Accounting Information Systems 13th Edition By Marshall-B.-Romney – Test Bank

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Accounting Information Systems 13th Edition By Marshall-B.-Romney – Test Bank

Accounting Information Systems, 13e (Romney/Steinbart)

Chapter 2   Overview of Transaction Processing and Enterprise Resource Planning Systems

 

2.1   Describe the four parts of the data processing cycle and the major activities in each.

 

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

  1. A) a business activity
  2. B) automatic batch processing
  3. C) an accounting department source document
  4. D) a trial balance query

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

2) A typical source document could be

  1. A) some type of paper document.
  2. B) a computer data entry screen.
  3. C) the company’s financial statements.
  4. D) both A and B

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) data input
  2. B) feedback from external sources
  3. C) data storage
  4. D) data processing

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) revenue cycle.
  2. B) expenditure cycle.
  3. C) financing cycle.
  4. D) production cycle.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

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

  1. A) revenue cycle.
  2. B) expenditure cycle.
  3. C) financing cycle.
  4. D) production cycle.

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) revenue cycle.
  2. B) expenditure cycle.
  3. C) financing cycle.
  4. D) production cycle.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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?

  1. A) purchases journal; expenditure cycle
  2. B) general journal; expenditure cycle
  3. C) general ledger; expenditure cycle
  4. D) cash disbursements journal; production cycle

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Difficult

AACSB:  Reflective Thinking

 

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

Answer:  Revenue cycle — deliver inventory to customers and collect cash. Expenditure cycle — receive goods and services from vendors and pay cash. Human resources cycle — track hours worked by employees and record withholding data.

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

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

  1. A) data input, data storage, data processing, information output
  2. B) data input, data recall, data processing, information output
  3. C) data input, data recall, data transmission, information output
  4. D) data input, data recall, data transmission, data storage

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

10) What is the most frequent revenue cycle transaction?

  1. A) purchase of inventory
  2. B) receipt of cash
  3. C) sale to customer
  4. D) billing

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

11) True or False: The existence of relevant data guarantees the data are useful.

Answer:  FALSE

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) creating
  2. B) reading
  3. C) using
  4. D) deleting

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) output
  2. B) storage
  3. C) processing
  4. D) input

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

 

2.2   Describe documents and procedures used to collect and process transaction data.

 

1) The general ledger

  1. A) is the initial place to record general expenses.
  2. B) is posted in total to the general journal.
  3. C) only includes balance sheet accounts.
  4. D) summarizes the transactions in journals.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

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?

  1. A) purchases journal; expenditure cycle
  2. B) general journal; expenditure cycle
  3. C) general ledger; expenditure cycle
  4. D) cash disbursements journal; production cycle

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) the business activity, the resources it affects, the people who participate
  2. B) the business activity, the transactions it creates, the impact on the financial statements
  3. C) the inputs, outputs and processes used
  4. D) who is involved, what was sold, how much was paid

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) the revenue cycle
  2. B) the expenditure cycle
  3. C) the human resources cycle
  4. D) the production cycle

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

 

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

  1. A) the revenue cycle
  2. B) the production cycle
  3. C) the human resources cycle
  4. D) the expenditure cycle

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) sales order.
  2. B) receiving report.
  3. C) delivery ticket.
  4. D) credit memo.

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

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

  1. A) delivery ticket
  2. B) time card
  3. C) credit memo
  4. D) purchase order

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) turnaround documents.
  2. B) source documents.
  3. C) input documents.
  4. D) transaction documents.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

 

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

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

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

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

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

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

11) Source documents generally help to improve accuracy in transaction processing because

  1. A) they specify which information to collect.
  2. B) logically related data can be grouped in the same area of the document.
  3. C) they provide directions and steps for completing the form.
  4. D) All of the above are correct.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

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

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

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

 

13) Which of the following statements is true?

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

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) real-time processing.
  2. B) batch processing.
  3. C) online batch processing.
  4. D) real-time batch processing.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

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?

  1. A) well-designed paper forms
  2. B) source data automation
  3. C) turnaround documents
  4. D) sequentially numbered sales invoices

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

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?

  1. A) well-designed paper forms
  2. B) source data automation
  3. C) turnaround documents
  4. D) sequentially numbered bills

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

17) Data processing includes all of the following except

  1. A) verifying subsidiary ledger balances.
  2. B) changing customer addresses.
  3. C) removing inventory items no longer offered.
  4. D) adding the name of a new vendor.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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?

  1. A) well-designed paper forms
  2. B) source data automation
  3. C) turnaround documents
  4. D) sequentially numbered forms

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

19) Which of the following statements about data processing methods is true?

  1. A) Online real-time processing does not store data in a temporary file.
  2. B) Batch processing cannot be used to update a master file.
  3. C) Control totals are used to verify accurate processing in both batch and online batch processing.
  4. D) Online real-time processing is only possible with source data automation.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Reflective Thinking

 

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

Answer:  The primary purpose of source documents is to record data about business activities. Source documents standardize data collection procedures for an organization and provide better control and accuracy. Source documents are generally pre-numbered, which helps to verify that all transactions have been recorded and there is no missing document; if a document is missing, then which one(s) can be determined. Proper design of source documents ensures which information to collect, preprints standard information such as addresses, and provides directions for completing the form. Examples include: invoices, timecards, sales orders, and purchase orders.

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Reflective Thinking

 

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

Answer:  Data about business activities can be collected with source documents, either on paper or electronic, turnaround documents, and source data automation.

 

Source documents define what data to collect about an activity, group logically related data close together, provide instructions on how to complete the document, include fields for approvals, and use preprinted standard data. Paper documents should be sequentially prenumbered to allow verification that all documents have been recorded. Electronic source documents should also utilize pull-down menus, drop-down boxes, default values, preformatting, auto sequential numbering, and prompting for complete data entry.

 

Turnaround documents often begin as output documents that are then sent to external users for further completion. Turnaround documents should utilize most of the same design and control considerations as source documents, but should include data in machine-readable form, such as bar codes or optical character recognition.

 

Source data automation utilizes technology to capture data in machine-readable form at the time and place the business activity occurs. Source data automation technology includes point-of-sale terminals, bar codes, RFID tags, and electronic data interchange. An especially important control consideration for source data automation is a way to indicate authorization of the activity.

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Reflective Thinking

 

 

22) Source data automation refers to

  1. A) using devices to capture transaction data in machine-readable form at the time the transaction is initiated.
  2. B) using the internet as the operating platform of an accounting information system.
  3. C) using an accounting information system to electronically bill customers.
  4. D) using an accounting information system to automate a previously manual transaction process.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

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

  1. A) input
  2. B) output
  3. C) storage
  4. D) purchasing

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) customer sale
  2. B) receipt of goods
  3. C) inventory purchase
  4. D) purchase request

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Analytic

 

2.3   Describe the ways information is stored in computer-based information systems.

 

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

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

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

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

  1. A) government coding regulations
  2. B) standardization
  3. C) future expansion needs
  4. D) ease of reporting

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

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

  1. A) The balances in a special journal must always reconcile to the general ledger.
  2. B) Special journals are used to record large numbers of repetitive transactions.
  3. C) Special journals are periodically summarized and posted to the general ledger.
  4. D) Special journals provide a specialized format for recording similar transactions.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) the payroll master file.
  2. B) a payroll transaction file.
  3. C) the employee master file.
  4. D) the employee transaction file.

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) the recording processes were accurate.
  2. B) all source documents were recorded.
  3. C) adjusting entries are not required.
  4. D) no errors exist in the subsidiary ledger.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

 

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

  1. A) dependent account.
  2. B) control account.
  3. C) credit account.
  4. D) attribute account.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) sequence codes.
  2. B) block codes.
  3. C) group codes.
  4. D) mnemonic codes.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

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

  1. A) sequence codes.
  2. B) block codes.
  3. C) group codes.
  4. D) mnemonic codes.

Answer:  B, C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) sequence codes.
  2. B) block codes.
  3. C) group codes.
  4. D) mnemonic codes.

