Question 1

Which of the following documents would be found in the expenditure cycle?
A) delivery ticket
B) time card
C) credit memo
D) purchase order

Accepted Answer

The purchase order is a key document in the expenditure cycle as it initiates the purchase of goods or services. Delivery tickets would be found in the receiving cycle, time cards in the payroll cycle, and credit memos in the sales cycle.

Question 2

Which of the following is not true about the accounts receivable subsidiary ledger?
A) Debits and credits in the subsidiary ledger must always equal.
B) Every credit sale is entered individually into the subsidiary ledger.
C) The total of the subsidiary ledgers must equal the control account.
D) The subsidiary ledgers play an important role in maintaining the accuracy of the data stored in the AIS.

Accepted Answer

While it is important to maintain accuracy in the subsidiary ledger, it is not necessary for the debits and credits to always equal. The subsidiary ledger tracks individual accounts and transactions, and if there are discrepancies, they can be resolved through further analysis and investigation.

Question 3

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

Accepted Answer

POS scanners in retail stores are an example of source data automation as they automatically capture data at the point of sale and transmit it to the organization's system for processing. Utility bills, bills of lading, and subsidiary ledgers are not typically automated sources of data.

Question 4

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

Accepted Answer

The answer of An ERP system might facilitate the purchase...

Question 5

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

Accepted Answer

The answer of Data must be collected about three facets...

Question 6

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

Accepted Answer

Feedback from external sources is not part of the data processing cycle, as it occurs after the data has been processed and is used to inform future cycles. The data processing cycle includes data input, data processing, and data storage as essential steps.

Question 7

The issuing of a purchase order is part of which transaction cycle?
A) the revenue cycle
B) the production cycle
C) the human resources cycle
D) the expenditure cycle

Accepted Answer

The issuing of a purchase order is part of the expenditure cycle, which involves the purchase of goods and services from external vendors.

Question 8

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

Accepted Answer

A delivery of inventory from a vendor would be recorded in the purchases journal as a credit purchase, which is part of the expenditure cycle. This cycle includes activities related to purchasing and paying for goods and services.

Question 9

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.

Accepted Answer

While the balances in a special journal should be periodically summarized and posted to the general ledger, they do not necessarily have to reconcile to the general ledger at all times. Reconciliation is typically done at the end of an accounting period when the special journal is summarized and posted to the general ledger.

Question 10

The collection of job time tickets or time sheets is part of which transaction cycle?
A) revenue cycle
B) production cycle
C) human resources cycle
D) expenditure cycle

Accepted Answer

The collection of job time tickets or time sheets is part of the human resources cycle, as it involves tracking employee work hours and labor costs.

Question 11

The general ledger
A) summarizes the transactions in journals.
B) only includes balance sheet accounts.
C) is posted in total to the general journal.
D) is the initial place to record depreciation expense.

Accepted Answer

The general ledger summarizes the transactions in journals, such as the sales journal, cash receipts journal, and payroll journal. It includes all accounts, both balance sheet and income statement accounts. The general journal is used for adjusting entries and other non-routine transactions. Depreciation expense is recorded in the general journal or a specialized journal such as the depreciation journal, not in the general ledger.

Question 12

What usually initiates data input into a system?
A) The transaction system automatically checks each hour to see if any new data is available for input and processing.
B) The performance of some business activity generally serves as the trigger for data input.
C) A general ledger program is queried to produce a trial balance at the end of an accounting period.
D) Data is only input when a source document is submitted to the accounting department.

Accepted Answer

In most cases, data input into a system is triggered by the performance of a business activity. For example, sales transactions would initiate data input into the accounting system. Option A is not always accurate as data may be input at different intervals, not only every hour. Option C is not correct as querying a general ledger program does not initiate new data input. Option D is too narrow in scope, as not all data input requires a source document.

Question 13

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.

Accepted Answer

When the sum of all entries in the subsidiary ledger equals the balance in the corresponding general ledger account, it is assumed that the recording processes were accurate. This is because the subsidiary ledger provides a detailed breakdown of an account in the general ledger, and if the total of all entries in the subsidiary ledger matches the balance in the general ledger, it suggests that all transactions have been recorded accurately in the subsidiary ledger and subsequently posted to the general ledger.

Question 14

Which of the following is not usually a consideration when designing a coding system?
A) Government regulations on coding systems
B) Standardization
C) Future expansion needs
D) Facilitating report preparation

Accepted Answer

Government regulations on coding systems are usually already in place and must be followed, rather than being a consideration during the design phase. The other options are common considerations during the design of a coding system.

Question 15

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.

Accepted Answer

All of the above are correct. Source documents specify which information to collect, group logically related data, and provide directions for completing the form. This helps to ensure that accurate information is collected and entered into the system.

Question 16

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.

Accepted Answer

The receiving report is a source document for the expenditure cycle, not the revenue cycle. The other options are all typical source documents for the revenue cycle.

Question 17

Pre-numbering of source documents helps to verify that
A) all transactions have been recorded since the numerical sequence serves as a control.
B) source data automation was used to capture data.
C) documents have been used in order.
D) company policies were followed.

Accepted Answer

Pre-numbering of source documents ensures that all transactions are recorded since the numerical sequence serves as a control. It helps to prevent omissions or duplication of transactions, thereby ensuring the accuracy and completeness of the recorded data. The other options are not directly related to the purpose of pre-numbering of source documents.

Question 18

Changing an employee's hourly wage rate would be recorded in which file?
A) Employee master file
B) Employee transaction file
C) Payroll master file
D) Payroll transaction file

Accepted Answer

Changing an employee's hourly wage rate is a permanent change that should be recorded in the employee master file. The employee master file stores static information about each employee, such as their name, address, job title, pay rate, and other employment information. It is separate from the transactional payroll files, which record data about each payroll cycle, such as hours worked, gross pay, taxes withheld, and net pay.

Question 19

A typical source document could be
A) in some paper form.
B) a computer data entry screen.
C) a notepad entry.
D) both A and B

Accepted Answer

A typical source document can be both in some paper form (such as an invoice or receipt) as well as a computer data entry screen (such as a web form or application). Both types of source documents can be used to gather information and create records of transactions for accounting or data management purposes.

Question 20

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) source data automation.
D) transaction documents.

Accepted Answer

Turnaround documents are those documents that are initially sent to customers or suppliers and are then sent back to the company in the course of a business transaction. These documents facilitate efficient and accurate data processing and help maintain a record of the transaction. Examples of turnaround documents include invoices, purchase orders, and shipping documents.

Quiz 2: Overview of Transaction Processing and Erp Systems

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

Which of the following is not true about the accounts receivable subsidiary ledger?

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

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

Data must be collected about three facets of each business activity.What are they?

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

The issuing of a purchase order is part of which transaction cycle?

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?

Which of the following statements regarding special journals is not true?

The collection of job time tickets or time sheets is part of which transaction cycle?

The general ledger

What usually initiates data input into a system?

When the sum of all entries in the subsidiary ledger equals the balance in the corresponding general ledger account,it is assumed that

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

Source documents generally help to improve accuracy in transaction processing because

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

Pre-numbering of source documents helps to verify that

Changing an employee's hourly wage rate would be recorded in which file?

A typical source document could be

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