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ACCT 3332 Chap 2 and 3 Quiz 2

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 
Documentation types can be divided into two group according to which of the following?
a.
Cost
b.
Ease of understanding
c.
Intended recipients
d.
Complexity
 

 2. 
What type of documentation describes an accounting system from the outside looking in?
a.
System design documentation
b.
Top-down design documentation
c.
User documentation
d.
Technical documentation
 

 3. 
Who would be most likely to use system documentation?
a.
Auditors
b.
Management
c.
Human resources
d.
Administrative support
 

 4. 
Which of the following applies to documentation standards?
a.
Standards must conform to applicable industry, national or international conventions.
b.
Each item of documentation should bear the name of person checking and authorizing documentation for use.
c.
Each item should bear the date and name of person preparing it.
d.
All of the above apply.
 

 5. 
Which of the following issues should system narrative descriptions attempt to cover?
a.
Relationship of every member in the organization as they pertain to the system
b.
Cost of the system
c.
The relationship between the current system documentation and any past documentation
d.
System specifications
 

 6. 
What is the correct labeling, in correct order, for the following data flow diagram symbols?

mc006-1.jpg
a.
Source of data, data store, destination of data
b.
Data store, process that transforms data, source or destination of data
c.
Destination of data, source of data, process that transforms data
d.
Process that transforms data, destination of data, source of data
 

 7. 
Which of the following statements about data flow diagrams is correct?
a.
They can only be understood when used in conjunction with block diagrams.
b.
They show what an accounting system is doing and how the system is doing it.
c.
They are also called functional information diagrams.
d.
They provide a more detailed representation of an accounting information system than do block diagrams.
 

 8. 
What is a disadvantage of a data flow diagram?
a.
Inability to show relationships among subsystems
b.
Poor communications tool
c.
Difficulty of understanding for nontechnical personnel
d.
Inability to represent points of detail
 

 9. 
Which of the following is not a characteristic of system flowcharts?
a.
They are governed by national and international standards.
b.
They show technical details.
c.
They are used to guide the construction of new systems and maintain/evaluate existing systems.
d.
They are also known as problem definition documentation.
 

 10. 
Which of the following statements about a system flowchart is correct?
a.
It is usually designed for top-management.
b.
It focuses on the role of accountants in the system.
c.
It shows what a system does and how it does it.
d.
It is amenable to complex accounting systems than to simple systems.
 

 11. 
What is the difference in an internal control flowchart and a system flowchart?
a.
An internal control flowchart uses fewer symbols than a system flowchart.
b.
An internal control flowchart shows functional areas to indicate the authorization of transactions, the custody of assets, and the recording of transactions.
c.
An internal control flowchart is prepared prior to preparing a system flowchart.
d.
An internal control flowchart needs an auditor's input for accurate development.
 

 12. 
Which is not true about system flowchart symbols?
a.
They are more numerous than are data flow diagram symbols.
b.
Rigid conventions determine their use.
c.
Labels attached to the symbols are self-explanatory.
d.
Completely different sets of symbols are used for computerized and manual systems.
 

 13. 
Which of the following statements about system flowcharts is correct?
a.
Like other graphical representations, system flowcharting is not governed by national and international standards.
b.
Because it is governed by standards, flowcharting is not a subjective activity.
c.
Individual styles can help achieve a clear and orderly layout.
d.
If two different people flowchart the same system, the flowcharts will be identical.
 

 14. 
Which of the following symbolic representations indicates that a purchase order has been prepared?
a.
mc014-1.jpg
b.
mc014-2.jpg
c.
mc014-3.jpg
d.
mc014-4.jpg
 

 15. 
In the figure below, what does the flowcharting symbol at Point A represent?
mc015-1.jpg
a.
A manual operation
b.
Initiation of a process
c.
A computerized operation
d.
A decision
 

 16. 
Which type of system documentation provides the most detail?
a.
System flowchart
b.
Block diagram
c.
Data flow diagram
d.
System narrative description
 

