To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com ACCOUNTING INFORMATION SYSTEMS CONTROLS AND PROCESSES TURNER / WEICKGENANNT CHAPTER 2: Foundational Concepts of the AIS TEST BANK – CHAPTER – TRUE/FALSE: Technology has done little to help the hospitality industry improve the quality of services to customers Using IT will change the business processes and the way accounting data is collected When a business process occurs, there must be a way of capturing the data generated to input it into the AIS There aren’t may organizations that need to use paper documents anymore Once the data is entered into the AIS, the source document then isn’t considered a part of the audit trail In a manual system the general ledger is the book of original entry In large companies, many legacy systems run on host-based mainframe computers One of the advantages of a legacy system is that it supports business processes that are not contained in generic accounting software In today’s AIS environment, because of a company’s unique needs, new software is most often developed within the organization rather than purchasing it 10 Purchased software is usually has a low cost, shorter implementation time, and fewer bugs 11 The software market segment for small companies is usually for companies who have less than $10,000,000 in revenue 12 Oracle is considered as a software program for the beginning ERP market 13 ERP systems usually don’t allow the user the flexibility to set it up to customize it for their specific business needs 14 Bar codes, POS systems, EDI, and e-business systems are technology systems that enable the input of data 15 A bar code reader can record the start and end of an employee’s work 16 EDI is the intracompany, computer-to-computer transfer of business documents in a standard business format To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 17 Dedicated lines are used to transmit data in e-business systems 18 Batch processing is generally easier to control than other types of computerized systems, since batch totals can be used to ensure the batch was processed correctly 19 Online processing is best suited to applications in which there is a small volume of records, and only a few records are needed to process any individual transaction 20 One of the advantages of a real time system is that the system checks for input errors, and errors can be corrected immediately 21 The exclusive output of an AIS is that it produces trading partner documents such as checks, invoices, and statements 22 The output of an AIS is for external users only, such as trading partner documents and external reports including financial statements 23 Internal reports produced by an AIS are designed specifically for the function that is the subject of the report 24 Documentation allows the accountant to analyze and understand the procedures and processes of a business process and the systems that capture and record accounting data 25 A system flow chart describes in a graphic way the entire system and goes into great detail about each of the processes 26 A special kind of system flow chart is a document flow chart 27 In an ER diagram entities are the nouns, and attributes are characteristics of the entities 28 The relationships between entities in ER diagrams are depicted by a concept called co-ordinality which refers to how many instances an entity relates to each instance of another entity 29 One of the computers in client-server computing is usually a PC-type computer 30 In client-server computing a PC-type computer is more efficient in managing large databases and extracting data from databases 31 One of the key aspects of computerizing the AIS is that the greater the system is computerized the lesser the chance for someone to cover up their unethical behavior 32 REA restrictions may not be compatible with all of the accounting conventions To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com ANSWERS TO TEST BANK – CHAPTER – TRUE/FALSE: False True 15 True True False 16 False True 10 True 17 False False 11 False 18 True False 12 False 19 False False 13 False 20 True True 14 True 21 False 22 23 24 25 26 27 28 False True False False True True False 29 30 31 32 True False False True TEST BANK – CHAPTER – MULTIPLE CHOICE: 33 IT systems have dramatically affected many aspects of business Which of the following is not one of the changes? A Data input into accounting information systems B The way that data is processed in the system C The accounting information that is reported by the system D The outputs of the system 34 Which of the following statements is false? A Technology has allowed many industries to provide better, faster, and higher quality information B Business process must adapt to the new technologies C Business processes, IT systems, and the accounting information system are inextricably linked D IT systems have not had a major impact on the input of data into the accounting information system 35 The system that captures, records, processes, and reports accounting information is referred to as a(n): A Accounting information system B Management information system C System of business processes D Client-server system 36 Information captured by a system is generated by financial transactions: A Within the organization only B Between an organization and its customers only C Between an organization and its vendors only D Within the organization and between an organization and its customers and vendors 37 A prescribed sequence of work steps completed in order to produce a desired result for an organization is the definition of: A Accounting information system B Business process C Business transaction D Financial statement To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 38 Which of the following statements, related to a business process, is not a true statement? A It has a well-defined beginning and end B Usually takes a long-period of time to complete C Occur so that the organization may serve its customers D Is initiated by a particular kind of event 39 When a transaction occurs there are systematic and defined steps that take place within the organization to complete all of the underlying tasks These “defined steps” are referred to as: A Business Processes B Financial Transactions C Accounting Information Systems D Customer Service Arenas 40 The A B C D substance of an accounting information system includes: Initiate an event Steps taken to create a business process Capturing, recording, processing