1) An REA diagram for the production cycle models the relationships between the Perform Job Operations event and the Job Operations List entity as 1:N because
A) time standards change over time
B) one specific activity has only one standard time for completion
C) activities are only performed once on work in process jobs
D) many activities are usually required for specific work in process jobs

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2) All of the following are controls that should be implemented in a payroll process, except
A) supervisors distribute paychecks since they should know all employees in their department
B) someone independent of the payroll process should reconcile the payroll bank account
C) sequential numbering of paychecks and accounting for the numbers
D) restrict access to blank payroll checks and documents

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3) ________ is an efficient way to track and process information about raw materials used in production.
A) A just-in-time inventory system
B) Identifying materials with bar codes or RFID tags
C) A materials resources planning inventory system
D) Job-order costing

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4) It is industry standard to model relationships as ________ in entity-relationship diagrams.
A) rectangles
B) ovals
C) diamonds
D) there is no industry standard

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5) The ________ is not a transaction cycle.
A) general ledger and reporting cycle
B) expenditure cycle
C) revenue cycle
D) human resources cycle

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6) Why does COBIT5 DSS-05.06 stress the importance of restricting physical access to network printers?
A) because hackers can use them to print out sensitive information
B) because hackers often hide inside large network printers until night
C) because document images are often stored on network printers
D) because network printers are easier to hack into than computers

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7) Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: “The data you have entered does not include a source reference code. Please enter this data before saving.” This is an example of a
A) validity check
B) field check
C) zero-balance check
D) completeness test

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8) Cornelia Cassidy is a telecom equipment sales representative. Her company has provided her with a laptop computer that uses wireless connectivity to access the accounting information system from virtually anywhere in the country. She, and other sales reps, have access to view customer and product information. All sales reps also have access that allows them to enter and cancel customer orders. The permissions for Cornelia define a ________ in the company’s database management system.
A) conceptual-level schema
B) subschema
C) data dictionary
D) physical view

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9) Which type of payroll report lists the voluntary deductions for each employee?
A) payroll register
B) deduction register
C) earnings statement
D) federal W-4 form

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10) A monthly statement sent to customers serves a control purpose by
A) providing an opportunity for customers to verify the balance owed and activity on the account
B) triggering the process to record a customer payment
C) summarizing invoices and amounts due for customers
D) reminding customers of the balance due and due date

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11) 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?
A) Use
B) Medium
C) Format
D) Location

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12) The reasons for ________ are to simplify the decision-making process, reduce errors, provide time savings, and avoid potential disagreements.
A) leasing
B) outsourcing
C) prototyping
D) sending out a request for a proposal

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13) Pay rate information should be stored in
A) employees’ personnel files
B) employee subsidiary ledgers
C) the payroll master file
D) electronic time cards

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14) 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
A) reasonableness test
B) field check
C) validity check
D) limit check

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15) The American Bread Company is a small restaurant that collects, stores, prepares and provides meals to customers in Miami, Florida. When food is received, it is recorded in a database and a receiving ticket is provided to the vendor. When food is used, the database is updated so that it always reflects the amount and type of food available to customers. In a data flow diagram, which type of symbol would be used to represent vendors?
A)

B)

C)

D)

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16) Which symbol would be used in a flowchart to represent a manual process?
A) #5
B) #6
C) #10
D) #11

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17) The more information a company provides vendors in its request for proposal, the better the chances of receiving a system that meets the organization’s requirements. Which of the below statements identifies why errors may decrease?
A) All responses are in the same format and based on the same information
B) Both parties possess the same expectations and pertinent information is captured in writing
C) The chances of overlooking important factors are reduced
D) The same information is provided to all vendors

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18) The relationship between the Rent Item and Return Item events is most likely 1:1 for all except which of the following reasons?
A) A return must be for a rented item
B) A rented item can only be returned once
C) Rented items are accounted for separately
D) All rented items must be returned