Answer:  C, D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

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

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

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

11) To be effective, the chart of accounts must

  1. A) not use alpha-numeric characters.
  2. B) contain sufficient detail.
  3. C) utilize only one coding technique.
  4. D) begin with account 001.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) retained earnings.
  2. B) a drawing account.
  3. C) work-in-process.
  4. D) both A and C

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

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

  1. A) prenumbered source documents.
  2. B) specialized journals.
  3. C) posting references.
  4. D) subsidiary ledgers.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

14) A general journal

  1. A) would be used to record monthly depreciation entries.
  2. B) simplifies the process of recording large numbers of repetitive transactions.
  3. C) records all detailed data for any general ledger account that has individual sub-accounts.
  4. D) contains summary-level data for every account of the organization.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

15) The general ledger

  1. A) is used to record infrequent or non-routine transactions.
  2. B) simplifies the process of recording large numbers of repetitive transactions.
  3. C) records all detailed data for any general ledger account that has individual sub-accounts.
  4. D) contains summary-level data for every account of the organization.

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

16) A subsidiary ledger

  1. A) is used to record infrequent or non-routine transactions.
  2. B) simplifies the process of recording large numbers of repetitive transactions.
  3. C) records all detailed data for any general ledger account that has individual sub-accounts.
  4. D) contains summary-level data for every account of the organization.

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

17) A specialized journal

  1. A) is used to record infrequent or non-routine transactions.
  2. B) simplifies the process of recording large numbers of repetitive transactions.
  3. C) records all detailed data for any general ledger account that has individual sub-accounts.
  4. D) contains summary-level data for every account of the organization.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

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

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

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

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

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) database
  2. B) master file
  3. C) record
  4. D) transaction file

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) relational ledger.
  2. B) transaction file.
  3. C) master file.
  4. D) specific ledger.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Difficult

AACSB:  Reflective Thinking

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)

  1. A) entity.
  2. B) attribute.
  3. C) field.
  4. D) record.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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)

  1. A) entity.
  2. B) attribute.
  3. C) field.
  4. D) record.

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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)

  1. A) entity.
  2. B) attribute.
  3. C) field.
  4. D) record.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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)

  1. A) entity.
  2. B) attribute.
  3. C) field.
  4. D) record.

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) block code.
  2. B) group code.
  3. C) sequence code.
  4. D) data code.

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) sales transactions.
  2. B) monthly depreciation adjustments.
  3. C) annual closing entries.
  4. D) stock issuance transactions.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) employee master file
  2. B) employee transaction file
  3. C) special journal
  4. D) employee update file

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Difficult

AACSB:  Reflective Thinking

 

29) Which of the following statements is not correct?

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

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

30) Data about which of the following facets of a business activity is most likely to be recorded in a transaction file?

  1. A) business activity
  2. B) resources affected by the business activity
  3. C) people who participate in the business activity
  4. D) place the business activity occurs

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Difficult

AACSB:  Reflective Thinking

 

31) Data about all of the following facets of a business activity are most likely to be recorded in a master file except the

  1. A) business activity.
  2. B) resources affected by the business activity.
  3. C) people who participate in the business activity.
  4. D) place the business activity occurs.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Difficult

AACSB:  Reflective Thinking

 

32) Describe an audit trail.

Answer:  An audit trail provides a means to check the accuracy and validity of postings to the ledger. The posting references and document numbers help provide the audit trail. An audit trail exists when company transactions can be traced through the AIS from where it originated to where they end up on the financial statements

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

33) Explain how data is organized and stored in an AIS.

Answer:  The smallest unit of data is known as a data value. A data value is physically stored in a space called a field. Any number of fields can be grouped together to form a record. Related records are grouped together to form a file. Files are then combined to form a database.

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

34) Describe guidelines to follow for a well-designed coding system.

Answer:  First, the code should be consistent with its intended use. Second, the code should allow for growth in the number of items to be coded. The coding system should be as simple as possible. The coding system should be consistent with the company’s organizational structure and it should be consistent across the different divisions of an organization.

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

35) Describe the relationship between the general and subsidiary ledgers.

Answer:  The general ledger contains summary-level information about every asset, liability, equity, revenue, and expense account in an organization. The balances in general ledger accounts form the starting point for preparation of financial statements and various other financial reports. A subsidiary ledger account provides support for any general ledger account for which individual subaccounts (for example, accounts receivable, accounts payable, inventory, and fixed assets) are required. The subsidiary ledger records and maintains the detail-level information by having a separate record for each customer, vendor, inventory item, or fixed asset. The sum of the subsidiary ledger balances should equal the balance in the general ledger account. A general ledger account that corresponds to a subsidiary ledger account is known as a control account.

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

2.4   Discuss the types of information that an AIS can provide.

 

1) Which statement below regarding the AIS is false?

  1. A) The AIS must be able to provide managers with detailed and operational information about the organization’s performance.
  2. B) Both traditional financial measures and operational data are required for proper and complete evaluation of performance.
  3. C) The AIS was often just one of the information systems used by an organization to collect and process financial and nonfinancial data.
  4. 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.

Answer:  D

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) internal financial information.
  2. B) internal nonfinancial information.
  3. C) external financial information.
  4. D) external nonfinancial information.

Answer:  B

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Reflective Thinking

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

  1. A) monthly cash budget
  2. B) quality control system failures
  3. C) unit sales by territory and salesperson
  4. D) income statement

Answer:  B

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

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

  1. A) production stoppages.
  2. B) weekly credit and cash sales comparison.
  3. C) low inventory level.
  4. D) expense variances outside acceptable range.

Answer:  B

Objective:  Learning Objective 4

Difficulty:  Easy

AACSB:  Reflective Thinking

 

5) Which statement below regarding the AIS and managerial reports is false?

  1. A) The AIS is best utilized for financial data while the management information system is best utilized for operational data.
  2. B) The AIS must be able to provide managers with detailed operational information about the organization’s performance.
  3. C) Both financial and nonfinancial data are required for proper and complete evaluation of organizational performance.
  4. D) Most source documents capture both financial and nonfinancial data about business transactions.

Answer:  A

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

6) True or False:  Traditionally, accounting information systems have been used to collect, process, store and report non-financial information.

Answer:  FALSE

Objective:  Learning Objective 4

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) redundancies.
  2. B) discrepancies.
  3. C) integration issues.
  4. D) efficiency.

Answer:  D

Objective:  Learning Objective 4

Difficulty:  Difficult

AACSB:  Analytic

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

  1. A) reports.
  2. B) hard copy.
  3. C) soft copy.
  4. D) financials.

Answer:  B

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) reports.
  2. B) hard copy.
  3. C) soft copy.
  4. D) financials.

Answer:  C

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) income statement
  2. B) list of sales returns
  3. C) exception reports
  4. D) all of the above

Answer:  D

Objective:  Learning Objective 4

Difficulty:  Easy

AACSB:  Analytic

 

2.5   Discuss how organizations use enterprise resource planning (ERP) systems to process transactions and provide information.

 

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

  1. A) Alexis uses a computerized information system to keep track of all the financial data generated by her bakery. She is considering opening a new bakery on the east side of town.
  2. B) Betty has a system that keeps track of the accounts payable and receivable for her plumbing business. At the end of the year, the system helps her to prepare her taxes in just two hours.
  3. 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.
  4. D) Doug is a freelance photographer. He keeps records of all expenses and revenues on his cell phone and then e-mails them to himself every month. The files are stored on his personal computer and backed up to CD quarterly.

Answer:  C

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Reflective Thinking

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

  1. A) order to cash.
  2. B) purchase to pay.
  3. C) financial.
  4. D) customer relationship management.

Answer:  A

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) segregation of duties between custody, authorization, and recording
  2. B) data entry controls on validity and accuracy
  3. C) controls over access to data
  4. D) appropriate disposal of hard copy reports

Answer:  D

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Analytic

 

 

4) Describe four advantages and four disadvantages of implementing an ERP system at a multinational corporation.

Answer:

Advantages

Integrating information breaks down barriers between departments and streamlines the flow of information.

Data input is captured or keyed only once.

Management gains greater visibility into every area of the enterprise and has improved monitoring capabilities.

Better access control is established by consolidating multiple permissions and security models into a single data access structure.

Standardization of procedures and reports across business units.

Customer service improves as employees can quickly access data.

Increased productivity of employees.

 

Disadvantages

ERP systems are very costly.

Implementation is time consuming.

Changes to business processes are sometimes required, in order to minimize the customization needed.

Complexity of the system.

