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ACCT 3332 Ch 4 and 5 Quiz 3

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

 1. 
What is an example of a transaction?
a.
A meeting between middle and upper-level managers
b.
Deciding on corporate strategy
c.
Depreciation of equipment
d.
Taking action on a customer for non-payment of goods/services
 

 2. 
Which of the following is (are) true regarding transactions?
a.
May be reported individually
b.
May be reported as part of aggregate information
c.
May be reported to external auditors only
d.
A & B
e.
B & C
 

 3. 
Which of the following is necessary for printing of the sales journal?
a.
Open customer invoice file and customer master file
b.
Customer master file and cash receipts transaction file
c.
Customer master file and sales transaction file
d.
Sales transaction file and open customer invoice file
 

 4. 
Which of the following statements is not correct?
a.
The sales transaction file is used to update the customer master file.
b.
The open customer invoice file holds data about incomplete transactions.
c.
The customer master file is used to update the open customer invoice file.
d.
The sales transaction file captures detailed sales transaction data in chronological order.
 

 5. 
What are the primary activities of an accounting information system?
a.
Input (capture), store, process, output (communicate) data
b.
Interface, communicate, store, process information
c.
Input, store, post, process information
d.
Classify, compare, summarize, calculate data
 

 6. 
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.
 

 7. 
What are the support activities of an accounting information system?
a.
People, input, process
b.
People, technology, input
c.
People, technology, control
d.
People, process, control
 

 8. 
Which of the following statements about the input activity is correct?
a.
Input is an interface between users and the accounting system.
b.
Input is an information process activity that produces an output.
c.
Input captures and classifies transactions in an accounting system.
d.
Input captures and transforms data according to a prescribed set of instructions.
 

 9. 
When inputting data, what is one of the most common errors that can occur?
a.
Misspelling of names
b.
Transposing digits in a number
c.
Making an incorrect journal entry
d.
Duplicating entries
 

 10. 
Which of the following is not true about input data?
a.
Input data is an interface between the computer software and the accounting system.
b.
Input data can be captured on source documents.
c.
Input data can be prone to errors.
d.
Input data can be verified by various activities.
 

 11. 
Which of the following is not a type of processing function?
a.
Retrieving
b.
Sorting
c.
Comparison
d.
Summarization
 

 12. 
Which of the following is one of the most common processing activities?
a.
Merging
b.
Summarization
c.
Comparison
d.
Updating, or posting
 

 13. 
What is a process activity that updates balances in a master file?
a.
Classification
b.
Calculation
c.
Posting
d.
Summarization
 

 14. 
Which of the following is not an example of master file maintenance?
a.
Increasing and decreasing account balances in records
b.
Adding new records to a file
c.
Deleting unwanted records from a file
d.
Changing the content of existing records
 

 15. 
What does the data processing activity of sorting involve?
a.
Rearranging the records in a file into a meaningful sequence
b.
Determining which data must be archived
c.
Grouping all files into related categories
d.
Grouping all data by specific type of account
 

 16. 
What is an example of a status report?
a.
Income statement
b.
List of all sales transactions for a certain period
c.
Report on effectiveness of controls in the system
d.
Report of the estimated purchases for the year
 

 17. 
What are information formats called?
a.
Paper reports
b.
Activity requirements
c.
General ledger summaries
d.
Forms
 

 18. 
Which of the following statements regarding subsystems is true?
a.
Subsystems are defined in the broadest terms.
b.
The same subsystems are present in all types of organizations.
c.
Subsystems perform well-defined transaction-processing functions.
d.
Subsystems are referred to as "logical branches" in accounting software packages.
 

 19. 
What is the subsystem labeled (2)?
a.
General ledger
b.
Cost accounting
c.
Customer invoicing
d.
Inventory management
 

 20. 
What is the subsystem labeled (5)?
a.
Receiving
b.
General ledger
c.
Shipping
d.
Customer invoicing
 

 21. 
Which of the following files is not used in the customer invoicing subsystem?
a.
Sales transaction file
b.
Open sales order file
c.
Customer master file
d.
Open customer invoice file
 

 22. 
Which of the following is a decision support activity?
a.
The sales subsystem
b.
The accounts receivable subsystem
c.
The sales analysis subsystem
d.
The shipping subsystem
 

 23. 
The sales analysis subsystem refers to what activity and supports which business process?
a.
Shows current sales information; supports the financial process.
b.
Matches sales with accounts receivable information; supports the revenue process.
c.
Analyzes historical sales data; supports the revenue process.
d.
Matches sales with accounts receivable information; supports the financial process
 