and reporting accounting information Selection of client-server computing 41 Which of the following is not one of the general categories of business processes? A Revenue Processes B Inventory Processes C Expenditure Processes D Conversion Processes 42 Which of the following correctly states the order of steps in a manual accounting system? A Source Documents, Journals, Ledgers, Reports B Journals, Source Documents, Ledgers, Reports C Source Documents, Ledgers, Journals, Reports D Ledgers, Reports, Journals, Source Documents 43 Which of the following statements is true? A Most accounting systems in use today are computerized systems B All accounting systems, whether computerized or not, must capture data, process the data, and provide outputs C It is not necessary for an accounting system to maintain summary information if it maintains detail information D The general ledger will be summarized and then posted to the subsidiary ledger 44 The A B C D choice of accounting information system will depend on all of the following except: The size of the organization The philosophy of management The ability of the company to capture information The nature of its processes To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 45 The A B C D record that captures the key data of a transaction is called: Turnaround document Ledger Journal Source document 46 In order to organize the study of accounting information systems, the authors divided the systems in place into three categories Which of the following is not one of those categories? A Manual Systems B Client-Server Systems C Legacy Systems D Integrated IT Systems 47 Which of the following statements is true as it relates to manual systems? A Few small organizations use computerized accounting systems B Computerized systems rely on some manual record keeping C Most medium sized organizations rely on manual accounting systems D When using a computerized system, it is not necessary to understand the manual system 48 Which of the following is an example of a source document? A Purchase order B Employee time card C Cash receipts D All of the above are examples of source documents 49 A source document serves important functions in the accounting system Which of the following is not one of those functions? A Provides the output data for financial reports B Serves as part of the permanent audit trail C Triggers beginning of business processes D Provides the input data to record the transaction 50 An output of the accounting system that can be used as an input in a different part of the accounting system is referred to as: A Round table document B Source document C Turnaround document D Financial report 51 Which of the following provides details for the entire set of accounts used in the organization’s accounting systems? A General Ledger B Special Journal C Subsidiary Ledger D General Journal To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 52.The book of original entry for any transaction not recorded in a special journal is the: A Special Ledger B General Ledger C General Journal D Subsidiary Journal 53 Special journals are created, or established, to record specific types of transactions Which of the following is not one of the special journals? A Fixed Asset Journal B Cash Receipts Journal C Purchases Journal D Payroll Journal 54 The purpose of this item is to maintain the detailed information regarding routine transactions, with an account established for each entity A Purchases Journal B Subsidiary Ledger C General Journal D General Ledger 55 Which of the following items is not one of the manual records in a manual accounting system? A Journals B Ledgers C Source Documents D Trial Balance 56 Many of the accounting software systems consist of modules Which of the following statements is false related to these modules? A Are separate programs for different business processes B Include accounts receivable, payroll, and accounts payable C Have essentially the same purpose as special journals and special ledgers D Are referred to as special purpose systems 57 An existing system within the organization that uses older technology is called a(n): A Manual system B Legacy system C Client-server system D Modern integrated system 58 Which of the following statements does not refer to a legacy system? A Includes source documents, journals, and ledgers B Have been in place for may years C Much time has been spent developing, maintaining, and customizing the system D Often based on old or inadequate technology To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 59 Organizations are often reluctant to abandon their legacy systems because: A The system was customized to meet specific needs B The process to replace the systems is inexpensive C The time involved for replacement is minimal D Information contained on the system is outdated 60 Which of the following is not one of the advantages of maintaining the legacy systems? A The system often supports unique business processes not inherent in generic accounting software B The system contains invaluable historical data that may be difficult to integrate into a new system C The system is well supported and understood by existing personnel who are already trained to use the system D The system has been customized to meet specific needs of the organization 61 Which of the following is one of the disadvantages of maintaining the legacy systems? A Often support unique business processes not inherent in generic accounting software B May not easily run on new hardware C Contain invaluable historical data D Existing personnel are already trained to use the system 62 Which of the following is not one of the disadvantages of maintaining the legacy systems? A They become difficult to integrate when companies merge or acquire other companies B They are often difficult to modify to make them web based C They are well supported and understood by existing personnel D They lack adequate, up-to-date supporting documentation 63 Frontware, which adds modern, user friendly screen interfaces to legacy systems are referred to as: A Turnaround software B Graphical user face C COBOL D Screen scrapers 64 Instead of completely replacing their systems, organizations often try to use new technology to enhance existing systems Which of the following is not one of the approaches taken by the se organizations? A Enterprise application integration B Screen scrapers C Enterprise resource planning D Using interface bridges 65 A