 17. 
What type of documentation is the following?

mc017-1.jpg
a.
Data flow diagram
b.
System flowchart
c.
Hierarchical block diagram
d.
Horizontal block diagram
 

 18. 
The system flowchart symbol for a filing a document (such as filing a copy of a paid invoice by date) is:
a.
mc018-1.jpg
b.
mc018-2.jpg
c.
mc018-3.jpg
d.
mc018-4.jpg
 

 19. 
The system flowchart symbol for a decision (such as whether the customer is approved) is:
a.
mc019-1.jpg
b.
mc019-2.jpg
c.
mc019-3.jpg
d.
mc019-4.jpg
 

 20. 
Which of the following is an example of an internally generated source document?
a.
Debit memo from bank
b.
Remittance advice
c.
Employee time card
d.
Customer purchase order
 

 21. 
Which of the following data elements would NOT be on a purchase order?
a.
Quantity ordered
b.
Invoice number
c.
Vendor number
d.
Product number
 

 22. 
When preparing a customer invoice, which document could be used as the source for the ship date?
a.
Bill of lading
b.
Receiving report
c.
Vendor invoice
d.
Purchase order
 

 23. 
Which of the following can save time in recording and posting a credit sale?
a.
General journal
b.
Purchases journal
c.
Payroll journal
d.
Sales journal
 

 24. 
What is the main advantage of special journals in a paper-based accounting system?
a.
Reduction in time required
b.
Increased computer processing speed
c.
Reduction in documentation required
d.
Decreased emphasis on controls
 

 25. 
Which of the following financial statements reports the profitability of an organization for a stated period of time such as a month or a year?
a.
Statement of Changes in Ownership Equity
b.
Statement of Income
c.
Balance Sheet
d.
Statement of Cash Flows
 

 26. 
Which of the following data elements are essential in a journal?
a.
Transaction date, explanation, and dollar amount of each debit and credit
b.
Dollar amount of each debit and credit, account name and number, and explanation
c.
Transaction date, dollar amount of each debit and credit, and account name and number
d.
Account name and number, transaction date, and unique identifier for the transaction
 

 27. 
What type of account in the general ledger has a related subsidiary ledger?
a.
Detail
b.
Chart
c.
Control
d.
General
 

 28. 
What is another name for the accounts in a chart of accounts?
a.
Transaction accounts
b.
Control accounts
c.
Master accounts
d.
General ledger accounts
 

 29. 
Which of the following is the best reason for keeping subsidiary ledger accounts current?
a.
To compute liquidity ratios
b.
To prepare financial statements
c.
To check if a sale will exceed a customer’s credit limit
d.
All of the above
 

 30. 
In which of the following journal(s) would a cash sale be recorded?
a.
Sales
b.
Cash disbursements
c.
Cash receipts
d.
Both A and C
 

 31. 
In which journal would you most likely record accrued interest receivable?
a.
General journal
b.
Purchases journal
c.
Sales journal
d.
Cash disbursements journal
 

 32. 
Which file stores data to be used repeatedly for processing transactions?
a.
Reference file
b.
Open file
c.
Program file
d.
Master file
 

 33. 
What type of file contains invoice data for which payment has not yet been received?
a.
Transaction
b.
Master
c.
Open
d.
Reference
 

 34. 
What type of file is used to store data about transactions that have been started but not completed?
a.
Transaction
b.
Master
c.
Open
d.
Reference
 

 35. 
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
 

 36. 
What file in a computerized accounting system corresponds to a paper general ledger in a paper-based system?
a.
Transaction file
b.
Master file
c.
Open file
d.
Program file
 

 37. 
Which of the following is the most expensive method for creating a transaction file?
a.
Keying in or scanning data found on source documents
b.
Transmitting data electronically
c.
Extracting data from master files or open files
d.
All of the above
 

 38. 
Which file can update a subsidiary ledger master file?
a.
Customer invoice open file
b.
Customer master file
c.
Transaction file
d.
Inventory master file
 

 39. 
In regard to real-time and batch posting, or updating, which of the following statements is correct?
a.
Real-time posting is always preferred because batch posting is slow.
b.
A system may use both kinds of posting.
c.
A system can do one kind of posting or the other, not both.
d.
A system will NOT use batch posting if the system is installed on a mainframe computer.
 