Employees may be resistant to implement and use an ERP system and change business processes.

Objective:  Learning Objective 5

Difficulty:  Easy

AACSB:  Analytic

5) ERP stands for

  1. A) enterprise resource planning.
  2. B) enterprise resource program.
  3. C) enterprise reporting program.
  4. D) none of the above

Answer:  A

Objective:  Learning Objective 5

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) order to cash.
  2. B) purchase to pay.
  3. C) financial.
  4. D) customer relationship management.

Answer:  B

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) order to cash.
  2. B) purchase to pay.
  3. C) manufacturing.
  4. D) logistics.

Answer:  C

Objective:  Learning Objective 5

Difficulty:  Easy

AACSB:  Analytic

 

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

  1. A) marketing.
  2. B) advertising.
  3. C) customer relationship management.
  4. D) customer service.

Answer:  C

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Analytic

 

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

  1. A) an ERP provides an integrated view of the organization’s data.
  2. B) ERP software and hardware can cost midsized companies between $10 million and $20 million dollars.
  3. C) ERPs frequently cause organizations to change their business processes to standardized ones.
  4. D) ERPs are relatively complex.

Answer:  A

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Analytic

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

  1. A) in an ERP, data input is captured or keyed once.
  2. B) ERPs permit management to gain greater visibility into every area of the enterprise.
  3. C) it takes considerable experience and training to use an ERP system effectively.
  4. D) ERPs permit manufacturing plants to receive new orders in real time.

Answer:  C

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Analytic

 

 

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

  1. A) employees may resist using the ERP system.
  2. B) ERPs can take years to fully implement.
  3. C) employees may refuse to share sensitive information with different departments.
  4. D) ERPs may require procedures and reports to be standardized across business units.

Answer:  D

Objective:  Learning Objective 5

Difficulty:  Difficult

AACSB:  Analytic

 

12) All of the following are ERP vendors except

  1. A) Dell.
  2. B) SAP.
  3. C) Oracle.
  4. D) Microsoft.

Answer:  A

Objective:  Learning Objective 5

Difficulty:  Difficult

AACSB:  Analytic

 

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

  1. A) selecting the best supplier by comparing bids.
  2. B) preparing a purchase order when inventory falls to reorder point.
  3. C) routing a purchase order to a purchasing agent for approval.
  4. D) communicating a purchase order to a supplier.

Answer:  A

Objective:  Learning Objective 5

Difficulty:  Moderate

AACSB:  Reflective Thinking

Accounting Information Systems, 13e (Romney/Steinbart)

Chapter 10   Processing Integrity and Availability Controls

 

10.1   Identify and explain controls designed to ensure processing integrity.

 

1) The best example of an effective payroll transaction file hash total would most likely be

  1. A) sum of net pay.
  2. B) total number of employees.
  3. C) sum of hours worked.
  4. D) total of employees’ social security numbers.

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

2) Error logs and review are an example of

  1. A) data entry controls.
  2. B) data transmission controls.
  3. C) output controls.
  4. D) processing controls.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

3) Following is the result of batch control totals on employee Social Security numbers in a payroll processing transaction:

 

Correct Values From Masterfile Values Entered During Processing
487358796 487358796
534916487 534916487
498374526 498374526
514873420 514873420
534196487 534916487
678487853 678487853
471230589 471230589
3719438158 3720158158

 

The difference in the control totals is 720,000. Which data entry control would best prevent similar data entry errors in the future?

  1. A) Modules 11
  2. B) validity check
  3. C) check digit
  4. D) sequence check

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

4) Which of the following data entry controls would not be useful if you are recording the checkout of library books by members?

  1. A) sequence check
  2. B) prompting
  3. C) validity check
  4. D) concurrent update control

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

 

5) A customer failed to include her account number on her check, and the accounts receivable clerk credited her payment to a different customer with the same last name. Which control could have been used to most effectively to prevent this error?

  1. A) closed-loop verification
  2. B) duplicate values check
  3. C) validity check
  4. D) reconciliation of a batch control total

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

6) If invoices are processed in groups of fifty, which fields from the document shown below would not be used to create a hash control total?

 

  1. A) Amount
  2. B) Item Number
  3. C) Quantity Ordered
  4. D) Sales Order number

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Reflective Thinking

 

 

7) ________ is a data entry input control that involves summing the first four digits of a customer number to calculate the value of the fifth digit, then comparing the calculated number to the number entered during data entry.

  1. A) Validity check
  2. B) Duplicate data check
  3. C) Closed-loop verification
  4. D) Check digit verification

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

8) All of the following controls for online entry of a sales order would be useful except

  1. A) check digit verification on the dollar amount of the order.
  2. B) validity check on the inventory item numbers.
  3. C) field check on the customer ID and dollar amount of the order.
  4. D) concurrent update control.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Difficult

AACSB:  Analytic

 

9) The inventory tracking system shows that 12 iPods were on hand before a customer brings three iPods to the register for purchase. The cashier accidentally enters the quantity sold as 30 instead of 3. Which data entry control would most effectively prevent this error?

  1. A) limit check
  2. B) sign check
  3. C) field check
  4. D) validity check

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

10) A payroll clerk accidently entered an employee’s hours worked for the week as 380 instead of 38. The data entry control that would best prevent this error would be

  1. A) a limit check.
  2. B) a check digit.
  3. C) batch total reconciliation.
  4. D) a field check.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

11) The data entry control that would best prevent entering an invoice received from a vendor who is not on an authorized supplier list is

  1. A) a validity check.
  2. B) an authorization check.
  3. C) a check digit.
  4. D) closed-loop verification.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

12) Form design is one example of a(n)

  1. A) output control.
  2. B) processing control.
  3. C) input control.
  4. D) data entry control.

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

13) Sequentially prenumbered forms are an example of a(n)

  1. A) data entry control.
  2. B) data transmission control.
  3. C) processing control.
  4. D) input control.

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

14) Turnaround documents are an example of a(n)

  1. A) data entry control.
  2. B) output control.
  3. C) processing control.
  4. D) input control.

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

15) A validity check is an example of

  1. A) a data entry control.
  2. B) an output control.
  3. C) a data transmission control.
  4. D) an input control.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

16) Parity checks are an example of a(n)

  1. A) data entry control.
  2. B) data transmission control.
  3. C) output control.
  4. D) processing control.

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

17) A user review an example of

  1. A) a data entry control.
  2. B) a data transmission control.
  3. C) an output control.
  4. D) a processing control.

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

18) Data matching is an example of a(n)

  1. A) data entry control.
  2. B) data transmission control.
  3. C) processing control.
  4. D) input control.

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

19) A batch total is an example of which control below?

  1. A) data entry control
  2. B) data transmission control
  3. C) processing control
  4. D) output control

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

20) Cancellation and storage of documents means

  1. A) documents are defaced and stored.
  2. B) documents are defaced before being shredded.
  3. C) cancellation data are copied from documents before they are stored.
  4. D) data are copied from a document and stored, after which the document is shredded.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

21) Check digit verification is an example of a(n)

  1. A) data transmission control.
  2. B) output control.
  3. C) processing control.
  4. D) input control.

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

22) A ________ ensures input data will fit into the assigned field.

  1. A) limit check
  2. B) size check
  3. C) range check
  4. D) validity check

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

23) This tests a numerical amount to ensure that it does not exceed a predetermined value nor fall below another predetermined value.

  1. A) completeness check
  2. B) field check
  3. C) limit check
  4. D) range check

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

24) This determines if all required data items have been entered.

  1. A) completeness check
  2. B) field check
  3. C) limit check
  4. D) range check

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

25) This determines the correctness of the logical relationship between two data items.

  1. A) range check
  2. B) reasonableness test
  3. C) sign check
  4. D) size check

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

26) This determines if characters are of the proper type.

  1. A) field check
  2. B) alpha-numeric check
  3. C) range check
  4. D) reasonableness test

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

27) This tests a numerical amount to ensure that it does not exceed a predetermined value.

  1. A) completeness check
  2. B) limit check
  3. C) range check
  4. D) sign check

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

28) This batch processing data entry control sums a field that contains dollar values.

  1. A) record count
  2. B) financial total
  3. C) hash total
  4. D) sequence check

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

29) This batch processing data entry control sums a non-financial numeric field.