set of processes, software and hardware tools, methodologies, and technologies to integrate software systems is referred to as: A Enterprise application integration B Client-server interface C Screen scrapers D Complete integration To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 66 An use of enterprise application integration would include: A Bridge the legacy systems to the new hardware and software B Intended to consolidate, connect, and organize all of the computer applications, data, and business processes C Allow real-time exchange and management of all the critical information D All of the listed items would be included 67 Which of the following statements is false? A When a modern, integrated system is purchased, they are often modified by the IT staff to meet the needs of the organization B New programs sold by software development companies are not as user friendly as the legacy systems C Purchased software has a lower cost, shorter implementation time, and fewer bugs D The modern, integrated systems typically use the latest technology 68 There were four market segments identified by the authors in chapter Which of the following is not one of those segments? A Small Company Systems B Midmarket Company Systems C Legacy Company Systems D Beginning ERP Systems 69 A company with revenue of $50 million would be most likely to purchase software from which one of the four market segments? A Midmarket Segment B Beginning ERP Segment C Tier 1: ERP Segment D Integrated Segment 70 Quickbooks and Peachtree would be part of which market segment of accounting software? A Small Segment B Midmarket Segment C Beginning ERP Segment D Legacy Segment 71 SAP A B C D and PeopleSoft are part of which market segment of accounting software? Small Segment Midmarket Segment Beginning ERP Segment Tier ERP Segment 72 Five different input methods were identified by the authors Which of the following is one of those input methods? A EDI B ERP C EAI D EPS To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 73 Source documents are usually preprinted and sequentially prenumbered Which of the following is not one of the reasons for this prenumbering and preprinting? A To have an established format to capture data B To assure that there is no duplicate source documents C To be sure that all of the documents have been recorded D To be sure that all of the documents are accounted for 74 This method of input for AIS is considered to be time consuming and error prone due to the human effort required to write on some documents and to manually key in the data: A Bar Coding B Key Punching C Source Documents and Keying D Point of Sale Systems 75 The use of employee prepared time cards and the entering of the time worked by the payroll department is a good example of which type of input method for AIS? A EDI B Bar Coding C Point of Use System D Source Documents and Keying 76 A printed code consisting of a series of vertical, machine readable, rectangular bars and spaces that vary in width and are arranged in a specific ways to represent letters and numbers are referred to as: A COBOL Coding B Bar Coding C Key Coding D EOS Coding 77 Bar codes can be used in a number of different instances for input: A Products that are sold B Identification of individuals C Track work in process D Prepare financial statements 78 A method of using hardware and software that captures retail sales transactions by standard bar coding is referred to as: A Point of Sale System B COBOL System C Inventory Tracking System D UPC System 79 The A B C D letter UPC, when relating to bar codes, stands for: United Price Code Universal Product Code Unity Product Cost Ulterior Price Company To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 80.The inter-company, computer-to-computer transfer of business documents in a standard business format is referred to as: A Electronic Data Interchange B E-Business Document Identification C Earned Daily Interest D Electronic Document Idea 81 The A B C D major difference between EDI and e-business is: EDI uses the internet and e-business uses dedicated networks EDI does not require the use of computers EDI uses dedicated networks and e-business uses the internet There is no difference between EDI and e-business 82 After the accounting information has been input into the accounting system, it must be processed Process accounting data involves: A Source documents and keying B Bar codes and point of sale C Electronic data interchange and e-business D Calculations, classification, and summarization 83 In a A B C D manual accounting system, the processing of accounting information includes: Recording in the ledger Posting to the journal Closing the necessary ledger accounts Adjusting the journal 84 When all similar transactions are grouped together for a specified time and then processed together as a group, the process is referred to as: A Grouped processing B Batch processing C Bound processing D Unit processing 85 An organization that has applications having large volumes of similar transactions that can be processed at regular intervals is best suited to use which method of processing? A Real-time processing B Point of sale processing C Batch processing D Sequential processing 86 Which of the following is not one of the advantages of batch processing? A It is generally easier to control than other types of computerized systems B It uses less costly hardware and software C It is very efficient for large volumes of like transactions when most items in the master file are used D Information can be provided to users on a timely basis To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 106 The documenting system that shows the flow of documents and information among departments or units within an organization is called a: A System Flowchart B ER Diagram C Document Flowchart D Data Flow Diagram 107 This document system is used by systems professionals to show the logical design of a system The advantage of the method is that it uses only four symbols A Data Flow Diagram B ER Diagram C System Flowchart D Document Flowchart 108 This document system is used by systems professionals to show the logical design of a system The advantage of the method is that it uses only four symbols The symbol used to represent both sources and destinations of data is a(n): A Rectangle with rounded corners B Open-ended rectangle C Arrow D Rectangle with squared corners 109 This document system is used by systems professionals to