Consider the following short case as you respond to the next nine questions:
ABC Consulting’s employees include management, consultants and office staff. The
company accepts engagements related to internal control design and evaluation, as well
as enterprise risk management plans. A customer can purchase the two services
independently of one another. The office staff bills clients on a monthly basis with
terms of 2/10, n/30. All consulting clients must sign a contract, which is also signed by
an ABC manager. One member of ABC’s management team assigns at least one
consultant to work with the customer until the engagement is complete. Consultants can
be assigned to multiple engagements simultaneously, but every consultant must always
be working on at least one engagement. Each client may have only one contract with
ABC at a time.
In a REA model of the case, the cardinalities between the “assign employees” event and
the agent “employees” would be:
A. Assign employees (0,*) — (1,1) Employees
B. Assign employees (0,*) — (1,*) Employees
C. Assign employees (1,*) — (1,*) Employees
D. None of these
Consider the following REA diagram as you respond to the question:
How many agents are represented in the model?
A. One
B. Two
C. Three
D. Four
Please refer to the following unadjusted trial balance in answering the below question.
VLN had unpaid wages totaling $800 at the end of the accounting period. When VLN’s
accountant makes an adjusting entry for the unpaid wages, the new trial balance totals
will be:
A. $49,600
B. $51,200
C. Some other amount
D. Cannot be determined from the information given
STC Corporation’s enterprise resource planning system contains a cash payments table,
a cash receipts table and a cash table. The three tables are linked via which of the
following fields?
A. Cash
B. Account number
C. Currency
D. Some other field
Robert is the president and CEO of Computer Solutions; the firm’s main activity is
installing enterprise resource planning software. When a client calls Robert, he does an
“intake interview” where he assesses the client’s needs and learns about their company.
Robert tries to interview at least a dozen people at each client, including top
management and mid- and lower-level employees.
Which of the following activities would serve the same purpose as intake interviews if
Robert uses the systems development life cycle?
A. Employee surveys
B. Database specifications
C. Training simulations
D. A lecture and presentation
Consider the following short case as you respond to the question:
Amanda is a partner in a CPA firm; she supervises a staff of ten professionals, some of
whom are already licensed CPAs and some of whom are still working toward licensure.
She is responsible for audits of independent bookstores in California, Nevada and
Arizona. Amanda is concerned that the less experienced professionals she supervises
are repeating the mistakes she and the more experienced professionals on her team
made when they began auditing. She therefore wants to create a knowledge
management system.
The less experienced accountants on Amanda’s team are suffering from:
A. Relapse errors.
B. Satisficing.
C. Bounded rationality.
D. Lack of information technology.
Jon attempted to read an advanced accounting text after sleeping four hours the
previous night. Which of the following statements is most true?
A. He is experiencing information overload from personal factors.
B. He is experiencing information overload from information characteristics.
C. Both he is experiencing information overload from personal factors and he is
experiencing information overload from information characteristics.
D. Neither he is experiencing information overload from personal factors nor he is
experiencing information overload from information characteristics.
Consider the following as you answer the question: Jon is an information systems
consultant with a diverse client base. Some of his clients recently posed the questions
listed below; Jon is considering which type of flowchart would best be used to answer
each question.
i. What happens to a federal tax return once it is received by the IRS?
ii. How should a company calculate payroll withholding taxes?
iii. What kind of computer network is in place at a local IRS office?
iv. What process does an organization employ to determine how to invest money in a
pension fund?
v. What steps must be completed to write and publish an accounting textbook?
Which of the preceding questions would best be answered by preparing a systems
flowchart?
A. I, II and III
B. II, III and IV
C. II, IV and V
D. All of these
Consider the following flowchart symbols as necessary as you respond to the remaining
questions in this chapter:
Which of the following labels would you expect to find inside Symbol J?
A. By date
B. By name
C. Either by date or by name
D. Neither by date nor by name
The conversion process involves three common resources: material, direct labor and
overhead. Which of the following is an example of overhead in that context?
A. Depreciation on factory equipment
B. Chief financial officer’s salary
C. Both depreciation on factory equipment and chief financial officer’s salary
D. Neither depreciation on factory equipment nor chief financial officer’s salary
Missouri Can Corporation (MCC) manufactures and sells a variety of can types, such as
soft drink cans, oil cans and many others. MCC has adopted a functional organization
structure that includes departments for accounting, marketing, manufacturing, human
resources and information systems. Which of the following pairs of documents are
associated with the same business process?
A. labor time ticket, payroll register
B. production cost report, Form W-2
C. labor time ticket, production cost report
D. Each pair of documents is associated with the same business process.
Raul was leading a team charged with developing a new system for budgeting. Which
of the following questions is best paired with the most appropriate phase of the systems
development life cycle?
A. Initiation/planning: Do we really need a new budgeting system?
B. Requirements analysis: Do we really need a new budgeting system?
C. Design: How many people should be on the team?
D. Operations and maintenance: How many people should be on the team?
Consider each independent situation below. For each one, indicate the school of ethical
thought the decision maker is using; circle one word or phrase that led you to your
conclusion.
a. In making ethical decisions, Annie strives to be true to her basic ethical nature.
b. Jeff inflated his division’s sales to get a bigger bonus for himself.
c. Michelle reported fraud she had discovered because she believes that lying is always
wrong.
d. Shan agreed to coach as many CPA exam candidates as possible, in spite of his busy
schedule.