Accounting Information Systems, 13e, Global Edition (Romney/Steinbart)
Chapter 2 Overview of Transaction Processing and Enterprise Resource Planning
Systems
2.1 Describe the four parts of the data processing cycle and the major activities in each.
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
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
3) 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
4) 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.
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Answer: A
5) 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
6) 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
7) 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
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9) 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
10) What is the most frequent revenue cycle transaction?
A) purchase of inventory
B) receipt of cash
C) sale to customer
D) billing
Answer: C
11) True or False: The existence of relevant data guarantees the data are useful.
Answer: FALSE
12) 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
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13) What is the final step in the data processing cycle?
A) output
B) storage
C) processing
D) input
Answer: A
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2.2 Describe documents and procedures used to collect and process transaction data.
1) The general ledger
A) is the initial place to record general expenses.
B) is posted in total to the general journal.
C) only includes balance sheet accounts.
D) summarizes the transactions in journals.
Answer: D
2) 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
3) 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
4) 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
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Answer: B
5) 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
6) 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
7) 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
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10) Pre-numbering of source 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
14) The data processing method used by FedEx to track packages is an example of
A) real-time processing.
B) batch processing.
C) online batch processing.
D) real-time batch processing.
Answer: A
17) Data processing includes all of the following except
A) verifying subsidiary ledger balances.
B) changing customer addresses.
C) removing inventory items no longer offered.
D) adding the name of a new vendor.
Answer: A
23) What is the first step in the data processing cycle?
A) input
B) output
C) storage
D) purchasing
Answer: A
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24) A purchase requisition is a common source document used to facilitate which business
activity?
A) customer sale
B) receipt of goods
C) inventory purchase
D) purchase request
Answer: D
19) Which of the following statements about a master file is false?
A) A master file is conceptually similar to a ledger in a manual AIS.
B) A master file's individual records are rarely, if ever, changed.
C) A master file exists across fiscal periods.
D) A master file stores cumulative information.
Answer: B
20) Which of the following is conceptually similar to a journal in a manual AIS?
A) database
B) master file
C) record
D) transaction file
Answer: D
9) All of the following are disadvantages of an ERP system except
A) an ERP provides an integrated view of the organization's data.
B) ERP software and hardware can cost midsized companies between $10 million and $20
million dollars.
C) ERPs frequently cause organizations to change their business processes to standardized ones.
D) ERPs are relatively complex.
Answer: A
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11) All of the following are reasons that implementing a new ERP may fail except
A) employees may resist using the ERP system.
B) ERPs can take years to fully implement.
C) employees may refuse to share sensitive information with different departments.
D) ERPs may require procedures and reports to be standardized across business units.
Answer: D
13) An ERP system might facilitate the purchase of direct materials by all of the following
except
A) selecting the best supplier by comparing bids.
B) preparing a purchase order when inventory falls to reorder point.
C) routing a purchase order to a purchasing agent for approval.
D) communicating a purchase order to a supplier.
Answer: A
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