show the logical design of a system The advantage of the method is that it uses only four symbols The symbol used to represent any task or function performed is a(n): A Rectangle with rounded corners B Open-ended rectangle C Arrow D Rectangle with squared corners 110 This document system is used by systems professionals to show the logical design of a system The advantage of the method is that it uses only four symbols The symbol used to represent a data store or the storage of data is a(n): A Rectangle with rounded corners B Open-ended rectangle C Arrow D Rectangle with squared corners 111 This document system is used by systems professionals to show the logical design of a system The advantage of the method is that it uses only four symbols The symbol used to represent the flow of data is a(n): A Rectangle with rounded corners B Open-ended rectangle C Arrow D Rectangle with squared corners To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 112 The document system is a pictorial representation of the logical structure of databases It identifies the entities, the attributes of the entities, and the relationship between the entities A ER Diagram B System Flowchart C Entity Flowchart D Process Map 113 When discussing entity relationship diagrams, this is considered to be a noun that represents items in the accounting system: A Attribute B Relationship C Entity D Flow 114 When discussing entity relationship diagrams, this is considered to be a characteristic of an entity A Attribute B Flow C Relationship D Field 115 The A B C D rectangle used in an entity relationship diagram is used to represent a(n): Attribute Relationship Entity Process 116 The A B C D diamond used in an entity relationship diagram is used to represent a(n): Attribute Relationship Entity Decision 117 The A B C D oval used in an entity relationship diagram is used to represent a(n): Attribute Relationship Entity On-page Connector 118 The term that refers to how many instances of an entity relates to each instance of another entity is: A Supervisor B Symbol C Relationship D Cardinality To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 119 When an organization has this type of network, there are two types of computers networked together to accomplish the application processing: A Point of sale B Batch processing C Client-server computing D General-subsidiary computing 120 This type of client terminal can accomplish some of the processing tasks in a client-server computing network: A Application terminal B Smart terminal C Subset terminal D Presentation terminal 121 Characteristics of a client-server system include all of the following except: A The client and the server are networked together B The client computer participates in either the processing or the data manipulation C Individual parts of processing are shared between the server and the client D The client normally stores the large database 122 In this type of client-server computing, the client PC manipulates data for presentation but does not any other significant processing A Application presentation B Distributed presentation C Distributed application D ERP application 123 In this type of client-server computing, the client PC participates in application processing including the updates and changes to data that reside on the server A Subset application B Distributed presentation C Distributed application D Real-time application 124 Which of the following statements, regarding ethical considerations in an accounting information system is false? A The accounting information system is often the tool used to either commit or cover up unethical behavior B If there is only one person within the organization with responsibility for maintaining the computer systems, it is not difficult to detect instances of computer fraud C Fraud could be perpetrated and go undetected for a long time if the accounting information system is not carefully monitored D If accountants are well informed about the risks of unethical behavior, they will be better prepared to control those risks To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com ANSWERS TO TEST BANK - CHAPTER 2: 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 C D A D B B A C B A B C D B B D A C A C A B D 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 D B A A A B C D C A D B C B A D A C C D B D A 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 B A C D C B C D B A D C A B A D C B A C A B D 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 B A B D C A D A B C A C A C B A D C B D B C B To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com TEST BANK – CHAPTER – END OF CHAPTER QUESTIONS: 125 Which of the following statements is not true? A Accounting information systems must maintain both detail and summary information B Business processes may vary from company to company C Regardless of the extent of computerization, all accounting information systems must capture data from the transactions within business processes D Business processes categorized as expenditure processes are not intended to be processes that serve customers 126 In a A B C D manual system, an adjusting entry would most likely be initially recorded in a: Special journal Subsidiary ledger General journal General ledger 127 Which of the following is not a disadvantage of maintaining legacy systems? A There are fewer programmers available to support and maintain legacy systems B They contain invaluable historical data that may be difficult to integrate into newer systems C Hardware or hardware parts may be unavailable for legacy systems D It can be difficult to integrate various legacy systems into an integrated whole 128 Which of the following is not an advantage of purchased accounting software, compared with software developed in-house? A It is custom designed for that company B It is less costly C The implementation time is shorter D There are fewer bugs 129 Which of the following is not a method of updating legacy systems? A Enterprise application integration B Backoffice ware C Screen scraper D Complete replacement 130 When categorizing the accounting software market, a company with revenue of $8 million would most likely purchase software from which segment? A Small company B Midmarket C Beginning ERP D Tier ERP To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 131 An IT system that uses touch-screen cash registers as an input method is called: A Electronic data interchange B E-business C Point-of-sale system