Deck 2: Overview of Transaction Processing and Enterprise Resource Planning Systems

Question 1

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.

Answer 1

A

Question 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

Answer 2

D

Question 3

What is the final step in the data processing cycle?

A)output
B)storage
C)processing
D)input

Answer 3

A

Question 4

What is the most frequent revenue cycle transaction?

A)purchase of inventory
B)receipt of cash
C)sale to customer
D)billing

Question 5

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

Question 6

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

Question 7

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

A)data input
B)feedback from external sources
C)data storage
D)data processing

Question 8

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

Question 9

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

Question 10

Making payments to 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; expenditure cycle

Question 11

Describe the basic cycles and business activities for a typical merchandising company.

Question 12

Issuing a purchase order is part of which transaction cycle?

A)the revenue cycle
B)the expenditure cycle
C)the human resources cycle
D)the production cycle

Question 13

The general ledger

A)summarizes the information on the trial balance.
B)is posted in total to the general journal.
C)only includes balance sheet accounts.
D)summarizes the transactions in journals.

Question 14

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

Question 15

The existence of relevant data guarantees the data are useful.

Question 16

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

A)revenue cycle.
B)expenditure cycle.
C)financing cycle.
D)production cycle.

Question 17

Which of the following is not considered a source document?

A)A copy of the company's financial statements.
B)A copy of the company's shipping document.
C)A copy of the company's sales journal.
D)A copy of the company's ledger.

Question 18

What is the first step in the data processing cycle?

A)output
B)storage
C)processing
D)input

Question 19

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

Question 20

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.

Question 21

Common source documents for the revenue cycle include all of the following except

A)sales order.
B)receiving report.
C)delivery ticket.
D)credit memo.

Question 22

In Petaluma,California,electric power is provided to consumers by Pacific Power.Each month Pacific Power mails bills to 186,000 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?

A)well-designed paper forms
B)source data automation
C)turnaround documents
D)sequentially numbered bills

Question 23

In transaction processing,generally which activity comes first?

A)recording data in a journal
B)posting items to special journals
C)capturing data on source documents
D)recording data in a general ledger

Question 24

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.

Question 25

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?

A)well-designed paper forms
B)source data automation
C)turnaround documents
D)sequentially numbered forms

Question 26

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

A)the revenue cycle
B)the production cycle
C)the human resources cycle
D)the expenditure cycle

Question 27

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.

Question 28

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

A)a utility bill
B)POS (point-of-sale)scanners in retail stores
C)a bill of lading
D)a subsidiary ledger

Question 29

Pre-numbering of shipping documents helps to verify that

A)documents have been used in order.
B)company policies were followed.
C)all transactions have been recorded.
D)source data automation was used to capture data.

Question 30

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

A)delivery ticket
B)time card
C)credit memo
D)purchase order

Question 31

Describe the methods used to collect data about business activities.Describe design and control considerations for each of the data collection methods.

Question 32

What is the purpose of source documents? What controls are embedded in source documents? Give two examples of source documents.

Question 33

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.

Question 34

Which of the following statements is true?

A)Batch processing ensures that stored information is always current.
B)Batch input is more accurate than on-line data entry.
C)On-line batch processing is a combination of real-time and batch processing.
D)Batch processing is not frequently used.

Question 35

What is a turnaround document? Provide at least one example of a turnaround document.

Question 36

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.

Question 37

Street Smarts is a retailer located in Naperville,Illinois.During the peak tourist season,it has average daily cash and credit card sales in excess of $10,000.What is the best way for Street Smarts to ensure that sales data entry is efficient and accurate?

A)well-designed paper forms
B)source data automation
C)turnaround documents
D)sequentially numbered sales invoices

Question 38

Build Smarts is a supplier of building materials to more than 150 builders in the state of Illinois.What is the best way for Build Smarts to ensure that all sales are recorded?

A)well-designed paper forms
B)source data automation
C)turnaround documents
D)sequentially numbered sales invoices

Question 39

Source documents generally help to improve accuracy in transaction processing because

A)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.

Question 40

The collection of customer payment is part of which transaction cycle?