 24. 
Assume that data from the purchases transaction file have been transferred to the general journal transaction file. The general journal transaction file has been used to update the general ledger master file. What is the result if a trial balance is prepared at this time?
a.
Inventory shows an increase, and accounts payable shows a decrease
b.
Inventory shows a decrease, and accounts payable shows an increase
c.
Inventory shows an increase, and accounts payable shows an increase
d.
Inventory shows no change, and accounts payable shows no change
 

 25. 
Assume a firm has paid an invoice for merchandise it purchased earlier and the appropriate data have been entered in the cash disbursements transaction file. Data from the cash disbursements transaction file have been transferred to the general journal transaction file. What is the result if a trial balance is prepared at this point?
a.
Accounts payable shows a decrease, and cash shows an increase
b.
Accounts payable shows no change and cash shows no change
c.
Accounts payable shows a decrease, and cash shows a decrease
d.
Accounts payable shows an increase, and cash shows an increase
 

 26. 
Of the following business organizations, which one requires daily financial statement preparation?
a.
An oil drilling rig manufacturer
b.
A bank
c.
A tool manufacturing company
d.
A video store
 

 27. 
What kind of reporting calls for arranging together actual data for a current period and actual data for a prior period?
a.
Function reporting
b.
Financial reporting
c.
Exception reporting
d.
Comparative reporting
 

 28. 
What is the arranging of records in order of severity of the problem with the most severe at the beginning of the reports known as?
a.
Exception reporting
b.
Function reporting
c.
Record sequencing
d.
Comparative reporting
 

 29. 
Which of the coding methods represents a logical association between the characters forming the code and the item being identified?
a.
Block coding
b.
Sequence code
c.
Group code
d.
Mnemonic code
 

 30. 
Postal zip codes are examples of which type of coding system?
a.
Sequence code
b.
Mnemonic code
c.
Group code
d.
Block code
 

 31. 
What is one problem with exception reporting?
a.
It allows management to focus on data with significant deviations from expected results.
b.
It requires selection based on differences.
c.
It may have the most severe problems appearing on the report’s back pages.
d.
It directs management to unusual results.
 

 32. 
Which type of data is more useful in accounting reports that cover a short period of time?
a.
Financial
b.
Physical
c.
Abstract
d.
Temporal
 

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

 33. 
It is possible for a transaction to be initiated by programmed instructions in a computer program.
 

 34. 
A transaction's final resting place ordinarily is in an archive file.
 

 35. 
All transaction data are classified by the account they affect.
 

 36. 
File maintenance is a routine process that occurs at specific time intervals.
 

 37. 
The two interfaces between an accounting system and its users are the outputs and the general ledger file.
 

 38. 
Status reports focus on the balances recorded in the transaction files after updating has been completed.
 

 39. 
More than one status or activity report may be produced from a single file, each formatted to meet a different need.
 

 40. 
Output from the accounting system is reserved for internal users only.
 

 41. 
Each of the accounting subsystems, for example, purchase order processing, receiving, vendor invoicing, cash disbursements, is a stand-alone system.
 

 42. 
Any organization that provides goods or services on demand requires a sales subsystem.
 

 43. 
A cash sale is recorded in only the cash receipts transaction file.
 

 44. 
When a user enters a customer code in the sales transaction screen, the user also enters the customer name.
 

 45. 
A new account is added to the Chart of Accounts through the sales transaction file.
 

 46. 
The transaction data in the general journal transaction file are used to update the customer master file.
 

 47. 
The income statement and the balance sheet are prepared from data in the general ledger master file.
 

 48. 
The four business processes in an accounting information system are revenue, purchasing, inventory, and investment.
 

 49. 
One of the subsystems of the purchasing process is receiving.
 

 50. 
Effective exception reporting requires the ability to select records based on the similarities between an account’s current balance and its prior year’s balance.
 

 51. 
Numbers that should be used for unique identifiers for coding an audit trail are pre-numbered documents that represent the initiation of a transaction and numbers of externally generated documents.
 

 52. 
A purchase order number would not be suitable as a reference identifier in an audit trail.
 

 53. 
The meaning of comparative reporting is that only data reflecting a significant deviation from expected, budgeted, or normal should be reported to managers.
 

 54. 
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.
 

 55. 
A sequence code uniquely identifies an object and is assigned in numerical sequence.
 

 56. 
A block code leads an accountant or auditor from a data item’s specific location in the accounting information system to its preceding or successor location.
 



 
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