Accounting Information Systems, 2e (Kay/Ovlia)
Chapter 1 Accounting Systems Insights
Objective 1
1) An IT auditor must understand the terms and definitions used by accounting and IT
professionals.
2) Which of the following are NOT part of the basic functions of an enterprise system?
A) Hiring
B) Output
C) Input
D) Processing
1) A Supply Chain Management (SCM) system is a subsystem of an Accounting System.
2) Activities performed by various departments within a company are rarely interconnected.
3) An integrated enterprise system allows different departments to use the same information.
4) Business processes are related activities performed by an enterprise to create value by
transforming input into output.
Match the following accounting cycles to the appropriate subsystems.
A) Operations/Production System
B) Supply Chain Management
C) Customer Relationship Management
5) Purchasing Cycle
Diff: 2
Objective: Q1.2 How is the accounting system related to the enterprise system?
6) Payroll Cycle
Diff: 2
Objective: Q1.2 How is the accounting system related to the enterprise system?
7) Sales Cycle
Diff: 2
Objective: Q1.2 How is the accounting system related to the enterprise system?
Match the following enterprise system function with the correct definition.
A) Summarizing information to generate documents and reports
B) Sorting and storing information
C) Capturing information to store in the system
8) Input
Diff: 2
Objective: Q1.2 How is the accounting system related to the enterprise system?
9) Output
Diff: 2
Objective: Q1.2 How is the accounting system related to the enterprise system?
10) Processing
Diff: 2
Objective: Q1.2 How is the accounting system related to the enterprise system?
11) When data is “hard keyed” into the program, which of the following is true?
A) Changing the data requires recreating (recording) the entire program.
B) Changing the data requires purchasing additional computer storage and may take days or
weeks.
C) Changing the data is cost efficient and may be accomplished in a matter of minutes.
D) Changing the data is costly and may take days or weeks.
12) What is an alternative to “hard keyed” data?
A) If user requirements are correctly defined, the data will not change and may be “hard keyed.”
B) Using variables in the program, such as cell addresses in a spreadsheet.
C) Alternatives to “hard keyed” data is not possible. All data must be “hard keyed.”
D) Creating the program in a way that does not require data.
13) The three basic functions of an enterprise system are
A) Input, processing, and output
B) Processing, output, and reports
C) Business intelligence, processing, and output
D) Input, data, and reports
14) Which symbol is used by IT professionals to represent the enterprise network?
A) Cloud
B) Star
C) Circle
D) Square
15) What is the purpose of Enterprise Resource Planning (ERP) software?
A) Help identify the end of a product’s life cycle
B) Identify new trends in consumer purchasing
C) Analyze an organization’s sales projections
D) Help managers control organizational resources
16) An accounting system spans which of the following Value Chain components?
A) Support
B) Purchase
C) Customers
D) All the above except C
17) The Value Chain begins with which activity?
A) Selling items to customers
B) Creating the products
C) Purchasing items from vendors
D) Providing support to customers
18) Which transactions are related to the purchasing cycle?
A) Buying items from vendors
B) Paying employees
C) Selling items to customers
D) None of the above
19) Which transactions are related to the sales cycle?
A) Paying employees
B) Selling items to customers
C) Buying items from vendors
D) None of the above
20) What purpose of the processing function of an enterprise system?
A) Summarize information
B) Capture information
C) Generate reports
D) Sort and store information
21) To obtain a deep understanding of the underlying business of an enterprise system servers,
you need to ask key questions. What are those questions?
22) How does an enterprise system support people in the same company to perform different but
related business activities? Please provide an example.
23) You are an intern at a small mom-and-pop type corner grocery store. The owner’s accountant
is trying to talk the owners into purchasing an integrated enterprise system for small businesses.
The owner thinks the accountant is just trying find a way to charge more money. How would you
convince the owner each piece of the integrated enterprise system would help the business?
24) You are an accountant and one of your clients is a small business that sells only over the
Internet. How would you convince the owner to purchase an integrated enterprise system?