  1. A) record count
  2. B) financial total
  3. C) hash total
  4. D) sequence check

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

30) When I enter a correct customer number, the data entry screen displays the customer name and address. This is an example of

  1. A) prompting.
  2. B) preformatting.
  3. C) closed-loop verification.
  4. D) error checking.

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

31) This control ensures that the correct and most current files are being updated.

  1. A) cross-footing balance test
  2. B) data matching
  3. C) file labels
  4. D) write-protect mechanism

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

32) This batch processing data entry control sums the number of items in a batch.

  1. A) financial total
  2. B) hash total
  3. C) record count
  4. D) sequence check

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

33) This data entry control compares the ID number in transaction data to a master file to verify that the ID number exists.

  1. A) reasonableness test
  2. B) user review
  3. C) data matching
  4. D) validity check

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

34) What control are file labels an example of?

  1. A) data entry controls
  2. B) output controls
  3. C) processing controls
  4. D) source data controls

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

35) A computer operator accidentally used the wrong master file when updating a transaction file. As a result, the master file data is now unreadable. Which control could best have prevented this from happening?

  1. A) Internal header label
  2. B) validity check
  3. C) check digit
  4. D) parity check

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

36) Sonja Greer called the IT Help Desk in a bad mood. “I’m trying to open an Excel file, but I get a message that says that the file is locked for editing. Why is this happening to me?” The answer is likely that

  1. A) the file is corrupted due to a computer virus.
  2. B) Sonja probably opened the file as read-only.
  3. C) concurrent update controls have locked the file.
  4. D) there is no problem. Sonja is editing the file, so it is locked.

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

37) This control protects records from errors that occur when two or more users attempt to update the same record simultaneously.

  1. A) concurrent update controls
  2. B) cross-footing balance test
  3. C) data conversion controls
  4. D) recalculation of batch totals

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

38) Modest Expectations Investment Services (MEIS) allows customers to manage their investments over the Internet. If customers attempt to sell more shares of a stock than they have in their account, an error message is displayed. This is an example of a

  1. A) reasonableness test.
  2. B) field check.
  3. C) validity check.
  4. D) limit check.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

39) Modest Expectations Investment Services (MEIS) allows customers to manage their investments over the Internet. If customers attempt to spend more money than they have in their account, an error message is displayed. This is an example of a

  1. A) reasonableness test.
  2. B) field check.
  3. C) validity check.
  4. D) limit check.

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

40) The Spontaneous Combustion Rocket Shoppe in downtown Fargo, North Dakota, generates three quarters of its revenue from orders taken over the Internet. The revenue clearing account is debited by the total of cash and credit receipts and credited by the total of storefront and Internet sales. This is an example of a

  1. A) data integrity test.
  2. B) zero-balance test.
  3. C) trial balance audit.
  4. D) cross-footing balance test.

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

41) This control entails verifying that the proper number of bits are set to the value 1 in each character received.

  1. A) echo check
  2. B) field check
  3. C) parity check
  4. D) trailer record

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

42) Which of the following is not a risk associated with the data input process?

  1. A) Data is invalid.
  2. B) Data is incomplete.
  3. C) Data is inaccurate.
  4. D) Data is corrupted.

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

 

43) Which of the following is an example of a turnaround document?

  1. A) a receipt a customer must use to return the goods purchased
  2. B) a telephone bill the customer must return with payment
  3. C) a paycheck stub that must be used in the employee’s tax return
  4. D) a customer loyalty card used every time a customer purchases goods or services

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

44) Which of the following is a control is an important way to prevent buffer overflow vulnerabilities?

  1. A) limit check
  2. B) size check
  3. C) range check
  4. D) field check

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Difficult

AACSB:  Analytic

 

45) Prompting is a control that helps ensure

  1. A) transaction data are not lost.
  2. B) transactions data are accurate.
  3. C) transactions data are complete.
  4. D) transaction data are valid.

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

10.2   Identify and explain controls designed to ensure systems availability.

 

1) What is the most effective way to ensure information system availability?

  1. A) high bandwidth
  2. B) maintain a hot site
  3. C) maintain a cold site
  4. D) frequent backups

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

 

2) Which of the following statements is true with regards to system availability?

  1. A) Human error does not threaten system availability.
  2. B) Threats to system availability can be completely eliminated.
  3. C) Proper controls can maximize the risk of threats causing significant system downtime.
  4. D) Threats to system availability include hardware and software failures as well as natural and man-made disasters.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

3) Which of the following is not an objective of a disaster recovery plan?

  1. A) Minimize the extent of the disruption, damage or loss.
  2. B) Permanently establish an alternative means of processing information.
  3. C) Resume normal operations as soon as possible.
  4. D) Train employees for emergency operations.

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

4) A disaster recovery plan typically does not include

  1. A) scheduled electronic vaulting of files.
  2. B) backup computer and telecommunication facilities.
  3. C) a system upgrade due to operating system software changes.
  4. D) uninterruptible power systems installed for key system components.

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

5) A facility that contains all the computing equipment the organization needs to perform its essential business activities is known as a

  1. A) cold site.
  2. B) hot site.
  3. C) remote site.
  4. D) subsidiary location.

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

6) A facility that is pre-wired for necessary telecommunications and computer equipment, but doesn’t have equipment installed, is known as a

  1. A) cold site.
  2. B) hot site.
  3. C) remote site.
  4. D) subsidiary location.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

7) When a computer system’s files are automatically duplicated on a second data storage system as they are changed, the process is referred to as

  1. A) real-time mirroring.
  2. B) batch updating.
  3. C) consistency control.
  4. D) double-secure storage.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

8) ________ enables a system to continue functioning in the event that a particular component fails.

  1. A) An incremental backup procedure
  2. B) Fault tolerance
  3. C) Preventive maintenance
  4. D) A concurrent update control

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

9) A copy of a database, master file, or software that will be retained indefinitely as a historical record is known as a(n)

  1. A) archive.
  2. B) cloud computing.
  3. C) differential backup.
  4. D) incremental backup.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

10) While this type of backup process takes longer than the alternative, restoration is easier and faster.

  1. A) archive
  2. B) cloud computing
  3. C) differential backup
  4. D) incremental backup

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

11) ________ involves copying only the data items that have changed since the last partial backup.

  1. A) Archive
  2. B) Cloud computing
  3. C) Differential backup
  4. D) Incremental backup

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

12) ________ copies all changes made since the last full backup.

  1. A) Archive
  2. B) Cloud computing
  3. C) Differential backup
  4. D) Incremental backup

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

13) The maximum amount of time between backups is determined by a company’s

  1. A) recovery time objective.
  2. B) recovery point objective.
  3. C) recovery objective.
  4. D) maximum time recovery objective.

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

 

14) The maximum acceptable down time after a computer system failure is determined by a company’s

  1. A) recovery time objective.
  2. B) recovery point objective.
  3. C) recovery objective.
  4. D) maximum time recovery objective.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

15) The accounting department at Synergy Hydroelectric records an average of 12,500 transactions per hour. By cost-benefit analysis, managers have concluded that the maximum acceptable loss of data in the event of a system failure is 25,000 transactions. If the firm’s recovery time objective is 120 minutes, then the worst case recovery time objective is

  1. A) 1 hour.
  2. B) 2 hours.
  3. C) 3 hours.
  4. D) 4 hours.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

16) The accounting department at Aglaya Telecom records an average of 5,000 transactions per hour. A cost-benefit analysis leads management to conclude that the maximum acceptable amount of data loss is 20,000 transactions. If the firm’s recovery time objective is 60 minutes, then the worst case recovery time objective is

  1. A) 1 hour.
  2. B) 2 hours.
  3. C) 3 hours.
  4. D) 4 hours.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

 

17) The accounting department at Aglaya Telecom records an average of 5,000 transactions per hour. By cost-benefit analysis, managers have concluded that the maximum acceptable loss of data in the event of a system failure is 50,000 transactions. The firm’s recovery point objective is therefore

  1. A) 50,000 transactions.
  2. B) 5,000 transactions.
  3. C) 10 hours.
  4. D) 4 hours.

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

18) The accounting department at Aglaya Telecom records an average of 2,500 transactions per hour. Managers state that the maximum acceptable loss of data in the event of a system failure is 2,500 transactions. The firm’s recovery point objective is therefore

  1. A) 2,500 transactions.
  2. B) 5,000 transactions.
  3. C) 1 hour.
  4. D) 2 hours.

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

19) Probably the most important change management control is

  1. A) monitoring user rights and privileges during the change process.
  2. B) testing all changes thoroughly prior to implementation on a stand-alone computer.
  3. C) updating all documentation to reflect changes made to the system.
  4. D) management’s careful monitoring and review.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

20) Identify the statement below which is true.

