Copyright 2018 Pearson Education, Inc.

1 Copyright © 2018 Pearson Education, Inc.Accounting Information Systems, 14e (Romney/Steinbart) Chapter 2 Overview of Transaction Processing and Enterprise Resource Planning Systems

• Describe the data processing cycle used to process transactions, including how data is input,

stored, and processed and how information is output.1) Which of the following commonly initiates the data input process?

• a business activity
• automatic batch processing
• an accounting department source document
• a trial balance query

Answer: A

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

2) A typical source document could be

• some type of paper document.
• a computer data entry screen.
• the company's financial statements.
• both A and B

Answer: D

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

3) Which of the following is not considered a source document?

• A copy of the company's financial statements.
• A copy of the company's shipping document.
• A copy of the company's sales journal.
• A copy of the company's ledger.

Answer: A

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

Accounting Information Systems 14th Edition Romney Test Bank Visit TestBankDeal.com to get complete for all chapters

2 Copyright © 2018 Pearson Education, Inc.4) Which step below is not considered to be part of the data processing cycle?

• data input
• feedback from external sources
• data storage
• data processing

Answer: B

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

5) John Pablo works in the accounting department of a multinational manufacturing company.His job includes updating accounts receivable based on sales orders and remittance advices. His responsibilities are part of the company's

• revenue cycle.
• expenditure cycle.
• financing cycle.
• production cycle.

Answer: A

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Reflective Thinking

6) John Pablo works in the accounting department of a multinational manufacturing company.His job includes updating accounts payable based on purchase orders and checks. His responsibilities are part of the company's

• revenue cycle.
• expenditure cycle.
• financing cycle.
• production cycle.

Answer: B

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Reflective Thinking

3 Copyright © 2018 Pearson Education, Inc.7) Many small businesses choose to outsource their payroll activities to firms that specialize in providing payroll services. Dolores Yu operates a payroll processing business in Calabasas, California. When she sends bills out to her clients, her work is part of her firm's

• revenue cycle.
• expenditure cycle.
• financing cycle.
• production cycle.

Answer: A

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Reflective Thinking

8) A delivery of inventory from a vendor, with whom a credit line is already established, would be initially recorded in which type of accounting record and as part of what transaction cycle?

• purchases journal; expenditure cycle
• general journal; expenditure cycle
• general ledger; expenditure cycle
• cash disbursements journal; production cycle

Answer: A

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Challenging

AACSB: Reflective Thinking

9) Making payments to a vendor, with whom a credit line is already established, would be initially recorded in which type of accounting record and as part of what transaction cycle?

• purchases journal; expenditure cycle
• general journal; expenditure cycle
• general ledger; expenditure cycle
• cash disbursements journal; expenditure cycle

Answer: D

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Challenging

AACSB: Reflective Thinking

10) Describe the basic cycles and business activities for a typical merchandising company.Answer: Revenue cycle — deliver inventory to customers and collect cash. Expenditure cycle — receive goods and services from vendors and pay cash. Human resources cycle — track hours worked by employees and record withholding data.

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

4 Copyright © 2018 Pearson Education, Inc.11) Identify the four parts of the transaction processing cycle.

• data input, data storage, data processing, information output
• data input, data recall, data processing, information output
• data input, data recall, data transmission, information output
• data input, data recall, data transmission, data storage

Answer: A

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

12) What is the most frequent revenue cycle transaction?

• purchase of inventory
• receipt of cash
• sale to customer
• billing

Answer: C

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

13) The existence of relevant data guarantees the data are useful.

Answer: FALSE

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Easy

AACSB: Analytical Thinking

14) Identify the item below that is not one of the four different types of data processing activities.

• creating
• reading
• using
• deleting

Answer: C

Concept: Transaction processing

Objective: Learning Objective 1

Difficulty: Moderate

AACSB: Analytical Thinking