Accounting Information Systems, 11e (Bodnar/Hopwood)
Chapter 7 Electronic Data Processing Systems
1) A sales order is an example of a source document that may be prepared manually.
2) The absence of control procedures over data transmitted between user departments and the
data processing department could represent a serious weakness in the system.
3) The use of input control documents is not necessary when forwarding data to the data entry
group for input into the system.
4) A batch control form should require the preparer’s signature or name.
5) When key-verification software is used, the software automatically corrects any mismatches
to ensure smooth and uninterrupted processing.
6) Visual verification is another highly effective method used to detect data-entry errors.
7) Program data editing is often used in place of verification.
8) Data editing routines may be applied to each of the basic data structures.
9) An edit program performs a table lookup when it compares the actual value of a field to
acceptable values found in a table.
10) A check digit is a value found in an input field that is visually compared, or “checked.”
11) Accounting data entered into an Accounting Information System must be in the form of
debits and credits.
12) Sophisticated information systems can capture system events and their attributes.
13) Bar coding is a manual identification technique used in a real-time system.
14) Bar coding is an automatic identification technique used in a real-time system.
15) The Internet has enhanced the real-time sales system by extending it to customers who are
off-site.
16) A company can use bar coding technology to achieve maximum benefit without code
standardization.
17) Sending an electronic catalog has the same advantages as sending it in paper form.
18) A company will often analyze its customers’ sales trends and predict future needs.
19) There are two major EDI phases.
20) The essential EDI phases include the physical receipt of the order, validation and
authentication, and decryption and translation.
21) A transmission acknowledgment reports in detail the items in the received message.
22) A functional acknowledgment acknowledges receipt of the message and reports in detail the
items in the received message.
23) An input document control form documents real-time totals of input data transmitted
between user departments and the data processing department.
24) An output distribution register is maintained to control the disposition of reports.
25) All electronic input systems are referred to as on-line input systems.
26) Matching a vendor code to a table file of valid vendor codes is an example of a valid code
check.
27) Using an electronic input system helps ensure the segregation of duties and provides a solid
audit trail.
28) Tagging occurs when additional, audit-oriented information is included with original
transaction data.
29) A common example of an automated identification system is an automated Point-of-Sale
system used in most retail, grocery, and discount stores.
30) All electronic input systems require no human intervention.
32) Batch processing is economical when large numbers of transactions must be processed.
33) Batch processing can only be performed using random-accessed (i.e., direct or indexed) file
updating.
34) A sequentially organized master file commonly resides on a direct-access storage device.
35) When preparing the transaction file, occasional data editing of source documents prior to
input is suggested.
36) Editing as a function may be placed between the input and process functions in a processing
flow diagram.
37) There are three major aspects to the operation of a computerized general ledger system.
38) All entries into the general ledger should be documented with journal vouchers.
39) Line coding is the process that links general ledger accounts and the reports in which they
appear.
40) Line codes should never be stored within the general ledger file itself.
41) Sequential-access file updating is simpler than random-access file updating.
42) An accounts receivable control file is a summary of the accounts receivable by type of
account, such as “installment” or “net 30 days.”
43) The last step in the cash remittance processing of customer payments by check is to
restrictively endorse the checks.
44) Paid customer invoice records are retained on-line for a year and are available for inquiries.
45) Comparing the activity file and the bank summary file does not ensure that all cash has been
deposited and has been applied and recorded on the activity file.
46) Using an OLRS, master files are always up-to-date because they are updated as soon as
transaction data is input.
47) Control of transaction process is far less involved in OLRS than it is in batch-oriented
systems.
48) A significant degree of cooperation among trading partners is required to implement real–
time sales systems.
49) Batch-processing systems rely almost exclusively on wands and scanners for UPC bar code
recognition.
50) Point-of-sale systems provide a variety of timely and detailed reports concerning operations,
which is of great benefit to the management of a retail firm.
51) EDI documents typically contain three control numbers, two at the beginning of the message
and one at the end.
52) Because real-time sales systems pose certain internal control problems, good computer
security and careful program data edit checks are essential.
53) On-line, real-time electronic systems produce significant amounts of output.
54) The use of ________ control over the entire data processing input-process-output sequence is
fundamental to organizational independence.
55) The use of programmed edit checks to discriminate among acceptable data is called
________ ________ auditing.
56) Using ________ ________ can compensate for the loss of manual internal controls.
57) ________ ________ input sales data into the computer system for processing immediately at
the time and point of sale.