  1. A) Cloud computing is a control technique for system availability.
  2. B) Cloud computing eliminates the need for backup of applications and data.
  3. C) Cloud computing eliminates the need for companies to own their own software and servers.
  4. D) Cloud computing refers to the practice of storing application files and backup data on satellites “in the clouds.”

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

 

21) Discuss how cloud computing could both positively and negatively affect system availability.

Answer:  Cloud computing significantly reduces the risk that a single event would result in system unavailability, since the ‘cloud’ consists of banks of redundant servers, in multiple locations. However, since users don’t own the cloud, if a provider goes out of business, users may find it very difficult to access applications and data stored in the cloud. Additionally, users should evaluate the security and availability controls of the cloud provider before transacting business.

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

22) Define and contrast a recovery point objective and a recovery time objective.

Answer:  A recovery point objective is the maximum amount of time that a firm is willing to risk the possible loss of transaction data. A recovery time objective is the maximum amount of time that a firm is willing to risk losing access to its accounting information system due to disaster.

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

23) What is the primary objective of ensuring systems and information are available for use whenever needed?

  1. A) to minimize system downtime
  2. B) to minimize system expense
  3. C) to maximize system processing speed
  4. D) to maximize sales

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

24) True or False:  It is impossible to eliminate the risk of downtime.

Answer:  TRUE

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

 

25) With regards to systems availability, deploying and using multiple components provides an AIS with

  1. A) fault tolerance.
  2. B) cost savings.
  3. C) enhanced processing speed.
  4. D) maximum sales.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

26) Which of the following is not a common design feature of housing mission-critical servers and databases?

  1. A) adequate air-conditioning systems to reduce the likelihood of damage due to overheating
  2. B) overhead sprinklers to provide protection from fire
  3. C) cables with special plugs that cannot be easily removed
  4. D) surge-protection devices to provide protection against temporary power fluctuations

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

27) To protect against malware, it is important that antivirus software automatically examine ________ introduced into a system.

  1. A) CDs
  2. B) e-mail
  3. C) flash drives
  4. D) all of the above

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

28) Which of the following is a key control regarding the minimization of system downtime?

  1. A) fault tolerance
  2. B) disaster recovery plans
  3. C) backup procedures
  4. D) all of the above

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

29) Which COBIT5 management practice addresses system backup procedures?

  1. A) DSS01.06
  2. B) DSS04.07
  3. C) DSS03.05
  4. D) DSS04.04

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Analytic

 

30) Whose responsibility is it to determine the amount of time an organization can afford to be without its information system?

  1. A) the board of directors
  2. B) senior management
  3. C) external auditors
  4. D) COBIT

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

31) Is it best practice for an organization to practice periodically restoring a system from its backup files?

  1. A) No, doing so might introduce errors into the system’s data.
  2. B) No, doing so takes the system offline and prevents customers from being able to access the system.
  3. C) Yes, doing so verifies the procedure and backup media are working correctly.
  4. D) Yes, doing so improves the efficiency of the system.

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

32) True or False:  Best practice requires backups be retained indefinitely.

Answer:  FALSE

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

 

33) Which of the following is incorrect with regards to a data archive?

  1. A) Archives can be a copy of a database.
  2. B) Archives should be stored in different locations.
  3. C) Archives are usually encrypted.
  4. D) Physical and logical controls are the primary means of protecting archive files.

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Analytic

34) Loreen Tina is the chief lawyer for Tamara Incorporated. The CEO of Tamara Incorporated asks Loreen whether the company should periodically delete all company e-mail. If Loreen is well-versed in AIS best practices, she would mostly likely respond,

  1. A) Yes, if we are ever sued, the other attorney will not be able to comb through our e-mail for evidence.
  2. B) Yes, since e-mail requires a lot of storage space, deleting it periodically will reduce the amount of information we need to store.
  3. C) No, deleting an organization’s e-mail is against the law.
  4. D) No, if we are ever sued we will not be able to draw upon our e-mail records to defend ourselves.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

35) Identify the most important component of a disaster recovery plan below.

  1. A) documentation
  2. B) operating instructions
  3. C) periodic testing
  4. D) on-site and off-site storage

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

36) Identify one organization that quickly recovered from September 11th, 2001 due to its disaster recovery and business continuity plan.

  1. A) New York Stock Exchange
  2. B) NASDAQ
  3. C) New York Fire Department
  4. D) United Airlines

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

Accounting Information Systems, 13e (Romney/Steinbart)

Chapter 22   Systems Design, Implementation, and Operation

 

22.1   Discuss the conceptual systems design process and the activities in this phase.

 

1) In which phase of the SDLC does developing a general framework for implementing user requirements occur?

  1. A) conceptual systems design
  2. B) implementation and conversion
  3. C) operations and maintenance
  4. D) physical design

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

2) The ________ is responsible for evaluating the design alternatives and selecting the one that best meets the organization’s needs.

  1. A) design team
  2. B) implementation committee
  3. C) steering committee
  4. D) systems analysts

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

3) Which of the following lists represent the sequence of elements in developing the conceptual design specifications?

  1. A) input, data storage, processing procedures and operations, and output
  2. B) input, output, data storage, and processing procedures and operations
  3. C) output, data storage, input, and processing procedures and operations
  4. D) processing procedures and operations, input, data storage, and output

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

 

4) Which element of design specification will help the project team find an efficient way to collect data for preparing sales reports?

  1. A) data collection
  2. B) input
  3. C) output
  4. D) processing procedures

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

5) One of the purposes of the ________ is to guide physical systems design activities.

  1. A) conceptual systems design report
  2. B) physical systems design report
  3. C) program design
  4. D) systems analysis report

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

6) Deciding how often a certain report should be provided to users is part of which conceptual design specification element?

  1. A) data storage
  2. B) input
  3. C) output
  4. D) processing procedures and operations

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

7) Which of the following is not a reason for preparing the conceptual systems design report?

  1. A) It can be used to guide physical systems design activities.
  2. B) It communicates how management and user information needs will be met.
  3. C) It discusses the design alternatives that were not selected for the project.
  4. D) It helps the steering committee assess system feasibility.

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

8) Which consideration below is not considered important to output design?

  1. A) format
  2. B) location
  3. C) medium
  4. D) source

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

9) How can accountants help in the systems development life cycle (SDLC) process?

Answer:  Accountants must first understand the development process, and then realize that they can make a valuable contribution to the development process in several ways. As users, accountants can specify their needs and help explain such needs to the development team. As members of the development team, they can provide valuable input throughout the design and development process. As auditors, they can perform attest functions with a greater working knowledge and enhanced skill sets. Accountants should keep the project on track by evaluating and measuring benefits, monitoring costs, and helping to maintain the timetable.

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

10) What factors does a steering committee consider when evaluating different system designs?

Answer:  How well does the design meet organizational and systems objectives? How well does the design meet users’ needs? How economically feasible is the design in terms of costs versus benefit? What are the advantages and disadvantages of the design? Do the advantages outweigh the disadvantages?

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

11) What are the purposes of a conceptual systems design report?

Answer:  The purposes of this report are to a) guide physical systems design activities, b) communicate how management and user information needs will be met, and c) help the steering committee assess system feasibility.

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

 

12) Describe the conceptual systems design phase and identify the elements of conceptual design specifications.

Answer:  The conceptual systems design phase involves the development of the general framework for implementing user requirements and solving problems identified in the analysis phase. Conceptual design elements include the following elements: Output specifications to meet users’ information needs. Data storage specifications based on reports that need to be produced, the manner in which data are stored (sequential, random, etc.), the type of database to use, and appropriate field sizes. Input specification after output is identified so that the “when, where, and how” of data input are appropriate for the types of output needed. Processing procedures and operations specifications are determined after the sequencing and processes for input and data storage are known.