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19) A well-planned and drawn level 0 data flow diagram for the expenditure cycle would show which of the following processes?
A) 1.0 Order Goods; 2.0 Receive and Store Goods; 3.0 Pay for Goods
B) 1.0 Order Goods; 1.1 Receive and Store Goods; 1.2 Pay for Goods
C) 0.1 Order Goods; 0.2 Receive and Store Goods; 0.3 Pay for Goods
D) 0.1 Order Goods; 0.12 Receive and Store Goods; 0.13 Pay for Goods

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20) A document that shows all projects that must be completed and the related IT needs in order to achieve long-range company goals is known as a
A) performance evaluation
B) project development plan
C) data processing schedule
D) strategic master plan

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21) What system privileges should an employee involved in the general ledger and reporting system be given?
A) general privileges to create, delete, update, or modify data
B) no privileges permitting the creation, deletion, updating, or modification of data
C) only the specific privileges necessary to perform an employee’s assigned duties
D) read-only privileges

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22) The COSO Enterprise Risk Management Integrated Framework stresses that
A) risk management activities are an inherent part of all business operations and should be considered during strategy setting
B) effective risk management is comprised of just three interrelated components; internal environment, risk assessment, and control activities
C) risk management is the sole responsibility of top management
D) risk management policies, if enforced, guarantee achievement of corporate objectives

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23) Refer to the table below, which shows the results of payback, net present value, and internal rate of return analysis of four projects. Which is preferred by the net present value criterion?

A) Project A
B) Project B
C) Project C
D) Project D

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24) The transaction cycle that includes the events of hiring employees and paying them is known as the
A) revenue cycle
B) expenditure cycle
C) human resources cycle
D) financing cycle

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25) The ________ should always be included with a merchandise shipment to a customer.
A) picking ticket
B) packing slip
C) sales invoice
D) remittance advice

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26) What is the minimum number of agents that must participate in each REA event?
A) 0
B) 2
C) 1
D) 3

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27) A groups entity is used to depict the following relationship.
A) is-a-kind-of
B) is-a-member-of
C) is-a-piece-of
D) is-a-group-of

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28) What is not a typical responsibility of an internal auditor?
A) helping management to improve organizational effectiveness
B) assisting in the design and implementation of an AIS
C) preparation of the company’s financial statements
D) implementing and monitoring of internal controls

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29) A ________ is created to guide and oversee systems development and acquisition.
A) performance evaluation
B) project development plan
C) steering committee
D) strategic master plan

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30) Data processing includes all of the following except
A) verifying subsidiary ledger balances
B) changing customer addresses
C) removing inventory items no longer offered
D) adding the name of a new vendor

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31) In an REA model, rental transactions differ from sales transactions in that
A) each rental has a part number
B) each rental has a unique serial number
C) rental transactions require completely different REA models than sales transactions
D) All of the above are ways in which rental transactions differ from sales transactions

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32) Which of the following poses an internal control problem?
A) Physical inspection of inventory quantity and condition is outsourced to a firm that specializes in this service
B) Products are released from inventory after a warehouse employee and a shipping clerk both sign the pick list
C) Sales representatives have authority to increase customers’ credit limits in $1,000 increments
D) When customer payments are received in the mail, checks are sent to the cashier’s office and remittance advices are sent to the accounts receivable department

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33) Which of the following transactions is represented by the diagram below?

A) a lumber yard where customers may pay with cash for all purchases
B) a buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to the dealer
C) a consulting firm that offers a variety of consulting services to other businesses
D) a department store that allows customers to carry a balance and to make installment payments, if they choose

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34) All of the following are guidelines for preparing data flow diagrams except
A) show the most detail in the highest-level DFD
B) include all storage files, even if they are only temporary
C) uniquely name all data flows
D) sequentially number process bubbles

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35) Which of the following elements found in a traditional AIS system are not represented as entities in an REA relational database, but rather must be retrieved through the use of queries?
A) accounts receivable
B) the general ledger
C) accounts payable
D) all of the above

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