Consider the table below as you answer the questions:
Which of the following is generally capable of interpreting the XBRL tags in the table?
A. Excel
B. Internet Explorer
C. Both Excel and Internet Explorer
D. Neither Excel nor Internet Explorer
The table is a replica of the one in the chapter’s “AIS in the Business World.”
The purpose of the conversion process is to transform material, labor and overhead into
a finished product. Which system would an organization that manufactures unique
pieces of jewelry use for that purpose?
A. Job order
B. Process
C. Hybrid
D. Some other system
A well-designed set of internal controls helps a company achieve four main purposes.
Which of the following best pairs two controls related to a single purpose?
A. Restrictive endorsements and bank reconciliations
B. Restrictive endorsements and completing the steps in the accounting cycle
C. Bank reconciliations and background checks
D. Pre-numbered documents and background checks
Booksellers of Bufluffia is a small, independent bookstore that both publishes and sells
very specialized titles. They currently have about 50 clients; they publish and sell 30
different books at present. The company’s management has asked you to create database
tables to support their operations. Suppose the database includes a sales/inventory table.
You would expect to find all of the following fields in that table except:
A. Sales transaction number
B. Inventory item number
C. Quantity purchased
D. Total amount billed
Isabella is the CEO of BHR Corporation. By virtue of her position, she is in the best
position to complete which of the seven steps involved in creating a knowledge
management system?
A. The first step
B. The third step
C. The fourth step
D. The sixth step
Consider the following REA diagram as you respond to the question:
The boxes in the third column represent a(n):
A. Resource and internal agent
B. Event and internal agent
C. Internal agent and external agent
D. Resource and external agent
Debra and Dexter are CPAs specializing in tax planning and preparation. Their father,
Harry, taught them that being a good person will lead to doing good things. Which
school of ethical thought does Harry follow?
A. ethical egoism
B. utilitarianism
C. deontology
D. virtue ethics
Please refer to the following short case as you respond to the question:
A painter accepts orders for original works from customers in person or via the Internet.
Based on the order, the painter creates an initial sketch, which must be approved by the
customer; the customer may make changes to the initial sketch. After customer
approval, the painter selects appropriate materials and gives the customer a price quote.
If the customer accepts the price quote, the painter creates the original work; if not, the
project is abandoned. The painter stores data about customers, previous orders and
previously completed works in an electronic database.
In a data flow diagram of the case, “previously completed works” are most likely to be
represented with a:
A. Rectangle
B. Set of parallel lines
C. Numbered circle
D. Unnumbered circle
Consider the following short case as you respond to the question:
SPC Corporation sells computer security software. They maintain their AIS using
general ledger software; data files are backed up twice a day. Sales staff can access the
customer database, inventory files and general ledger, as well as sales-related
documents such as invoices and sales orders. Newly hired sales staff members at SPC
receive the company procedures manual which explains the process used to complete
the steps in the sales/collection process. To minimize costs, SPC designates up to five
sales staff members each month who can do credit checks for all new customers in
addition to processing sales. SPC bills its clients monthly and uses the balance forward
method of accounting for receivables; all cash receipts from clients are processed using
a lockbox procedure. The lockbox firm’s fee is 3% of all collections. SPC’s accounting
department estimates bad debts at the end of each fiscal year; they are normally about
1% of total sales.
SPC’s internal control in the sales/collection process would be strengthened by making
changes in:
A. Its method of accounting for receivables.
B. Its organizational structure and division of responsibilities.
C. Both its method of accounting for receivables and its organizational structure and
division of responsibilities.
D. Neither its method of accounting for receivables nor its organizational structure and
division of responsibilities.
IRM Corporation had an outdated, ineffective system for monitoring its fixed assets.
You have been asked by the CEO to develop a new system; you have decided to use the
systems development life cycle to accomplish the task. For each fixed asset, the system
should include the following items: identification code, name, date placed in service,
cost, estimated life, estimated salvage value, depreciation method, and condition. For
each step in the SDLC, indicate one question you would ask/action you would take to
develop the new system. Ensure that your responses are specific to the fixed asset
system.
a. Initiation/planning: _______________________________________________
b. Requirements analysis: ____________________________________________
c. Design: _________________________________________________________
d. Build: ___________________________________________________________
e. Test: ___________________________________________________________
f. Implementation: __________________________________________________
g. Operations/maintenance: __________________________________________
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, events would include:
A. Sign contract
B. Assign employees
C. Bill customer
D. All of these
Please consider the following short case as you respond to the question:
Sue and Sally are partners in a small local bakery specializing in wedding and birthday
cakes. They use a simple Excel spreadsheet to record journal entries and prepare
financial statements and tax returns. Robert, the owner of a consulting company that
installs and maintains ERP systems, has recently approached them about the possibility
of implementing an ERP system in their operations. If they accept his offer, Robert will
provide a series of online tutorials to help them learn about the new system. Sue and
Sally believe the implementation of the ERP system will make it easier for them to
borrow money to expand the bakery.
If Sue and Sally accept Robert’s proposal, which of the following common causes of
ERP implementation failure is likely to be the most serious?
A. Poor leadership from top management
B. Significant technical difficulties
C. Inadequate education and training
D. None of these. Since the company is so small, the ERP project is likely to succeed.