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14) A general journal
A) would be used to record monthly depreciation entries.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.
15) The general ledger
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.
16) A subsidiary ledger
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.
17) A specialized journal
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.
18) Which statement below is true with regards to an audit trail?
A) An audit trail begins with the general journal.
B) An audit trail provides the means to check the accuracy and validity of ledger postings.
C) An audit trail is a summary of recorded transactions.
D) An audit trail is automatically created in every computer-based information system.
19) Which of the following statements about a master file is false?
A) A master file is conceptually similar to a ledger in a manual AIS.
B) A master file's individual records are rarely, if ever, changed.
C) A master file exists across fiscal periods.
D) A master file stores cumulative information.
20) Which of the following is conceptually similar to a journal in a manual AIS?
A) database
B) master file
C) record
D) transaction file
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
A) relational ledger.
B) transaction file.
C) master file.
D) specific ledger.
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)
A) entity.
B) attribute.
C) field.
D) record.
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)
A) entity.
B) attribute.
C) field.
D) record.
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)
A) entity.
B) attribute.
C) field.
D) record.
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)
A) entity.
B) attribute.
C) field.
D) record.
26) The coding technique most likely used for sales orders is
A) block code.
B) group code.
C) sequence code.
D) data code.
27) A specialized journal would be most likely to be used to enter
A) sales transactions.
B) monthly depreciation adjustments.
C) annual closing entries.
D) stock issuance transactions.
28) Changing an employee's hourly wage rate would be recorded where?
A) employee master file
B) employee transaction file
C) special journal
D) employee update file
29) Which of the following statements is not correct?
A) The audit trail is intended to verify the validity and accuracy of transaction recording.
B) The audit trail consists of records stored sequentially in an audit file.
C) The audit trail provides the means for locating and examining source documents.
D) The audit trail is created with document numbers and posting references.
30) Data about which of the following facets of a business activity is most likely to be recorded
in a transaction file?
A) business activity
B) resources affected by the business activity
C) people who participate in the business activity
D) place the business activity occurs
31) Data about all of the following facets of a business activity are most likely to be recorded in
a master file except the
A) business activity.
B) resources affected by the business activity.
C) people who participate in the business activity.
D) place the business activity occurs.
32) Describe an audit trail.
33) Explain how data is organized and stored in an AIS.
34) Describe guidelines to follow for a well-designed coding system.
35) Describe the relationship between the general and subsidiary ledgers.
2.4 Discuss the types of information that an AIS can provide.
1) Which statement below regarding the AIS is false?
A) The AIS must be able to provide managers with detailed and operational information about
the organization's performance.
B) Both traditional financial measures and operational data are required for proper and complete
evaluation of performance.
C) The AIS was often just one of the information systems used by an organization to collect and
process financial and nonfinancial data.
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.
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
A) internal financial information.
B) internal nonfinancial information.
C) external financial information.
D) external nonfinancial information.
3) Which of the following information would most likely be reviewed by management on an
exception report?
A) monthly cash budget
B) quality control system failures
C) unit sales by territory and salesperson
D) income statement
4) All of the following situations would likely be communicated in an exception report except
A) production stoppages.
B) weekly credit and cash sales comparison.
C) low inventory level.
D) expense variances outside acceptable range.
5) Which statement below regarding the AIS and managerial reports is false?
A) The AIS is best utilized for financial data while the management information system is best
utilized for operational data.
B) The AIS must be able to provide managers with detailed operational information about the
organization's performance.
C) Both financial and nonfinancial data are required for proper and complete evaluation of
organizational performance.
D) Most source documents capture both financial and nonfinancial data about business
transactions.
6) True or False: Traditionally, accounting information systems have been used to collect,
process, store and report non-financial information.
7) The existence of multiple systems which provide information can result in all of the following
except
A) redundancies.
B) discrepancies.
C) integration issues.
D) efficiency.
8) When printed on paper, data output is referred to as
A) reports.
B) hard copy.
C) soft copy.
D) financials.
9) When displayed on a monitor, data output is referred to as
A) reports.
B) hard copy.
C) soft copy.
D) financials.
10) Identify the output below that an accounting information system can provide.
A) income statement
B) list of sales returns
C) exception reports
D) all of the above
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?
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.
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.
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.
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.
2) In an ERP system, the module used to record data about transactions in the revenue cycle is
called
A) order to cash.
B) purchase to pay.
C) financial.
D) customer relationship management.
3) Implementation of an ERP system requires increased focus on all except which of the
following controls?
A) segregation of duties between custody, authorization, and recording
B) data entry controls on validity and accuracy
C) controls over access to data
D) appropriate disposal of hard copy reports
4) Describe four advantages and four disadvantages of implementing an ERP system at a
multinational corporation.
5) ERP stands for
A) enterprise resource planning.
B) enterprise resource program.
C) enterprise reporting program.
D) none of the above
6) In an ERP system, the module used to record data about transactions in the disbursement cycle
is called
A) order to cash.
B) purchase to pay.
C) financial.
D) customer relationship management.
7) In an ERP system, the module used to record data about transactions in the production cycle is
called
A) order to cash.
B) purchase to pay.
C) manufacturing.
D) logistics.
8) In an ERP system, the module used to record marketing data is called
A) marketing.
B) advertising.
C) customer relationship management.
D) customer service.
9) All of the following are disadvantages of an ERP system except
A) an ERP provides an integrated view of the organization's data.
B) ERP software and hardware can cost midsized companies between $10 million and $20
million dollars.
C) ERPs frequently cause organizations to change their business processes to standardized ones.
D) ERPs are relatively complex.
10) All of the following are advantages of an ERP system except
A) in an ERP, data input is captured or keyed once.
B) ERPs permit management to gain greater visibility into every area of the enterprise.
C) it takes considerable experience and training to use an ERP system effectively.
D) ERPs permit manufacturing plants to receive new orders in real time.
11) All of the following are reasons that implementing a new ERP may fail except
A) employees may resist using the ERP system.
B) ERPs can take years to fully implement.
C) employees may refuse to share sensitive information with different departments.
D) ERPs may require procedures and reports to be standardized across business units.
12) All of the following are ERP vendors except
A) Dell.
B) SAP.
C) Oracle.
D) Microsoft.
13) An ERP system might facilitate the purchase of direct materials by all of the following
except
A) selecting the best supplier by comparing bids.
B) preparing a purchase order when inventory falls to reorder point.
C) routing a purchase order to a purchasing agent for approval.
D) communicating a purchase order to a supplier.