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Analytic

 

13) Which of the below standards should not be used to evaluate design alternatives in the conceptual systems design stage of the SDLC?

  1. A) how well a system meets organizational objectives
  2. B) how well a system meets user needs
  3. C) the economic feasibility of each alternative
  4. D) the amount of time it required to formulate each alternative

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

14) The project committee for ALDI corporation is attempting to evaluate design alternatives proposed for a new, organization-wide accounting information system. However, there is a great deal of debate regarding whether source documents, turnaround documents, or source data automation should be utilized in the new system. Which design consideration is most appropriately associated with these alternatives?

  1. A) communication channels
  2. B) data storage structure
  3. C) file organization and access
  4. D) input medium

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

15) The project committee for ALDI corporation is attempting to evaluate design alternatives proposed for a new, organization-wide accounting information system. However, there is a great deal of debate regarding whether the system should interface via telephone, internet, cable, or satellite. Which design consideration is most appropriately associated with these alternatives?

  1. A) communication channels
  2. B) data storage structure
  3. C) file organization and access
  4. D) input medium

Answer:  A

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

16) The project committee for ALDI corporation is attempting to evaluate design alternatives proposed for a new, organization-wide accounting information system. However, there is a great deal of debate regarding whether the system should be standardized on using tapes, disks, hard drives, or paper. Which design consideration is most appropriately associated with these alternatives?

  1. A) communication channels
  2. B) data storage structure
  3. C) file organization and access
  4. D) input medium

Answer:  B

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

17) The project committee for ALDI corporation is attempting to evaluate design alternatives proposed for a new, organization-wide accounting information system. However, there is a great deal of debate regarding whether accessing data access should be random, sequential, or indexed. Which design consideration is most appropriately associated with these alternatives?

  1. A) communication channels
  2. B) data storage structure
  3. C) file organization and access
  4. D) input medium

Answer:  C

Objective:  Learning Objective 1

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

18) The project committee for ALDI corporation just finished evaluating the design alternatives for a new, organization-wide accounting information system. and has selected a design. Now, the project committee needs to create conceptual design specifications for which of the following elements below?

  1. A) output
  2. B) data storage
  3. C) processing and operations
  4. D) all of the above

Answer:  D

Objective:  Learning Objective 1

Difficulty:  Easy

AACSB:  Analytic

 

22.2   Discuss the physical systems design process and the activities in this phase.

 

1) Identify the report below that does not have a pre-specified content and format design.

  1. A) demand reports
  2. B) scheduled reports
  3. C) special-purpose analysis reports
  4. D) triggered exception reports

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

2) It is important that ________ for data storage purposes.

  1. A) all data is in compatible format
  2. B) there is easy access to the system
  3. C) a printout of the data dictionary is available
  4. D) copies of necessary reports are available

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

3) Physical input design considerations include

  1. A) which transactions to enter.
  2. B) layout of source documents.
  3. C) types of data input and optimal input methods.
  4. D) cost of collecting and storing data.

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

 

4) Program design

  1. A) spans all five stages of the system development life cycle.
  2. B) includes writing computer code.
  3. C) includes debugging logic errors.
  4. D) is described by all the above.

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

5) Which of the following statements below is correct about modules of computer code created during program design?

  1. A) Modules interact with each other directly and also through the control module.
  2. B) Modules interact with each other directly.
  3. C) Modules interact with only the control module.
  4. D) Modules primarily, but not always, interact with the control module.

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

6) Which of the following statements is true?

  1. A) Structured programming divides programs into well-defined segments to reduce complexity.
  2. B) Structured programming is used to debug logic errors in programs.
  3. C) Structured programming is accomplished by using a flowchart to guide design.
  4. D) Structured programming pieces together standard code strings into a completed program.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

7) Identify the question that is not an important consideration in procedures and controls design.

  1. A) Are customer data stored in alphabetical order in a master file?
  2. B) Are payments made only to legitimate vendors?
  3. C) Are data processed and stored accurately?
  4. D) Can the system be modified without affecting system availability?

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Analytic

 

8) Which of the following control considerations will help ensure that all cash disbursements are made only to legitimate vendors?

  1. A) security
  2. B) accuracy
  3. C) authorization
  4. D) validity

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

9) Which of the following controls design considerations will help ensure that all customer inquiries are answered in real-time?

  1. A) security
  2. B) authorization
  3. C) accuracy
  4. D) audit trail

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

10) At what point in the systems development life cycle does the company determine how the conceptual AIS design is to be implemented?

  1. A) the conceptual design phase
  2. B) the implementation and conversion phase
  3. C) the physical design phase
  4. D) the systems analysis phase

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

11) What of the below is the most time-consuming activity in the physical design stage of the systems development life cycle (SDLC)?

  1. A) controls design
  2. B) input design
  3. C) output design
  4. D) program design

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

 

12) Which of the following is a consideration during file and database design?

  1. A) form size
  2. B) format
  3. C) medium
  4. D) organization

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

13) The first step in program design is to

  1. A) determine user needs.
  2. B) develop a plan.
  3. C) hire program users.
  4. D) write program instructions.

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

14) Flowcharts, record layouts, and decision tables are all often part of

  1. A) determining user needs.
  2. B) documenting the program.
  3. C) testing the program.
  4. D) training program users.

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

15) ________ is a process used to uncover and eliminate program errors.

  1. A) Black box testing
  2. B) Debugging
  3. C) Desk checking
  4. D) White box testing

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

 

16) What is used as the basis for management to make a “go/no go” decision regarding whether to proceed from the physical design phase to the implementation and conversion phase of the systems development life cycle?

  1. A) conceptual system design report
  2. B) physical systems design report
  3. C) systems design report
  4. D) implementation planning design report

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

17) Subdividing program code into small, well-defined modules is

  1. A) called debugging.
  2. B) known as structured programming.
  3. C) part of program maintenance.
  4. D) done during testing.

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

18) Yasin, a professional in information technology services, received an e-mail from Adil in the Sales Department. The e-mail read: “Yasin, I need you to run that inventory report you prepared for me last month again. Please send it to me by e-mail. Thank you, Adil.” What type of report is Adil asking Yasin to provide?

  1. A) scheduled report
  2. B) special-purpose analysis report
  3. C) triggered exception report
  4. D) demand report

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

19) Yasin, a professional in information technology services, sent an e-mail to Mauqwa in the Purchasing department. The e-mail read “Mauqwa, the system just generated a stock-out report. I just wanted to give you a heads up. I’m sending it right over. Best regards, Yasin” What type of report is Yasin providing to Mauqwa?

  1. A) scheduled report
  2. B) special-purpose analysis report
  3. C) triggered exception report
  4. D) demand report

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

20) Yasin, a professional in information technology services, received an e-mail from Sabri in the Sales department. The e-mail read:  “Yasin, I need you to do something for me. Query sales data for the second quarter and pull out all of the invoices that include iPhones selling with a discount. I need a count and the total amount of the discount. Thanks, Sabri.” What type of report is Sabri asking Yasin to prepare?

  1. A) scheduled report
  2. B) special-purpose analysis report
  3. C) triggered exception report
  4. D) demand report

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

21) Ghassan in Marketing received an e-mail from Asif at regional headquarters. “Ghassan, I just reviewed the annual sales report for your district. You blew your sales goal away again, you top gun!” What type of report did Asif use?

  1. A) scheduled report
  2. B) special-purpose analysis report
  3. C) triggered exception report
  4. D) demand report

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

22) Describe at least four considerations during controls design.

Answer:  Controls design ensures the effectiveness, efficiency, and accuracy of the AIS. The important concerns to be addressed are: validity of transactions — authorization of input, storage, and output activities — accuracy of input and processing activities — security access to system — numerical control pre-numbering and accounting of all documents — audit trail — tracing of transactions from source documents to final output and vice versa — availability of the system when needed — maintainability so the system can be modified without affecting availability or security — integrity

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

 

23) What output design considerations should be analyzed as part of the physical system design phase?

Answer:  Two things must be considered regarding system output. First, who will use the output? Why do users need this type of output, and what decisions will be made based on such output? Second, the medium of the output must be addressed. What medium should be used? Should the output be on paper, computer screen, stored as a voice response file, placed on diskette, microfilm, or some possible combinations of these mediums? These are two important considerations that can either “make or break” a system in terms of its successful use. Other considerations are: What format (table, graph, etc.)? Should preprinted forms be used? Where should the output be sent? Who should have access to the output? How often should the output be produced? Lengthy output should be preceded by an executive summary and a table of contents.