 40. 
Which type of system is characterized by master and open files that are posted, or updated, immediately?
a.
Microcomputer system
b.
Mainframe computer system
c.
Batch system
d.
Real-time system
 

 41. 
Real-time posting normally would be least useful when applied to accounting for an organization’s:
a.
Bank account balances
b.
Property and depreciation
c.
Customer accounts receivable
d.
Merchandise inventory
 

 42. 
Which of the following is not a current trend in computerized accounting systems?
a.
A point-of-sale terminal in a sales department
b.
An automated teller machine in a bank
c.
An electronic time clock located n an operating facility
d.
A spreadsheet report of financial information
 

 43. 
The following symbolic representation indicates a file update, or posting.

mc043-1.jpg

What is the type of file on the left side of the posting process represented by the letter (b)?
a.
Master file
b.
Open file
c.
Parameter file
d.
Transaction file
 

 44. 
With regard to batch v. real-time posting, which of the following is correct?
a.
Real-time posting is preferred because it is faster than batch posting.
b.
Real-time posting has no effect on computer processing time.
c.
Batch posting is less costly in terms of computer and personnel resources than real-time posting.
d.
None of the above.
 

 45. 
What file in a computerized accounting system corresponds to a special journal in a paper-based system?
a.
Transaction file.
b.
Master file.
c.
Open file.
d.
Reference file.
 

True/False
Indicate whether the statement is true or false.
 

 46. 
System documentation is prepared for the benefit of top management.
 

 47. 
End-user documentation typically includes a list of programs with operating instructions.
 

 48. 
Unauthorized documentation circulating in an organization should be immediately destroyed.
 

 49. 
System documentation can include narrative description or graphical representation.
 

 50. 
Because of the differences in each type of system documentation, there is rarely an overlap of flexibility in accommodating users’ needs.
 

 51. 
Narrative descriptions are the dominant choice of documentation for showing details.
 

 52. 
Information about a system's goals and objectives should be included in a narrative description.
 

 53. 
User documentation offers an inside view of the accounting system and is written in precise technical language.
 

 54. 
A systems flowchart uses only four symbols.
 

 55. 
A systems flowchart identifies all existing control procedures for preventing or detecting errors and irregularities.
 

 56. 
Some examples of elements of a paper-based accounting system include accounts, chart of accounts, ledgers, and outputs.
 

 57. 
A bill of lading is a written contract between the shipper, the carrier engaged in the transportation of the goods, and the receiver of the goods.
 

 58. 
A ledger lists transactions in chronological order and is considered “the book of original entry.”
 

 59. 
As accountants, we are interested in how a file is organized in a logical, or conceptual, sense as opposed to the how the file is organized physically.
 

 60. 
The source documents and outputs are very similar in paper-based and computerized accounting systems.
 

 61. 
As with general journals in a paper-based accounting system, the main purpose of subsidiary master files in a computerized systems is to store detailed information about general control accounts.
 

 62. 
The general ledger master file stores information that supports both accounting and operating activities while the subsidiary ledger master files stores information that mainly supports accounting activities.
 

 63. 
An open file contains the data about transactions that have been started but cannot be fully processed until a subsequent event occurs.
 

 64. 
The major difference in outputs from a computerized system and a paper-based systems is the number and speed with which outputs from a computerized system can be generated.
 

 65. 
An example of a source document is a receiving report.
 

 66. 
A bill of lading is a written contract between the shipper and the consignee.
 

 67. 
A journal is a listing in chronological order that is created to record a particular type of transaction.
 

 68. 
Each control account in the general ledger has one subsidiary ledger that contains several accounts.
 

 69. 
The balance sheet reports the profitability of an organization for a stated period of time such as a month or a year.
 

 70. 
The sales transaction file is used to update the customer master file, the inventory master file, the sales order open file, and the customer invoice open file.
 



 
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