25) What types of data does a Supply Chain Management system and an accounting system need
to share? How does each system use that data?
26) What types of data does an operations/production system and an accounting system need to
share? How does each system use that data?
27) List the transaction cycles. What type of transactions are in each cycle?
1) The Vendors Module of a baseline accounting system relates to the sales cycle.
2) The Customer Module of a baseline accounting system includes creating purchase orders.
3) The Banking Module of a baseline accounting system includes bill paying transactions.
4) Accounting software often includes a navigation screen that represents the major modules
within the accounting system.
5) A database may have two or more tables with the exact same name.
6) Financial accounting focuses on providing accounting information to internal users, primarily
management.
7) An event that does not involve an exchange, for example accrued interest expense, does not
need to be recorded in the accounting system.
8) A primary key may be used to associate customer information (name, address, phone number,
etc.) with a sales order.
9) A primary key is a unique identifer for a database table.
10) Understanding accounting systems involves seeing the overall system. There is no need to
focus on the details.
11) Business Intelligence tools use queries to extract data directly from the relational database,
bypassing the OLAP cube and any accompanying delay.
12) Data cubes allow you to view data in two dimensions.
13) Structured Query Language is used to query a relational database.
Match the following cycles with their corresponding accounting system module.
A) Customers Module
B) Vendors Module
C) Banking Module
D) Financial Module
E) Employees Module
14) Payroll Cycle
Diff: 2
Objective: Q1.3 What are the secrets of my success at the crossroads of accounting and IT?
15) Sales Cycle
Diff: 2
Objective: Q1.3 What are the secrets of my success at the crossroads of accounting and IT?
16) Financial Cycle
Diff: 2
Objective: Q1.3 What are the secrets of my success at the crossroads of accounting and IT?
17) Purchasing Cycle
Diff: 2
Objective: Q1.3 What are the secrets of my success at the crossroads of accounting and IT?
18) When looking at an accounting system using the aerial view, you see
A) Detailed information recorded in the accounting system
B) Information available on the tax reports for the Internal Revenue Services and other tax
agencies
C) Accounting information available to internal users, primarily management
D) An enterprise-wide view of an organization showing the entire accounting system
19) When looking at an accounting system using the zoom view, you see
A) An enterprise-wide view of an organization showing the entire accounting system
B) Information available on the tax reports for the Internal Revenue Service and other tax
agencies
C) Detailed information recorded in the accounting system
D) Accounting information available to internal users, primarily management
20) The Vendors module in the Baseline Accounting System corresponds to which transaction
cycle?
A) Sales cycle
B) Financial cycle
C) Payroll cycle
D) Purchasing cycle
21) Which transactions are usually performed in the Customers module of the Baseline
Accounting System?
A) Receive inventory
B) Create invoice
C) Create purchase order
D) Pay bills
22) The sales cycle corresponds to which module in the Baseline Accounting System?
A) Banking
B) Vendors
C) Customers
D) Employees
23) Which event is part of the Purchasing Cycle?
A) Pay bill
B) Create invoice
C) Make deposit
D) Enter bill
24) Which event is part of the Sales Cycle?
A) Enter time
B) Make deposit
C) Create purchase order
D) Receive item
25) Which event is usually performed in the Financial modules of the Baseline Accounting
System?
A) Make adjusting entries
B) Pay bills
C) Enter time
D) Create income statement
26) Which accounting software is typically used in a mid-sized enterprise?
A) Oracle’s Peoplesoft Enterprise
B) SAP Business One
C) Peachtree
D) Quickbooks Enterprise
27) What modules comprise a baseline accounting system?
A) Vendors, Employees, Sales, Banking, Financial, and Reports
B) Inventory, Employees, Sales, Banking, Financial, and Reports
C) Inventory, Employees, Sales, Banking, Accounting, and Reports
D) Vendors, Employees, Customers, Banking, Financial, and Reports
28) To record a payment for inventory delivered, the information would be entered in a screen
that looks similar to which paper form?
A) Sales receipt
B) Check
C) Invoice
D) Purchase order