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

24) Describe structured programming.

Answer:  Structured programming refers to programs that are subdivided into small, well-defined modules with the goal of reducing complexity and enhancing reliability and modifiability. Each module should interact with a control module rather than with each other. Proper structured programming dictates that each module should have only one entry and exit point to facilitate testing and modification.

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

25) What is the objective of output design? What are the output design considerations? What are the various categories of outputs?

Answer:  Output design: The objective is to determine the nature, format, content, and timing of printed reports, documents, and screen displays.

Design considerations: Use — who will use, why is it needed, what is needed for use. Medium — paper, screen, diskette. Format — tables, graphs, narratives. Preprinted — e.g., purchase orders, checks. Location — where sent. Access — by whom and to what. Detail — summary, table of contents, headings. Timeliness — how often.

Categories of output are: Scheduled reports are prespecified and formatted and prepared regularly. Special-purpose analyses are not prespecified or formatted, but are prepared when management requests data to evaluate an issue. Triggered exception reports are prespecified and formatted and prepared in event of abnormal conditions. Demand reports are prespecified and formatted and prepared when requested.

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

 

26) Write one question that should be asked about each of the controls design considerations.

Answer:  There are several controls design considerations to be addressed in this phase of the SDLC. Validity, authorization, accuracy, access, numerical control, and providing an audit trail are the major items, which must be taken into account in physical design. Validity would address a question such as, “Are all system interactions valid?” Authorization could be examined by asking, “Are input, processing, storage, and output activities authorized by the appropriate managers?” Accuracy can be analyzed by asking, “Is input verified to ensure accuracy and what controls are in place to ensure that data passed between processing activities is not lost?” When dealing with access issues, the analyst should ask if there is adequate control over accessing data, and ask the important question, “How is a hacker denied access to a data file?” Asking the question, “Are documents pre-numbered to prevent errors or intentional abuse?” can provide insight about numerical controls. Finally, to provide appropriate audit trails, the analyst should ask the question, “Can transaction data be traced from source documents to final output, and vice versa?” It is imperative that controls design be properly implemented in this phase of the SDLC to ensure the success of launching the system and its ongoing use. Also, availability and integrity.

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Reflective Thinking

27) Describe the eight basic steps in program design.

Answer:  Generally speaking, developers use an eight-step method to develop and test software programs. As part of the systems implementation phase of the SDLC, it is important that these steps faithfully are followed by the development team. 1) The team should consult with users and write an agreement about software requirements as a way to determine user needs. 2) Next, a development plan should be created and documented. 3) The overall approach and major processing tasks should be identified on a high level before proceeding to levels of greater detail. At that point the activity of writing program instructions can begin. 4) After program code has been written, the next step is to test the program. This can be achieved in part through debugging and desk checking, along with other types of testing. 5) The next thing to be done is to document the program, since this will explain how the program works and assist analysts in correcting and resolving errors. 6) Training program users is the beginning of the end of the test phase. Program documentation developed in step five will be used at this time. 7) The seventh step is to install and use the system. At this point the program can be used and program maintenance can take place as needed. 8) Use and modify the system. Revise existing programs (called program maintenance).

Objective:  Learning Objective 2

Difficulty:  Difficult

AACSB:  Analytic

 

 

28) Identify the element below that is not an objective of the output design phase of the physical systems design stage of the SDLC.

  1. A) determining the nature of reports
  2. B) determining the timing of reports
  3. C) determining the content of reports
  4. D) determining the cost of reports

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

 

29) Identify a control commonly used by organizations during the output design phase of the physical systems design stage of developing a new system to avoid expensive time delays later in the SDLC process.

  1. A) requiring management to test the system before proceeding
  2. B) requiring programmers to alert the project team when they are exceeding their allocated time budgets
  3. C) requiring the development team to take time-off so that they do not become fatigued
  4. D) requiring users to sign a document stating the output form and content are acceptable

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Analytic

30) The project development committee for Photomat Incorporated is discussing output design alternatives for a new, organization-wide accounting information system. There is a heated debate among the team regarding which departments should be given the quarterly sales report. Mark prefers that only management and accounting receive the report, while Jan prefers that management, accounting, and the sales departments receive the report. What output design consideration is the team debating?

  1. A) Use
  2. B) Medium
  3. C) Format
  4. D) Location

Answer:  A

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

31) The project development committee for Photomat Incorporated is discussing output design alternatives for a new, organization-wide accounting information system. There is a heated debate among the team regarding whether the quarterly sales report be printed on paper, be viewable only on-screen, or be distributed as an e-mail. Mark prefers the report be printed on paper, while Jan prefers the report be distributed via e-mail to save trees. What output design consideration is the team debating?

  1. A) Use
  2. B) Medium
  3. C) Format
  4. D) Location

Answer:  B

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

32) The project development committee for Photomat Incorporated is discussing output design alternatives for a new, organization-wide accounting information system. There is disagreement among the team regarding whether the quarterly sales numbers be disclosed in a narrative, displayed as a table, or appear in a bar chart. What output design consideration is the team discussing?

  1. A) Use
  2. B) Medium
  3. C) Format
  4. D) Location

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

33) The project development committee for Photomat Incorporated is discussing output design alternatives for a new, organization-wide accounting information system. The project development committee has decided that all reports will be printed on paper. However, there is disagreement regarding where the reports should be made available. John wants the sales reports to be printed and stored in the accounting department for greatest security. Monica wants the sales reports to be printed in every department for full disclosure. What output design consideration are John and Monica discussing?

  1. A) Use
  2. B) Medium
  3. C) Format
  4. D) Location

Answer:  D

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

 

34) True or False:  Although most systems are moving away from using paper documents, form design is still an important consideration in system development.

Answer:  TRUE

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

35) True or False:  It is more efficient to enter data on paper, then enter the data into the system compared to requiring users to enter data directly into the system without using a paper source document.

Answer:  FALSE

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Analytic

 

36) Approximately what portion of software development costs should be allocated to testing, debugging, and rewriting software?

  1. A) None. It is important to put controls in place so that development occurs without errors that require correcting.
  2. B) between 5% and 15%
  3. C) between 20% and 30%
  4. D) at least 35%, but no more than 50%

Answer:  C

Objective:  Learning Objective 2

Difficulty:  Moderate

AACSB:  Reflective Thinking

 

37) True or False:  If developers took the time to find and correct every program flaw, they would risk not getting the system completed on time.

Answer:  TRUE

Objective:  Learning Objective 2

Difficulty:  Easy

AACSB:  Reflective Thinking

22.3   Discuss the systems implementation and conversion process and the activities in this phase.

 

1) ________ is the process of installing hardware and software and getting the AIS up and running.

  1. A) Conceptual design
  2. B) Physical design
  3. C) Systems analysis
  4. D) Systems implementation

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

2) Effective AIS training involves

  1. A) instruction on new hardware and software.
  2. B) orientation to new policies and operations.
  3. C) planning and scheduling so it occurs before system testing and conversion.
  4. D) All of the above are correct.

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

3) Step-by-step reviews of procedures or program logic early in the system design that focus on inputs, files, outputs, and data flows are called

  1. A) acceptance tests.
  2. B) operating tests.
  3. C) processing of test transactions.
  4. D) walk-throughs.

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

4) The ________ is responsible for identifying such risk factors in an implementation plan.

  1. A) implementation team
  2. B) steering committee
  3. C) systems analysis team
  4. D) systems development team

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

5) Within the implementation planning and conversion phase of the systems development life cycle, analysts must ________ before they can ________.

  1. A) complete documentation; test software programs
  2. B) install and test software; test software programs
  3. C) test software programs; test the system
  4. D) test the system; select and train personnel

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

 

6) Several types of documentation must be prepared for a new system. The type of documentation that includes the files and databases accessed and file retention requirements is called

  1. A) development documentation.
  2. B) operations documentation.
  3. C) reference documentation.
  4. D) user documentation.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

7) ________ is a system test that determines whether a program is operating as designed.

  1. A) An acceptance test
  2. B) A debugging test
  3. C) A test data processing
  4. D) A walk-through

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

8) A(n) ________ system test uses copies of real transaction and file records.

