Computerized Accounting Systems
Chapter Exam Questions
Course Introduction
Computerized Accounting Systems introduces students to the concepts and practical applications of using accounting software to process and manage financial data in a business environment. The course covers the fundamentals of computerized accounting, including setting up and configuring accounting systems, recording financial transactions, generating reports, and maintaining accurate records. Emphasis is placed on the integration of accounting principles with technology, the efficiency and accuracy provided by automation, and the application of these systems in real-world business scenarios. Students will gain hands-on experience with industry-standard accounting software, developing skills necessary for modern financial management and decision-making.
Recommended Textbook
Accounting Information Systems A Practitioner Emphasis 7th Edition by Cynthia
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D. Heagy
Chapter 1: Significance of Accounting Information Systems
and
the
Accountants Role
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Q1) For decision-making purposes, managers require data from which source(s) and in which terms?
A) Internal and external sources in only monetary terms
B) Internal sources in non-monetary terms and external sources in monetary terms.
C) Internal sources in non-monetary terms and external sources in monetary terms
D) Internal and external sources in both monetary and non-monetary terms
Answer: D
Q2) The "beginning ERP market" includes companies with revenues of $500 million or more.
A)True
B)False
Answer: False
Q3) What essential functions are performed by computer hardware?
A) Input, processing, output, and instruction of data
B) Input, storage, and instruction of data, and decision making
C) Input, processing, storage, and output of data
D) Input, storage, and output of data and decision making
Answer: C
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Chapter 2: Accounting Systems Documentation
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Q1) How should distribution of or access to documentation be handled?
A) Through multiple channels
B) Saved so that is can be a basis of comparison for future documentation development
C) On a need-to-know basis
D) None of the above
Answer: C
Q2) What is the appropriate use of a narrative description?
A) When there is not enough justification to hire technical personnel to develop graphical documentation
B) As an alternative to graphical representation
C) As a companion to graphical representation
D) None of the above
Answer: C
Q3) In a systems flowchart, a rectangle represents a process, or operation.
A)True
B)False
Answer: True
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Chapter 3: Essential Elements and Basic Activities of Accounting Systems
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Q1) In which journal would you most likely record accrued interest receivable?
A) General journal
B) Purchases journal
C) Sales journal
D) Cash disbursements journal
Answer: A
Q2) An open file contains the data about transactions that have been started but cannot be fully processed until a subsequent event occurs.
A)True
B)False
Answer: True
Q3) What file in a computerized accounting system corresponds to documents awaiting further processing in a paper-based system?
A) Transaction file
B) Master file
C) Open file
D) Reference file
Answer: C
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Chapter 4: Data Flows, Activities, and Structure of Accounting Systems
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Q1) What are the primary activities of an accounting information system?
A) Input (capture) data
B) Store data
C) Process data
D) Output (communicate) data
E) All of the above are primary activities. E
Q2) The payroll subsystem can be a part of which business process?
A) Revenue
B) Expense
C) Inventory
D) Purchasing
Q3) Status reports focus on the balances recorded in the transaction files after updating has been completed.
A)True
B)False
Q4) The income statement and the balance sheet are prepared from data in the general ledger master file.
A)True
B)False
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Q5) Name, explain, and give examples of four different ways that data are processed.
Chapter 5: Reporting Process, Coding Methods, and Audit Trails
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Q1) Receipt of a sales order could be used for event coding in accounting information systems.
A)True
B)False
Q2) Exception reporting is the arrangement together of actual data for a current period with either budget data for the current period or actual data for a prior period, thereby facilitating comparison of the data.
A)True
B)False
Q3) Which of the following factors influences the frequency of reporting?
A) The type of data reported
B) The conciseness of the report
C) The length of the report
D) The writing ability of the accountant
Q4) Postal zip codes are examples of which type of coding system?
A) Sequence code
B) Mnemonic code
C) Group code
D) Block code
Q5) Explain the meaning of exception reporting.
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Chapter 6: Internal Control and Risk Assessment
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Q1) What is the definition of internal control?
A) A process designed to guarantee that objectives related to organizational strategy, quality of reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations will be achieved.
B) A process designed to provide reasonable assurance that objectives related to organizational strategy, quality of reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations will be achieved.
C) A process designed to provide reasonable assurance that objectives related to ethical values and integrity, quality of reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations will be achieved.
D) A process designed to guarantee that objectives related to ethical values and integrity, quality of reporting, SOX compliance, and efficiency of operations will be achieved.
Q2) Describe 4 requirements pertaining to Sarbanes-Oxley.
Q3) The audit committee is composed of top managers of a company.
A)True
B)False
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Chapter 7: Control Activities
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Q1) While entering data into a cash receipts transaction file, an employee transposed two numbers in a numeric code. Which of the following controls would have prevented this type of error?
A) Sequence check
B) Record check
C) Self-checking digit
D) Field-length check
Q2) Which of the following concepts relate to control activities?
A) Isolation and accountability.
B) Redundancy and oversight.
C) Comparison and assistance.
D) A and B only.
E) All of the above. E
Q3) A current trend with respect to the placement of controls is a movement away from controls programmed into computer software toward controls in human operating procedures.
A)True
B)False
Q4) Identify and briefly describe the classification scheme for control activities.
Q5) Describe the process of cryptography using private and public keys.
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Chapter 8: The Financial Process
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Q1) In accounting software packages, what is the equivalent term for accounts in a subsidiary ledger?
A) Master accounts
B) Modules
C) Sub-accounts
D) Normal accounts
Q2) What is the term that accounting software packages use for control accounts?
A) Normal accounts
B) Chart of accounts
C) Sub-accounts
D) Master accounts
Q3) Which of the following represent proper information processing controls in the f financial process?
