Accounting Information Systems, 9eTest Bank, Chapter 2

Accounting Information Systems, 9e—Test Bank, Chapter 2

© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Chapter 2—Introduction to Transaction Processing

TRUE/FALSE

• Processing more transactions at a lower unit cost makes batch processing more efficient than real-time

systems.

ANS: T PTS: 1

• The process of acquiring raw materials is part of the conversion cycle.

ANS: F PTS: 1

• Directing work-in-process through its various stages of manufacturing is part of the conversion cycle.

ANS: T PTS: 1

• The portion of the monthly bill from a credit card company is an example of a turn-around document.

ANS: T PTS: 1

• The general journal is used to record recurring transactions that are similar in nature.

ANS: F PTS: 1

• Document flowcharts are used to represent systems at different levels of detail.

ANS: F PTS: 1

• Data flow diagrams represent the physical system.

ANS: F PTS: 1

• System flowcharts are often used to depict processes that are handled in batches.

ANS: T PTS: 1

• Program flowcharts depict the type of media being used (paper, magnetic tape, or disks) and terminals.

ANS: F PTS: 1

• System flowcharts represent the input sources, programs, and output products of a computer system.

ANS: T PTS: 1

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Accounting Information Systems, 9e—Test Bank, Chapter 2

© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

• Program flowcharts are used to describe the logic represented in system flowcharts.

ANS: T PTS: 1

• Batch processing systems can store data on direct access storage devices.

ANS: T PTS: 1

• Selecting a specific record from a master file containing millions of records requires a direct access file

environment.

ANS: T PTS: 1

• The box symbol represents a temporary file.

ANS: F PTS: 1

• Auditors may prepare program flowcharts to verify the correctness of program logic.

ANS: T PTS: 1

• A control account is a general ledger account which is supported by a subsidiary ledger.

ANS: T PTS: 1

• The most significant characteristic of direct access files is access speed.

ANS: T PTS: 1

• Real time processing is used for routine transactions in large numbers.

ANS: F PTS: 1

• Batch processing is best used when timely information is needed because this method processes data

efficiently.

ANS: F PTS: 1

• An inverted triangle with the letter “N” represents a file in “name” order.

ANS: F PTS: 1

• Real-time processing in systems that handle large volumes of transactions each day can create

operational inefficiencies.

ANS: T PTS: 1

Accounting Information Systems, 9e—Test Bank, Chapter 2

© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

• Operational inefficiencies occur because accounts unique to many concurrent transactions need to be

updated in real time.

ANS: F PTS: 1

• Operational inefficiencies occur because accounts common to many concurrent transactions need to be

updated in real time.

ANS: T PTS: 1

• Batch processing of non-critical accounts improves operational efficiency.

ANS: T PTS: 1

• Batch processing of accounts common to many concurrent transactions reduces operational efficiency.

ANS: F PTS: 1

• The block code is the coding scheme most appropriate for a chart of accounts.

ANS: T PTS: 1

• Sequential codes may be used to represent complex items or events involving two or more pieces of

related data.

ANS: F PTS: 1

• Block codes restrict each class to a pre-specified range.

ANS: T PTS: 1

• For a given field size, a system that uses alphabetic codes can represent far more situations than a

system with that uses numeric codes.

ANS: T PTS: 1

• Mnemonic codes are appropriate for items in either an ascending or descending sequence, such as the

numbering of checks or source documents.

ANS: F PTS: 1

• The flat-file approach is most often associated with so-called legacy systems.

ANS: T PTS: 1

• In a flat-file system, files are easily shared by users.

ANS: F PTS: 1

Accounting Information Systems, 9e—Test Bank, Chapter 2

© 2015 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

MULTIPLE CHOICE

• Which system is not part of the expenditure cycle?
• cash disbursements
• Payroll
• production planning/control
• purchases/accounts payable

ANS: C PTS: 1

• Which system produces information used for inventory valuation, budgeting, cost control,

performance reporting, and make-buy decisions?

• sales order processing
• purchases/accounts payable
• cash disbursements
• cost accounting

ANS: D PTS: 1

• Which of the following is a turn-around document?
• remittance advice
• sales order
• purchase order
• payroll check

ANS: A PTS: 1

• The order of the entries made in the ledger is by
• transaction number
• account number
• Date
• User

ANS: B PTS: 1

• The order of the entries made in the general journal is by
• Date
• account number
• User
• customer number

ANS: A PTS: 1