D Source documents and keying 132 When similar transactions are grouped together for a specified time for processing, it is called: A Online processing B Real-time processing C Batch processing D Group processing 133 Which of the following is not correct regarding the differences in the ways that real-time systems differ from batch systems? A B C D Real-Time Systems Must use direct access files Processing occurs on demand Processing choices are menu-driven Supporting documents are prepared as items are processed Batch Systems Can use simple sequential files Processing must be scheduled Processing is interactive Supporting documents are prepared during scheduled runs 134 In documenting systems, which pictorial method is described as a method that diagrams the actual flow and sequence of events? A Systems flowchart B Process map C Data flow diagram D Entity relationship diagram 135 (CMA Adapted) A company in Florida provides certified flight training programs for aspiring new pilots of small aircraft Although awarding a pilot’s license requires one-on-one flight time, there is also much preparatory training conducted in classroom settings The company needs to create a conceptual data model for its classroom training program, using an entity-relationship diagram The company provided the following information: Floridian Flight, Inc has 10 instructors who can teach up to 30 pilot trainees per class The company offers 10 different courses, and each course may generate up to eight classes Identify the entities that should be included in the entity-relationship diagram: A Instructor, Floridian Flight Inc., Pilot Trainee B Instructor, Floridian Flight Inc., Course, Enrollment, Class C Floridian Flight Inc., Enrollment, Course, Class, Pilot Trainee D Instructor, Course, Enrollment, Class, Pilot Trainee To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 136 In a client-server system, when the client PC manipulates data for presentation, but does not any other significant processing, it is called: A Distributed Presentation B Distributed Application C Distributed Database D Distributed Processing ANSWERS TO END OF CHAPTER QUESTIONS 125-136 125 D 128 A 131 C 134 B 126 C 129 B 132 C 135 D 127 B 130 B 133 C 136 A TEST BANK – CHAPTER – SHORT ANSWER QUESTIONS: 137 What is the relationship between business processes and the accounting information system? Answer: As the systematic steps are undertaken within a business processes, the corresponding data generated must be captured and recorded by the accounting information system 138 Why is it sometimes necessary to change business processes when IT systems are applied to business processes? Answer: When IT systems are applied to business processes, some of the detailed transaction data may no longer be taken from paper-based source documents, and manual processing may no longer be needed to summarize and post that data Accordingly, some of the related manual steps within the business process can be eliminated or changed 139 Are manual systems and processes completely outdated? Answer: No, manual systems and business processes are not completely outdated Manual records may still be involved in the business processes of even the largest and most sophisticated accounting information systems 139 What is the purpose of source documents? Answer: Source documents capture the key data of a transaction, including date, purpose, entity, quantities, and dollar amounts 140 What are some examples of turnaround documents that you have seen? Answer: An example of a turnaround document is a credit card statement, where the statement itself (as received in the mail by the credit card holder) represents the output of the accounting information system of the credit card company When the credit card holder returns the top portion of the statement with his or her payment, it then becomes an input to the company’s cash collection process To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 141 Why would the training of employees be an impediment to updating legacy systems? Answer: One of the advantages of legacy systems is that they are well supported and understood by existing personnel who are already trained to use the system Since those legacy systems are not generally based on user-friendly interfaces and they tend to be use software written in older computer languages, there is likely to be a significant investment of time and human resources required to maintain the system In addition, legacy systems are often difficult to modify Employees may be reluctant to forego their investment or to commit additional time in support of an updated system that becomes more challenging to maintain 142 Why is it true that the accounting software in and of itself is not the entire accounting information system? Answer: The accounting software is not the entire accounting information system; rather, it is a tool that supports the organization’s unique business processes The software must often be customized to meet the needs of the organization and to integrate well with the manner in which transactions are processed The human resources and/or manual records and documents that are part of the business processes are also an integral part of the accounting information system 143 How is integration across business processes different between legacy systems and modern, integrated systems? Answer: Integration across business processes within a legacy system is extremely challenging and costly, as those systems are usually not based on user-friendly interfaces that are difficult to modify It is also difficult to find programmers to perform such tasks The result is that organizations which integrate business processes between legacy systems typically must resort to enhancements to their existing software or bridging their existing software to new systems or interfaces On the other hand, modern, integrated systems are based on a single software system that integrates many or all of the business processes within the organization, thus eliminating the coordination and updating efforts required by the older systems 144 Why you think there are different market segments for accounting software? Answer: There are different market segments for accounting software to support the different needs of organizations depending on their size and the complexities of their business processes 145 How would accounting software requirements for large corporations differ from requirements for small companies? Answer: Larger companies tend to need more power and functionality from their software systems because of their size and the complexities of their business processes This may especially be true of large, multinational corporations which need to integrate business processes located all around the globe Small companies are not likely to need such extensive power and functionality from their systems To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 146 What are some of the differences between ERP systems and accounting software for small companies? Answer: ERP systems are multimodule software systems designed to manage all aspects of an enterprise The modules (financials, sales, purchasing, inventory management, manufacturing, and human resource) are based on a relational database system that provides extensive set-up options to facilitate customization to specific business needs Thus, the modules work together to provide a consistent user interface These systems are also extremely powerful and flexible Many of the software systems in the small and mid market categories are not true ERP systems with fully integrated modules; however, these systems assimilate many of the features of ERP systems 147 Why would accounting software development companies be interested in expanding their software products into other market segments? Answer: Software development companies and software vendors often attempt to increase the appeal of their software products to more than one market segment when the features of their products may fit the needs of different sized organizations In addition, there is a trend toward increasing the functionality of existing systems to offer increased flexibility and functionality to meet such diverse needs Since business organizations make considerable investments in the software products that comprise their accounting information systems, it is not surprising that there is much competition among the companies that provide these systems 148 Given the business and accounting environment today, you think it is still important to understand the manual input of accounting data? Answer: Manual input of data is still important to understand in today’s accounting environment Many business organizations still use some manual processes for reading source documents and keying the relevant information into the accounting information system Even high-tech point of sale systems require manual processes to input the accounting data contained on bar codes 149 What are the advantages to using some form of IT systems for input, rather than manual input? Answer: Using IT systems for input has the advantages of reducing the time, cost, and errors that tend to occur with manual data input 150 Why would errors be reduced if a company switched input methods from manual keying of source documents to a bar code system? Answer: With manual input, human efforts are required to write on the source documents and to manually key in the data Errors tend to occur with such a system On the other hand, the manual steps of writing and keying are eliminated when using a bar code system, thus reducing the likelihood of error 151 In general, what types of transactions are well suited to batch processing? Answer: Batch processing is best suited to applications having large volumes of similar transactions that can be processed at regular intervals, such as payroll To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 152 Why might the time lag involved in batch processing make it unsuitable for some types of transaction processing? Answer: By necessity, batch systems involve a time lag while all transactions in the batch are collected This means that available information in files will not always be current, as it would be in real-time systems Therefore, when constantly up-to-date information is needed by users on a timely basis, batch processing is likely to be unsuitable for transaction processing 153 How would real-time processing provide a benefit to managers overseeing business processes? Answer: Real-time processing is beneficial for business managers because it provides for system checks for input errors Therefore, errors can be corrected immediately, thus increasing the quality of the information for which the manager is held accountable In addition, real-time systems enhance the efficiency of information availability 154 How internal reports differ from external reports? Answer: Although internal and external reports are both forms of output from an accounting information system, they have different purposes Internal reports provide feedback to managers to assist them in running the business processes under their control On the other hand, external reports (such as the financial statements) are used by external parties to provide information about the business organization 155 What are some examples of outputs generated for trading partners? Answer: Invoices and account statements are examples of outputs generated for customers; whereas checks and remittance advices are examples of outputs sent to vendors 156 Why might it be important to have internal documents produced as an output of the accounting information system? Answer: It is important to produce internal documents as an output of an accounting information system because internal documents provide feedback needed by managers assist them in running the business processes under their control These internal documents can be customized to allow a manger to “drill down” into the details of the process being managed 157 How does documenting a system through a pictorial representation offer benefits? Answer: A pictorial representation of an accounting information system is beneficial because it provides a concise and complete way for accountants to analyze and understand the procedures, processes, and the underlying systems that capture and record the accounting data 158 How does client-server computing divide the processing load between the client and server? Answer: In client-server computing, the processing load is assigned to either the server or the client on the basis of which one can handle each task most efficiently The server is more efficient in managing large databases, extracting data from databases, and running high-volume transaction processing software applications The client is more efficient at manipulating subsets of data and presenting data to users in a user-friendly, graphical-interface environment 159 Why you think the