A)the revenue cycle
B)the production cycle
C)the human resources cycle
D)the expenditure cycle

Question 41

Product code WSH500D08 is an example of

A)sequence codes.
B)block codes.
C)group codes.
D)mnemonic codes.

Question 42

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

A)prenumbered source documents.
B)specialized journals.
C)posting references.
D)subsidiary ledgers.

Question 43

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

A)dependent account.
B)control account.
C)credit account.
D)attribute account.

Question 44

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.

Question 45

All of the following are guidelines for developing a good coding system except

A)be consistent with its intended use.
B)be flexible to allow for growth.
C)be as sophisticated as possible to promote usage.
D)be consistent with the company's organization structure.

Question 46

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.

Question 47

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.

Question 48

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

A)Every credit sale is entered individually into the subsidiary ledger.
B)Debits and credits in the subsidiary ledger must always equal.
C)The subsidiary ledgers play an important role in maintaining the accuracy of the data stored in the AIS.
D)The total of the subsidiary ledgers must equal the control account.

Question 49

What is the second step in the data processing cycle?

A)Input.
B)Output.
C)Storage.
D)Processing.

Question 50

A chart of accounts is an example of (select all that apply)

A)sequence codes.
B)block codes.
C)group codes.
D)mnemonic codes.

Question 51

The chart of accounts of a fast-food restaurant would probably include

A)a list of vendors.
B)a list of financial statement accounts.
C)a list of customers.
D)a list of employees.

Question 52

Pre-numbered shipping documents and pre-numbered invoices are examples of

A)sequence codes.
B)block codes.
C)group codes.
D)mnemonic codes.

Question 53

Product items are often coded with (select all that apply)

A)sequence codes.
B)block codes.
C)group codes.
D)mnemonic codes.

Question 54

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

Question 55

The type of journal that records large numbers of repetitive transactions such as sales,cash receipts,and cash disbursements is

A)a general journal.
B)a subsidiary journal.
C)a specialized journal.
D)a detailed transaction journal.

Question 56

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.

Question 57

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.

Question 58

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.

Question 59

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

A)Codes should allow for growth.
B)Codes should be consistent with intended use.
C)Codes should be customized for each division of an organization.
D)Codes should be as simple as possible.

Question 60

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

A)customer sale
B)receipt of goods
C)inventory purchase
D)purchase request

Question 61

Which of the following statements is not correct?

A)The audit trail is intended to verify the validity and accuracy of transaction recording.
B)The audit trail consists of records stored sequentially in an audit file.
C)The audit trail provides the means for locating and examining source documents.
D)The audit trail is created with document numbers and posting references.

Question 62

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)

A)entity.
B)attribute.
C)field.
D)record.

Question 63

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

A)database
B)master file
C)record
D)transaction file

Question 64

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

A)A master file is conceptually similar to a ledger in a manual AIS.
B)A master file's individual records are rarely, if ever, changed.
C)A master file exists across fiscal periods.
D)A master file stores cumulative information.

Question 65

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 a cumulative information about its company',it might use a

A)relational ledger.
B)transaction file.
C)master file.
D)specific ledger.

Question 66

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.

Question 67

Changing a customer's credit limit would be recorded where?

A)Customer master file.
B)Customer transaction file.
C)Special journal.
D)Customer update file.

Question 68

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

Question 69

When printed on paper,data output is referred to as

A)reports.
B)hard copy.
C)soft copy.
D)financials.

Question 70

The general 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.

Question 71

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

A)relational ledger.
B)transaction file.
C)master file.
D)specific ledger.

Question 72

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.

Question 73

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

A)An audit trail begins with the general journal.
B)An audit trail provides the means to check the accuracy and validity of ledger postings.
C)An audit trail is a summary of recorded transactions.
D)An audit trail is automatically created in every computer-based information system.

Question 74

Which of the following statement is true about master file?

A)Individual master file records are permanent.
B)Individual master file records may change frequently.
C)Individual master file records are sometime being referred to as date value.
D)Individual master file records are sometime being referred to as entity.

Question 75

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.

Question 76

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.

Question 77

The coding technique most likely used for sales orders is

A)block code.
B)group code.
C)sequence code.
D)data code.

Question 78

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.

Question 79

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)

A)entity.
B)attribute.
C)field.
D)record.

Question 80

A specialized journal

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.