  1. A) acceptance test
  2. B) debugging test
  3. C) test data processing
  4. D) walk-through

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

9) In a ________, the old and the new systems are operated simultaneously for a period of time.

  1. A) direct conversion
  2. B) parallel conversion
  3. C) phase-in conversion
  4. D) pilot conversion

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

10) Implementing a new system at a branch location before company-wide adoption is called

  1. A) direct conversion.
  2. B) parallel conversion.
  3. C) phase-in conversion.
  4. D) pilot conversion.

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

11) Which of the following activities is not part of data conversion?

  1. A) changing data content
  2. B) moving file servers
  3. C) changing file formats
  4. D) moving files to a new storage medium

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

12) What type of conversion terminates the old system as soon as the new system is ready?

  1. A) direct conversion
  2. B) parallel conversion
  3. C) phase-in conversion
  4. D) pilot conversion

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

13) Which of the following describes a phase-in conversion?

  1. A) Both the old and new AIS are operated simultaneously.
  2. B) Elements of the old AIS are replaced gradually with elements of the new AIS.
  3. C) The new AIS is introduced into a segment, rather than the whole organization.
  4. D) The old AIS is terminated as the new AIS is introduced.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

 

14) Which of the following is the final step in the data conversion process?

  1. A) data conversion
  2. B) testing the system
  3. C) documentation of conversion activities
  4. D) monitoring of the system after data conversion

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

15) Which of the following is not one of the ways data may need to be modified during data conversion?

  1. A) resolve data inconsistencies
  2. B) validate new files
  3. C) identify files to be converted
  4. D) remove unnecessary fields from data files

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

16) Walk-throughs are system tests that involve

  1. A) managers observing the operation of the system by “walking through” the IT department.
  2. B) processing hypothetical data that are designed to identify errors in the system.
  3. C) processing copies of real transactions in order to determine whether or not the system meets requirements.
  4. D) a thorough review of the procedures and program logic of the system.

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

17) Acceptance tests involve

  1. A) managers observing the operation of the system by “walking through” the IT department.
  2. B) processing hypothetical data that are designed to identify errors in the system.
  3. C) processing copies of real transactions in order to determine whether or not the system meets requirements.
  4. D) a thorough review of the procedures and program logic of the system.

Answer:  C

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

 

18) Processing test data involves

  1. A) managers observing the operation of the system by “walking through” the IT department.
  2. B) processing hypothetical data that are designed to identify errors in the system.
  3. C) processing copies of real transactions in order to determine whether or not the system meets requirements.
  4. D) a thorough review of the procedures and program logic of the system.

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

19) Which of the following is not one of the types of documentation that should be prepared for a new system?

  1. A) management
  2. B) operations
  3. C) user
  4. D) development

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

20) Which of the following is the most costly and least risky method of converting from one system to another?

  1. A) direct
  2. B) parallel
  3. C) pilot
  4. D) phase-in

Answer:  B

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

21) Which of the following is the least costly and most risky method of converting from one system to another?

  1. A) direct
  2. B) parallel
  3. C) pilot
  4. D) phase-in

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

 

22) What is systems implementation? How do you plan for it?

Answer:  Systems implementation is the process of installing hardware and software and getting the AIS in place and in use. Systems planning consists of: Implementation tasks and person(s) responsible for tasks. Setting expected completion dates. Cost estimates and variances. Identify risk factors that decrease likelihood of successful implementation. Strategies for coping with risk factors.

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

23) Describe the different types of documentation that should be prepared for a new system.

Answer:  Development documentation includes system description; copies of output, input and file and database layouts; program flowcharts; test results; and user acceptance forms. Operations documentation includes operating schedules; files and databases accessed; and equipment, security and file retention requirements. User documentation includes procedures manuals and training materials.

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

24) Describe the different methods of testing a system.

Answer:  Walkthroughs, which involve systematic reviews of procedures or program logic at different phases during the SDLC. In the early stages of the design process, the focus is inputs, outputs, and files. In the later stages, the focus is on program logic and structure. Processing test transactions to determine whether a program operates as designed. Different types of hypothetical transactions are processed to see if the controls catch various types of errors. Acceptance tests, which use real transactions and file records. Users develop the acceptance criteria and make the final acceptance or rejection decision.

Objective:  Learning Objective 3

Difficulty:  Easy

AACSB:  Analytic

 

25) Describe the approaches to system conversion.

Answer:  Direct conversion is used when the old system is of no value or is not comparable to the new system. This type of conversion carries a high risk of failure. Parallel conversion protects the company from error, but it is costly and stressful to process transactions twice. Phase-in conversion results in gradual changes over time that also allows resources to be acquired over time. However, creating temporary interfaces is costly and gradual changes take time and come at greater expense. Pilot conversion implements the system in just one part of the organization that allows problems to be corrected before the system is completely adopted. However, the costs of interfaces and running both systems are a disadvantage.

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

 

26) Identify the item below that is not generally part of an implementation plan.

  1. A) implementation tasks
  2. B) expected completion dates
  3. C) cost estimates
  4. D) budgeted savings

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

27) Which of the following is not generally changed when a company’s accounting information system is changed?

  1. A) employee compensation
  2. B) the organization’s structure
  3. C) employee headcount
  4. D) All of the above are generally changed.

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

28) Which of the following control design considerations is concerned with whether data processing is complete, accurate, timely, and authorized?

  1. A) integrity
  2. B) security
  3. C) validity
  4. D) audit trail

Answer:  A

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

29) Ideally, employees should receive training on a new system

  1. A) as soon as possible.
  2. B) right after the physical design.
  3. C) during implementation planning.
  4. D) just before system testing and conversion.

Answer:  D

Objective:  Learning Objective 3

Difficulty:  Moderate

AACSB:  Analytic

 

 

22.4   Discuss the systems operation and maintenance process and the activities in this phase.

 

1) Changing tax rates in a software program would be accomplished in the ________ phase of the systems development life cycle.

  1. A) maintenance
  2. B) operations
  3. C) program design
  4. D) implementation

Answer:  A

Objective:  Learning Objective 4

Difficulty:  Easy

AACSB:  Analytic

 

2) Which factor is not investigated during the post-implementation review?

  1. A) accuracy
  2. B) benefits
  3. C) completion
  4. D) costs

Answer:  C

Objective:  Learning Objective 4

Difficulty:  Easy

AACSB:  Analytic

3) Which of the following is the final activity in the systems development life cycle?

  1. A) monitoring of the system
  2. B) ongoing maintenance activities
  3. C) preparation of the post-implementation review report
  4. D) user acceptance of the post-implementation review report

Answer:  D

Objective:  Learning Objective 4

Difficulty:  Easy

AACSB:  Analytic

 

4) An analyst who asks the question, “Does the system produce actual and complete data?” is investigating what post implementation factor?

  1. A) accuracy
  2. B) compatibility
  3. C) goals and objectives
  4. D) reliability

Answer:  A

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Analytic

 

 

5) Performing revisions to existing program code is an example of

  1. A) debugging.
  2. B) structured programming.
  3. C) program maintenance.
  4. D) walk through.

Answer:  C

Objective:  Learning Objective 4

Difficulty:  Easy

AACSB:  Analytic

 

6) Describe the post-implementation review activity.

Answer:  A post-implementation review ensures that the new AIS meets planned objectives. Any problems uncovered during the review are brought to the attention of the management and the necessary adjustments are made. When review is complete, prepare a report. The acceptance of the post-implementation review report by users concludes the systems development process. Control of the AIS now passes on to the data processing department.

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Analytic

 

7) Over the entire life of a typical system, approximately ________ of the work takes place during development and ________ of the work takes place on software modifications and updates.

  1. A) 30%; 70%
  2. B) 40%; 60%
  3. C) 50%; 50%
  4. D) 60%; 40%

Answer:  A

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Analytic

8) Post implementation review is conducted to

  1. A) determine whether a new system meets its planned objectives.
  2. B) determine how well the project team performed in developing the new system.
  3. C) prioritize future modifications to the system.
  4. D) provide external auditors assurance that a new system has been placed into service.

Answer:  A

Objective:  Learning Objective 4

Difficulty:  Moderate

AACSB:  Analytic

 

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