58) Many manual, batch-oriented systems use ________ file processing.
59) Using son-father-grandfather retention, if the old master file is the ________, the backup
master file must be the ________.
60) Computer processing of accounting data is typically a(n) ________ procedure.
61) The summary of the current month’s general ledger activity is the general ledger by
________.
62) Each month ________ ________ should be reconciled to reports prepared from the bank
summary file.
63) Users interactively input data in ________ ________ systems.
64) The technologies that make real-time sales systems feasible are the ________ system; bar
coding for automatic identification, and the ________ ordering system.
65) The ________ has enhanced the real-time sales system by extending it to customers who are
off-site.
66) In a real-time sales system, ________ can be used to transmit retail sales data captured from
the retail store to vendors.
67) A group that is often part of the internal audit function that is charged with monitoring EDP
operations is the ________ ________ group.
68) Fundamental controls over data transfer between user departments and data processing
include
A) batch control totals.
B) data transfer registers.
C) activity file totals.
D) Answers A and B are both correct.
69) Input data should be accompanied by the completion of a(n)
A) data transfer log.
B) input document control form.
C) data transfer register.
D) key verification control procedure.
70) Errors in the keying operation can be detected using
A) a key verification control procedure.
B) a data transfer control register.
C) program data editing.
D) None of these is correct.
71) In a manual input system, batch controls are prepared initially by the
A) EDP department.
B) computer software.
C) user department.
D) general ledger department.
72) A software-based control procedure that checks for some errors as they are being input is
called
A) input verification.
B) key verification.
C) input control testing.
D) transcription checking.
73) Key verification is often used
A) to verify only selected essential fields.
B) to verify essential and nonessential numeric fields.
C) to verify all input fields, both alpha and numeric.
D) when two or more people key input data in unison.
74) As a control procedure, key verification requires that
A) user departments key all of their own data.
B) input fields are visually verified.
C) key mismatches are electronically corrected.
D) each source document is key-transcribed a second time.
75) Key verification control procedures
A) edit data.
B) do not use batch totals.
C) do not edit data.
D) electronically replace incorrect data with data from an existing database.
76) Program data editing is a software technique that should
A) be used in addition to verification.
B) be used in place of verification.
C) be applied only to characters within input fields.
D) only be used after visual verification has detected errors in the input.
77) Program data editing techniques may be applied to
A) fields.
B) records.
C) files.
D) All of these answers are correct.
78) A data editing routine that compares data with acceptable values is a
A) limit test.
B) table lookup.
C) financial total check.
D) valid code check.
79) A data editing routine that compares numeric data input within a range is a(n)
A) table lookup.
B) hash total check.
C) limit test.
D) internal label test.
80) An extra digit added to a code number verified by applying mathematical calculations to the
individual code number characters is a
A) control digit.
B) hash digit.
C) check digit.
D) verification digit.
81) Check digits are especially effective at detecting
A) transposition errors.
B) accidental keying mistakes.
C) incorrect account numbers.
D) customer accounts that were never assigned.
82) The use of check digits
A) is highly unusual in today’s EDP environment.
B) is very common because of the high reliability of this procedure.
C) eliminates using key verification as a control procedures.
D) eliminates using data editing routines as a method to detect errors.
83) Electronic data entry
A) requires no human intervention.
B) is sequentially processed.
C) is always manually entered.
D) is on-line.
84) An essential input field that should contain data is empty. The data edit control that would
detect this error is a
A) limit check.
B) completeness check.
C) sequence check.
D) hash total check.
85) The “amount due” field of a bill is checked to ensure that the sign is positive. This is an
example of a field
A) sign check.
B) length check.
C) format check.
D) type check.
86) During input, a data entry clerk incorrectly keyed product codes “ABXY” as “BAXY.” Both
ABXY and BAXY are valid codes. Which of the following controls would prevent this
situation?
A) A table-lookup procedure
B) A check digit test
C) Key verification
D) Limit test
87) The compensating control for the loss of segregation of duties in an electronic input system
is
A) supervision and review.
B) input document control forms.
C) prenumbered documents.
D) transaction logs.
88) Three technologies make extended supply-chain systems feasible. Which of the below is not
one?
A) XML-type data generation
B) POS system
C) Bar coding for automatic identification
D) EDI ordering system
89) A transaction log that is “tagged” means that
A) it has been catalogued in the EDP library.
B) it is full and cannot hold any more information.
C) it has been key verified and data edited.
D) additional, audit-oriented information is included with original transaction data.