 64

When a firm wants its coding system to convey meaning without reference to any other document,it would choose

A) an alphabetic code
B) a mnemonic code
C) a group code
D) a block code

Question 65

Which symbol represents a document?

A)
B)
C)
D)

Question 66

Which accounting application is least suited to batch processing?

A) general ledger
B) vendor payments
C) sales order processing
D) payroll

Question 67

Which accounting application is best suited to batch processing?

A) general ledger
B) updating inventory reductions to the subsidiary ledger
C) sales order processing
D) credit checking

Question 68

Operational inefficiencies occur because

A) accounts both common and unique to many concurrent transactions need to be updated in real time.
B) accounts common to many concurrent transactions need to be updated in real time.
C) accounts unique to many concurrent transactions need to be updated in real time.
D) None of the above are true statements

Question 69

Entries into the General Ledger System (GLS)can be made using information from

A) the general journal
B) a journal voucher which represents a summary of similar transactions
C) a journal voucher which represents a single, unusual transaction
D) all of the above

Question 70

A common use for sequential coding is

A) creating the chart of accounts
B) identifying inventory items
C) identifying documents
D) identifying fixed assets

Question 71

Operational efficiencies can be improved by

A) updating accounts both common and unique to many concurrent transactions in real time.
B) updating accounts both common and unique to many concurrent transactions in batch mode.
C) updating accounts unique to many concurrent transactions in real time and updating common accounts in batch mode.
D) None of the above are true statements

Question 72

Which symbol represents accounting records?

A)
B)
C)
D)

Question 73

Sequential storage means

A) data is stored on tape
B) access is achieved through an index
C) access is direct
D) reading record 100 requires first reading records 1 to 99

Question 74

The most important advantage of an alphabetic code is that

A) meaning is readily conveyed to users
B) sorting is simplified
C) the capacity to represent items is increased
D) missing documents can be identified

Question 75

The coding scheme most appropriate for a chart of accounts is

A) sequential code
B) block code
C) group code
D) mnemonic code

Question 76

Which symbol represents a decision?

A)
B)
C)
D)

Question 77

The most important advantage of sequential coding is that

A) missing or unrecorded documents can be identified
B) the code itself lacks informational content
C) items cannot be inserted
D) deletions affect the sequence

Question 78

Which symbol represents a magnetic tape (sequential storage device)?

A)
B)
C)
D)

Question 79

Which statement is not true/

A) The journal voucher is the only source of input into the general ledger.
B) A journal voucher can be used to represent summaries of similar transactions or a single unique transaction.
C) Journal vouchers are not used to make adjusting entries and closing entries in the general ledger.
D) Journal vouchers offer a degree of control against unauthorized general ledger entries.

Question 80

A file that stores data used as a standard when processing transactions is

A) a reference file
B) a master file
C) a transaction file
D) an archive file