client computer may be a better computer platform for presentation of data? Answer: The client computer is better for presentation of data because it manipulates subsets of data without being bogged down by the processing load of the entire data set In addition, the client computer maintains presentation software in a user-friendly format for reporting purposes To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com TEST BANK – CHAPTER – SHORT ESSAY: 160 Think about your most recent appointment at the dentist’s office Describe the business process that affected you as the patient/customer In addition, describe the administrative and accounting processes that are likely to support this business Answer: As a patient, you would experience the revenue processes as you receive services from the hygienist and dentist You would also be affected by the billing and collections processes when you receive an invoice for services rendered and submit payment for those services The dental office would need to have specific steps in place for recording the services provided to each patient so that they can be properly billed and reported These steps may be very detailed, especially in instances where patient fees must be allocated between dental insurance companies and the patients themselves There would also need to processes in place for purchasing, as a dentist’s office is expected to make regular purchases of supplies as well as to handle the other operating costs of the business Payroll processes would also be needed to account for the time and pay of each employee in the dentist’s office, and fixed asset processes would be needed to support the investments in and depreciation of office furniture and equipment, fixtures, and dental equipment Finally, it is possible that the business may have administrative processes in place to handle investment, borrowing, and capital transactions Once these transactions are recorded, the business must have processes in place to post the related data to the general ledger and summarize it in a manner that facilitates the preparation of financial statements and other accounting reports 161 Describe the purpose of each of the following parts of a manual system: a source document b turnaround document c general ledger d general journal e special journal f subsidiary ledger Answer: a source document – captures the key data of a transaction, including the date, purpose, entity, quantities, and dollar amounts b turnaround document – provides a connection between different parts of the accounting system by serving as the output of one system and the input to another system in a subsequent transaction c general ledger – provides details for the entire set of accounts used in the organization’s accounting systems d general journal – captures the original transactions for non routine transactions, adjusting entries, and closing entries e special journal – captures original transactions for routine transactions such as sales, purchased, payroll, cash receipts, and cash disbursements f subsidiary ledger – maintains detailed information regarding routine transactions, with an account established for each entity To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 162 Consider the accounting information system in place at an organization where you have worked Do you think that it was a manual system, legacy system, or an integrated IT system? Describe one or two characteristics of that accounting information system that lead you to your conclusion Answer: Student responses are likely to vary greatly, as they may refer to any work experience Characteristics of manual systems may include paper-based documents and records, and manual processes performed by humans Characteristics of legacy systems may include older technology including a mainframe computer and the use of software languages such as COBOL, RPG, Basic, and PL1 Characteristics of an integrated IT system include powerful, technologically advanced computer systems with Internet interfaces They are typically marked by efficiencies in terms of limited paperwork and user-friendly interfaces 163 Suppose that a company wants to upgrade its legacy system, but cannot afford to completely replace it Describe two approaches that can be used Answer: One approach to updating a legacy system is to use screen scrapers, or frontware, which add modern, user-friendly screen interfaces to an existing system Another approach is to bridge the legacy system to new hardware and software using enterprise application integration, or EAI 164 Consider the real world example of Hobie Cat Company presented in this chapter a Use Exhibits 2-2 and 2-3 to help you determine the approximate range of Hobie Cat’s annual revenues b What are the advantages Hobie Cat likely realized as a result of having real-time data available? Answer: a Since Hobie Cat’s ERP system falls in the Mid market segment, the company’s revenues must be between $250,000 and $10 million b The advantages to real-time data processing include: • reduced errors, since the system checks for input errors and corrects any errors immediately • more timely information • constantly up-to-date data files • integrated business processes into a single database so that a single system can be achieved To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 165 Using IT systems to input accounting data can reduce costs, time, and errors Give an example showing how you think IT systems can lead to these reductions (cost, time, and errors) Answer: Student responses may vary The responses below apply to the savings a company would be expected to realize upon implementation of a bar code system as a method of inputting data Using IT systems to input data can help reduce costs, such as when bar code systems at a selfcheckout line eliminate the human resource costs of using a checkout clerk Using IT systems to input data can help save time, such as when bar code systems at a checkout line can reduce the checkout time to a fraction of the time required to manually record the transaction This is because it eliminates the manual processes involved in writing data on a source document and later keying the data into the software system Using IT systems to input data can help reduce errors, such as when bar code systems eliminate the duplicate manual processes involved in writing data on a source document and later keying the data into the software system 166 Identify whether the following reports would