A) Summarized daily information should be filed for future reference.
B) Output distribution should be limited to authorized individuals.
C) Checks of transactions only need to be done on transactions posted in other departments.
D) All of the above represent proper information processing controls in the financial process.
Q4) List the types of entries recorded in the financial process.
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Chapter 9: The Revenue Process
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Q1) Which of the following is an action resulting from the "receipt of cash" trigger in a sales- support organization?
A) Adding to the open customer invoice file.
B) Creation a sales transaction file record.
C) Creation of a cash receipts transaction file record.
D) Collection of transaction-based query information.
Q2) The revenue process encompasses which of the following?
A) Events related to the acquisition of goods and services
B) Events related to the transformation of raw materials into finished goods
C) Events related to the distribution of goods and services to customers
D) Events necessary to keep general ledger accounts up-to-date
Q3) The process that encompasses events related to the distribution of good and services to customers and the receipt of money in exchange for these goods and services is known as what process?
A) The purchasing process
B) The financial process
C) The revenue process
D) The inventory process
Q4) Describe cycle billing and its advantages.
Q5) Give two examples of data verification controls found in the revenue process.
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Chapter 10: The Purchasing Process
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Q1) What is the purpose of the unbilled payables account in the purchasing process and when it is debited and credited?
Q2) List four of the five actions that result from the receipt of merchandise from a vendor.
Q3) Discuss risks associated with the payment of invoices (i.e., disbursement of cash) in the purchasing process.
Q4) Which of the following modules would you expect to find in the purchasing function?
A) Sales Order Processing, Accounts Payable, Vendor Invoicing, Disbursements.
B) Purchase Order Processing, Accounts Receivable, Receiving, Vendor Invoicing.
C) Purchase Order Processing, Accounts Payable, Vendor Invoicing, Disbursements.
D) Sales Order Processing, Accounts Payable, Vendor Invoicing, Receiving, Cash Receipts.
Q5) Which of the following are principal reports required for effective management of the purchasing process?
A) Vendor performance; outstanding purchase orders
B) Vendor invoices; discounts lost
C) All of the above
D) B only
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Chapter 11: The Inventory Process
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Q1) The purpose of the excess inventory report is to assure that sufficient inventory is on hand to meet sales demand.
A)True
B)False
Q2) What report is essential to organizations using the "just in time" inventory approach?
A) Excess inventory report.
B) Returns and allowances report.
C) Inventory and PO aging report.
D) Order recommendation report.
Q3) What is a characteristic of radio frequency identification (RFID) that makes it preferable to universal product codes (UPC)?
A) RFID codes can identify a class or type of product, and can identify an individual product as it moves along the supply chain.
B) RFID can only be used with enterprise resource planning (ERP) systems, while UPC cannot be used with ERP systems.
C) RFID tags are smaller than UPC tags and cannot be detached by the user.
D) None of the above are reasons the RFID is preferable to UPC.
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Chapter 12: Database Structure of Accounting Systems
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Q1) What type of relationship do a customer table and an inventory table have?
A) One to one
B) One-to-many
C) Many-to-many
D) B and C, but not A
Q2) Schemas exist at the external and conceptual levels, but not at the internal level.
A)True
B)False
Q3) Which of the following statements is true about a database management system?
A) It is a software program specially designed to convert conventional files into a database.
B) It is a collection of software specially designed to manage the data in a database in response to instructions issued by application programs or requests made by users.
C) It is an application program that manages the instructions issued by users to process data.
D) It is a collection of software that contains metadata and a data dictionary.
Q4) What are some of the advantages of an accounting system that uses a database?
Q5) What activities of an organization must an accounting system be able to support?
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Chapter 13: Developing a Relational Database for an Accounting Information System
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Q1) What are the three steps that will normalize data with respect to the third normal form?
Q2) In the REA framework approach to developing a relational database for an accounting system, the first step is to identify and document the business events, or activities, that are of interest to users and the resources and agents that are related to the events.
A)True
B)False
Q3) What are resources, events, and agents called in the REA framework?
A) Properties
B) Dependencies
C) Entities
D) Attributes
Q4) What would be a likely primary key for the customer table?
A) Customer name
B) Customer code
C) Invoice number
D) Invoice date
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Q5) Briefly summarize the steps required to develop a database for an accounting system using the REA framework approach.
Chapter 14: Electronic Business
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Q1) The most common EDI document is a(n)
A) Invoice
B) Purchase order
C) Shipping note
D) Price list
Q2) Electronic data interchange is the computer exchange of business documents between two organizations by telephone, radio, microwave, satellite transmission, or the Internet using a public standard format.
A)True
B)False
Q3) Which of the following technologies would an organization use to prevent access to its private network?
A) Digital signature
B) Firewall
C) Web assurance service
D) Encryption
Q4) List the three types of e-business and give one example of each.
Q5) Identify at least two benefits of EDI.
Q6) Identify three of the four functions of a VAN listed in the chapter.
Q7) Define a digital signature.
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Chapter 15: Ais Selection and Implementation
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Q1) The current business model for AIS implementation is to purchase a commercial off-the- shelf accounting software package.
A)True
B)False
Q2) What is the difference in AIS installation and AIS implementation?
Q3) Parallel conversion is also known as the "big bang."
A)True
B)False
Q4) Which of the following is not an ERP package?
A) Oracle E-Business Suite
B) Lawson Enterprise
C) Microsoft Dynamics GP
D) Peachtree by Sage
Q5) Describe two planning tools used in AIS selection and implementation.
Q6) Discuss issues involved in system acquisition.
Q7) What is AIS installation?
A) The transfer of AIS programs to client computers
B) A process that is more comprehensive than implementation
C) A process that includes conversion planning and training of new personnel
D) All of the above are true about AIS installation.
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