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233
Chapter7--Computerized Accounting Systems
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234 ♦ Chapter 7
Multiple
Choice
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Level of
Difficulty
Multiple
Choice
L.O.’s
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Difficulty
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Choice
L.O.’s
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Matching
L.O.’s
Level of
Difficulty
Matching
L.O.’s
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Difficulty
Matching
L.O.’s
Level of
Difficulty
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2
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Essay
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Computerized Accounting Systems ♦ 235
TRUE/FALSE
1. As businesses become more complex, the need for computerized accounting systems increases.
2. Computerized accounting systems use similar concepts to the manual approach and the computer
does much of the work for you.
3. Computerized accounting systems consist of various modules, each associated with common
business activities.
4. The purchasing and inventory management module maintains accounts receivable and inventory
information.
5. Information for use by external stakeholders is provided by the asset management module.
6. Control accounts contain data about specific or individual items such as inventory prices and
customer addresses.
7. A subsidiary account could include data about all individual customer accounts.
8. Subsidiary accounts of a particular type are summarized in the retained earnings account.
9. Control accounts are considered summary accounts for particular types of subsidiary accounts.
236 ♦ Chapter 7
10. The components in a computerized accounting system are not linked together due to security
concerns.
11. The sales module maintains product inventory information.
12. The mechanical functions of an accounting system can NOT be automated.
13. The records for each control account are kept in the company’s general ledger.
14. Each component of an information system should have the ability to receive, store, and process
information.
15. Data entered into a computerized accounting system that originate as paper documents are called
the output.
16. Data may be entered into a table of a relational database through the use of forms.
17. Business-to-business and business-to-customers are examples of E-Business.
18. The use of the Internet to promote online sales of merchandise does not require the use of a
computerized accounting system.
19. Application software facilitates the recording and processing of data.
Computerized Accounting Systems ♦ 237
20. A set of computerized files in which company data are stored is called an application.
21. A database should have the capability of being updated easily.
22. Because of automation advancements, internal controls are not required in computerized
information systems.
23. The process of backing up databases will prevent information theft.
24. The ability to recover data in case of computer system destruction by disaster is an example of an
internal control.
25. A set of hardware devices linked together to facilitate data exchange is called a computer network.
26. A client is a computer that requests services from other computers.
27. A server is a special type of client.
28. The sales module would include information relating to sales, accounting, and shipping activities.
29. Product inventory files should be accessible by the sales module in order to assure product
availability.
238 ♦ Chapter 7
30. Good internal controls should include separation of accounting data entry duties from the handling
of cash and checks.
31. The sales module should have the ability to flag customers that are delinquent payers of bills so as
to prevent future sales to those customers.
32. Merchandise and supplies purchases should be handled within the sales module.
33. The purchasing and inventory module should have the ability to receive orders from customers.
34. Purchasing, accounting, and receiving are all functions of the purchasing and inventory module of
a computerized system.
35. To expedite order processing, vendors who maintain a website should encourage their customers
to place orders online.
36. Supply-chain-management is the interaction of a company and its customers.
37. Hiring and training employees are functions of the accounting module.
38. Wage rate data should be maintained within the human resource module.
39. Amounts paid to employees and government agencies will affect sales and accounts receivable
balances in the accounting module.
Computerized Accounting Systems ♦ 239
40. Production modules would not normally be used by service companies.
41. Cost accounting reporting is most likely a function of the production module.
42. Personnel who record cash deposits should also have physical access to the cash.
43. A set of related files linked so that information may be updated and retrieved is called a rational
database.
44. Relational databases store data in tables.
45. A primary key identifies the contents in the rows of a table of a relational database.
46. The primary key in one table can connect to a primary or foreign key in another table.
47. A foreign key is a field that is a primary key in a different table.
48. Data are often entered into a database using preprinted forms which helps ensure accuracy of
information.
49. Scanning devices can be used to enter data directly into a system.
240 ♦ Chapter 7
50. Due to security concerns, most relational databases contain only a limited amount of financial
information.
51. A customer table should contain information about each customer such as name, shipping address,
telephone number, etc.
52. The sales order table should not be allowed to access information in the inventory table.
53. Databases should be compacted to remove unused space.
54. Queries contain data stored in the system, while tables are short programs that permit information
retrieval.
55. Individual tables in the database should be able to store data about a particular item, entity, or
activity.
