Accounting Information Systems 14th Edition Romney Test Bank

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Accounting Information Systems 14th Edition Romney Test Bank

1
Copyright © 2018 Pearson Education, Inc.
Accounting Information Systems, 14e (Romney/Steinbart)
Chapter 2 Overview of Transaction Processing and Enterprise Resource Planning
Systems
1 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) a business activity
B) automatic batch processing
C) an accounting department source document
D) 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
A) some type of paper document.
B) a computer data entry screen.
C) the company’s financial statements.
D) 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) A copy of the company’s financial statements.
B) A copy of the company’s shipping document.
C) A copy of the company’s sales journal.
D) A copy of the company’s ledger.
Answer: A
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
2
Copyright © 2018 Pearson Education, Inc.
4) Which step below is not considered to be part of the data processing cycle?
A) data input
B) feedback from external sources
C) data storage
D) 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
A) revenue cycle.
B) expenditure cycle.
C) financing cycle.
D) 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
A) revenue cycle.
B) expenditure cycle.
C) financing cycle.
D) 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
A) revenue cycle.
B) expenditure cycle.
C) financing cycle.
D) 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?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) 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?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) 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.
A) data input, data storage, data processing, information output
B) data input, data recall, data processing, information output
C) data input, data recall, data transmission, information output
D) 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?
A) purchase of inventory
B) receipt of cash
C) sale to customer
D) 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.
A) creating
B) reading
C) using
D) deleting
Answer: C
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
5
Copyright © 2018 Pearson Education, Inc.
15) What is the final step in the data processing cycle?
A) output
B) storage
C) processing
D) input
Answer: A
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
16) What is the first step in the data processing cycle?
A) output
B) storage
C) processing
D) input
Answer: D
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
17) The general ledger
A) summarizes the information on the trial balance.
B) is posted in total to the general journal.
C) only includes balance sheet accounts.
D) summarizes the transactions in journals.
Answer: D
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Reflective Thinking
18) For a retail business, a delivery of inventory, from a vendor (with whom there is an
established credit relationship) would be initially recorded in which type of accounting record as
part of which transaction cycle?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) cash disbursements journal; production cycle
Answer: A
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Reflective Thinking
6
Copyright © 2018 Pearson Education, Inc.
19) Data must be collected about three facets of each business activity. What are they?
A) the business activity, the resources it affects, the people who participate
B) the business activity, the transactions it creates, the impact on the financial statements
C) the inputs, outputs and processes used
D) who is involved, what was sold, how much was paid
Answer: A
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
20) Issuing a purchase order is part of which transaction cycle?
A) the revenue cycle
B) the expenditure cycle
C) the human resources cycle
D) the production cycle
Answer: B
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
21) The collection of employee time sheets is part of which transaction cycle?
A) the revenue cycle
B) the production cycle
C) the human resources cycle
D) the expenditure cycle
Answer: C
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
22) The collection of customer payment is part of which transaction cycle?
A) the revenue cycle
B) the production cycle
C) the human resources cycle
D) the expenditure cycle
Answer: A
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
7
Copyright © 2018 Pearson Education, Inc.
23) Common source documents for the revenue cycle include all of the following except
A) sales order.
B) receiving report.
C) delivery ticket.
D) credit memo.
Answer: B
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
24) Which of the following documents would be found in the expenditure cycle?
A) delivery ticket
B) time card
C) credit memo
D) purchase order
Answer: D
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
25) Documents that are sent to customers or suppliers and then sent back to the company in the
course of a business transaction are known as
A) turnaround documents.
B) source documents.
C) input documents.
D) transaction documents.
Answer: A
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
26) What is a turnaround document? Provide at least one example of a turnaround document.
Answer: Turnaround documents are company output sent to an external party, who often adds
data to the document, and then are returned to the company as an input document. Students
answer may vary based on the examples they provide.
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
8
Copyright © 2018 Pearson Education, Inc.
27) Which of the following is an example of source data automation?
A) a utility bill
B) POS (point-of-sale) scanners in retail stores
C) a bill of lading
D) a subsidiary ledger
Answer: B
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
28) Pre-numbering of shipping documents helps to verify that
A) documents have been used in order.
B) company policies were followed.
C) all transactions have been recorded.
D) source data automation was used to capture data.
Answer: C
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
29) Source documents generally help to improve accuracy in transaction processing because
A) they specify which information to collect.
B) logically related data can be grouped in the same area of the document.
C) they provide directions and steps for completing the form.
D) All of the above are correct.
Answer: D
Concept: Transaction processing
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
30) In transaction processing, generally which activity comes first?
A) recording data in a journal
B) posting items to special journals
C) capturing data on source documents
D) recording data in a general ledger
Answer: C
Concept: Transaction processing