be categorized as trading partner documents, internal documents, internal reports, or external reports: a daily cash receipts listing b accounts receivable aging c wire transfer of funds to a vendor d customer price list e general ledger f statement of cash flows g sales invoice h production schedule i customer address list j payroll journal Answer: a daily cash receipts listing – internal document b accounts receivable aging – internal report c wire transfer of funds to a vendor – trading partner document d customer price list – trading partner document e general ledger – internal report f statement of cash flows – external report g sales invoice – trading partner document h production schedule – internal document i customer address list – internal document j payroll journal – internal report To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 167 Which type of accounting information system reports would likely be prepared most frequently by financial accountants? By managerial accountants? Answer: Financial accounts are most likely to prepare external reports (such as financial statements and other reports provided to external users of the company’s accounting information); whereas managerial accountants are most likely to prepare internal reports (such as journals and other reports that provide feedback to managers about their areas of responsibility) 168 Identify which of the cardinal relationships apply, from the following: a component part — product b customer – product c employee ID badge – employee d employee – supervisor e vendor check Answer: a component part – product One to many b customer – product Many to many c employee ID badge – employee One to one d employee – supervisor One to many e vendor – check One to many 169 Differentiate distributed presentation computing and distributed applications computing Which of these forms of client server computing is most likely to be used by the sales clerks at a regional sales office for a large retail organization? Answer: Distributed presentation computing involves a client PC’s manipulation of a subset of data for purposes of presentation It uses spreadsheet, graphing software, mapping software, or other presentation software for this purpose Distributed applications computing involves the client PC’s participation in application processing, including the updating or changing of data that resides on the server Distributed applications computing is most likely to be used by sales clerks in a regional sales office to process the sales data from the various retail locations TEST BANK – CHAPTER – PROBLEMS: 170 Suppose that a large company is considering replacing a legacy system that is nearing obsolescence Describe any aspects of this decision that the company should consider Answer: When considering whether or not to replace a legacy system, a company should conduct a costbenefit analysis A business organization may decide to maintain a legacy system if it determines that the replacement costs would be too high In such cases, the organization would likely place strong emphasis on the advantages of its legacy system, including its degree of customization and the extent of historical data that it contains which would be difficult to integrate into a new system On the other hand, if the organization decided to replace its legacy system, it is likely that its reasons included such things as difficulty in supporting the older hardware, software, and programming language of its legacy system, difficulty in integrating the legacy system with newer business applications, and lack of user-friendly interfaces and supporting documentation from the legacy system To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com 171 Visit the campus bookstore at your university From what you see happening at the bookstore, try to draw a process map of how the processes at that store serve students, the customers Answer: Refer to the separate Microsoft Excel file “Chapter Solutions Pictorial Representations.xls 172 Look at Exhibit 2-3 and pick one accounting software product from the midmarket segment and one software product from the tier ERP segment Using those brand names of software, search the Internet for information about those products Based on your investigation, what are the differences between the two software products you chose? (Hint: To begin your search, you might try examining the following web sites www.accounting-software 411.com , www.findaccountingsoftware.com, and www.2020software.com) Answer: Student responses are likely to vary greatly, depending upon the software brands selected However, the modules within the midmarket products may not be fully integrated or may be less complex than the tier ERP systems 173 Using an Internet search engine, search for the term “RFID.” From the results you find, describe how RFID will be used as an input method Answer: RFID stands for radio-frequency identification RFID technology helps companies identify and manage large lots of goods, typically received and stored in cartons or on skids The cartons or skids include tags that are encoded with identifying information about the items, their supplier, and their purchase transaction RFID is used as an input method whereby the tags can be instantly read and recorded by using antennae or battery-operated transmitters and radio waves 174 Using an Internet search engine, search for the terms “client-server” and “scalable.” From the results you find, explain why client-server systems are scalable Answer: Scalable systems have the ability to handle growth or increased capabilities Thus, client-server systems are deemed to be scalable because of the manner in which tasks are divided Since client PCs normally accomplish local processing tasks, additional client PCs could be added to the network to handle new or growing subsets of data from the server ... the accounting information system 35 The system that captures, records, processes, and reports accounting information is referred to as a(n): A Accounting information system B Management information. .. http://downloadslide.blogspot.com TEST BANK – CHAPTER – END OF CHAPTER QUESTIONS: 125 Which of the following statements is not true? A Accounting information systems must maintain both detail and summary information. .. it true that the accounting software in and of itself is not the entire accounting information system? Answer: The accounting software is not the entire accounting information system; rather,