56. Forms are computer screens that provide read-only information.
57. Customers using web-based systems can enter data by using forms.
Computerized Accounting Systems ♦ 241
MULTIPLE CHOICE
1. Which of the following is a TRUE statement?
a.
the information needs of decision makers remain the same regardless of organizational
complexity
b.
business organization accounting systems are much more complex than accounting
systems of nonbusiness organizations of the same size
c.
a helpful feature of accounting systems is that they can be quite simple even for the most
complex of organizations
d.
the need for a computerized accounting system rises with organizational complexity
2. The computerized system records financial data about individual items in:
a.
inventory
b.
subsidiary accounts
c.
accounts receivable
d.
accounts payable
3. Control accounts are summary accounts that maintain totals for all
a.
income statement accounts
b.
subsidiary accounts of a particular type
c.
balance sheet accounts
d.
stockholders' equity accounts
4. A general ledger is a collection of:
a.
financial statements
b.
control accounts
c.
journal entries
d.
subsidiary accounts
5. Which of the following would NOT be used in the purchasing module of computerized accounting
systems
a.
vendor ID
b.
customer invoice number
c.
purchase order number
d.
product shipping date
242 ♦ Chapter 7
6. Which of the following statements about a computerized accounting system is NOT true?
a.
information can be retrieved in a variety of formats
b.
the preparation of financial statements can be performed electronically
c.
the accuracy of the accounting equation can be verified as each transaction is recorded
d.
it eliminates the need for using source documents
7. Which of the following is NOT a component of computerized accounting systems?
a.
human resources module
b.
asset management module
c.
sales module
d.
business valuation module
8. Which is NOT a reason for changing to a computerized accounting system?
a.
more complex business activities
b.
more customers and products
c.
reduction in employee work force
d.
increasing number of transactions
9. A good reason for implementing a computerized accounting system is
a.
fewer employees
b.
system can do much of the work
c.
business expanding
d.
all of the above are good reasons
10. Which of the following is NOT a mechanical function of an accounting system that could be
automated:
a.
updating account balances
b.
obtaining sales leads
c.
preparing schedules and reports
d.
posting to ledger accounts
11. The following are computerized accounting system modules EXCEPT:
a.
human resources module
b.
customer return module
c.
sales module
d.
asset management module
Computerized Accounting Systems ♦ 243
12. A subsidiary account:
a.
contains data about individual items
b.
has several control accounts
c.
must be closed at the end of the year
d.
is only used for vendor information
13. Control accounts:
a.
are grouped into one subsidiary account
b.
are summary accounts
c.
contain only customer information
d.
are one specific accounts receivable account
14. The general ledger/financial reporting module:
a.
produces inventory reports
b.
records only subsidiary accounts
c.
maintains records for each control account
d.
is updated only at the end of the year
15. The components of a computerized accounting system:
a.
work independently of each other
b.
are updated individually
c.
are not linked to one another
d.
integrate information functions
16. Each component of an information system:
a.
is a self-contained system
b.
receives, stores, and processes data
c.
is a network
d.
only stores information
17. Which of the following statements about computerized accounting systems is NOT true?
a.
internal controls are less important than in manual systems since computers perform most
of the computations
b.
access to the computer system should be restricted
c.
data files should be backed up regularly
d.
there should be segregation of duties among computer personnel
244 ♦ Chapter 7
18. Procedures designed to protect assets and ensure the accuracy of accounting records are known as
a.
internal controls
b.
closing the books
c.
prudent hiring practices
d.
retrieval of information from accounting database
19. Good internal controls might help to prevent all of the following events except
a.
inaccurate entry of source data
b.
bankruptcy of a customer
c.
inability to do business after system failure
d.
theft of company assets
20. The purpose of internal controls is to
a.
ensure that tax returns will be filed in a timely manner
b.
ensure that there will be no fraud in the accounting system
c.
ensure that production of goods and services will meet market demand
d.
protect assets and ensure the accuracy of accounting information
21. Which of the following is an example of a computer system control?
a.
the use of client workstations at the locations of suppliers
b.
use of vaults and safety deposit boxes to protect physical assets
c.
use of bonuses to reward sales goals
d.
storage of backup data in offsite locations other than that of the working database
22. Web-based input systems:
a.
are for exclusive use by company employees
b.
can only be accessed by vendors
c.
permit customers to place orders via the Internet
d.
are restricted to use by public companies
23. Business-to-business systems:
a.
are also known as B2C
b.
are for retail customers’ use for placing orders
c.
do not track order information for specific customers
d.
permit companies to place an order directly from their vendors
