Final Exam Flashcards Preview

Accounting Information Systems > Final Exam > Flashcards

Flashcards in Final Exam Deck (240)
Loading flashcards...
1
Q
1) Which activity below is not performed by Human Resources management (HRM)?
A) compensation 
B) training 
C) discharge 
D) recruitment and hiring
A

A) compensation

2
Q
2) Which department should have the sole ability to provide information to the AIS about hiring, terminations, and pay rate changes? 
A) payroll 
B) timekeeping 
C) production 
D) HRM
A

D) HRM

3
Q

3) Which of the following is generally not a major source of input to a payroll system?
A) payroll rate changes
B) time and attendance data
C) checks to insurance and benefits providers
D) withholdings and deduction requests from employees

A

C) checks to insurance and benefits providers

4
Q

4) Who does the payroll system issue checks to?
A) employees and to banks participating in direct deposit
B) a company payroll bank account
C) government agencies
D) All of the above are correct.

A

A) employees and to banks participating in direct deposit
B) a company payroll bank account
C) government agencies

5
Q
5) Experts estimate that, on average, the costs associated with replacing an employee are about \_\_\_\_\_\_\_\_ the employee's annual salary. 
A) one-quarter of
B) one-half of 
C) one and one-half times 
D) twice
A

C) one and one-half times

6
Q
6) For recording time spent on specific work projects, manufacturing companies usually use a 
A) job time ticket. 
B) time card. 
C) time clock. 
D) labor time card.
A

A) job time ticket.

7
Q

7) Which of the following statements is false regarding the use of incentives, commissions and bonuses in the payroll system?
A) Using incentives, commissions, and bonuses requires linking the payroll system and the information systems of sales and other cycles in order to collect the data used to calculate bonuses.
B) Bonus/incentive schemes must be properly designed with realistic, attainable goals that can be objectively measured.
C) Incentive schemes can result in undesirable behavior.
D) All of the above are true.

A

D) All of the above are true.

8
Q

8) Identify the item below that is not a desired result of an employee bonus systems.
A) Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus.
B) Employees may look for ways to improve service.
C) Employees may analyze their work environment and find ways to cut costs.
D) Employees may work harder and may be more motivated to exceed target goals to earn a bonus.

A

A) Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus.

9
Q
9) \_\_\_\_\_\_\_\_ are used to transmit time and attendance data directly to the payroll processing system.
A) Badge readers
B) Electronic time clocks
C) Magnetic cards
D) none of the above
A

B) Electronic time clocks

10
Q

10) Payroll deductions fall into the broad categories of ________ and ________.
A) payroll tax withholdings; voluntary deductions
B) unemployment; social security taxes
C) unemployment taxes; income taxes
D) voluntary deductions; income taxes

A

A) payroll tax withholdings; voluntary deductions

11
Q
11) Which of the following is not classified as a voluntary deduction? 
A) pension plan contributions 
B) social security withholdings 
C) insurance premiums 
D) deductions for a charity organization
A

B) social security withholdings

12
Q
12) Which type of payroll report contains information such as the employees' gross pay, payroll deductions, and net pay in a multicolumn format? 
A) payroll register 
B) deduction register 
C) employee earnings statement 
D) federal W-4 form
A

A) payroll register

13
Q
13) Which type of payroll report lists the voluntary deductions for each employee?
A) payroll register 
B) deduction register 	
C) earnings statement 
D) federal W-4 form
A

B) deduction register

14
Q
14) Which type of payroll report includes the details of the current paycheck and deductions as well as year-to-date totals?
A) payroll register 
B) deduction register 
C) earnings statement 
D) federal W-4 form
A

C) earnings statement

15
Q
15) An effective way an organization can eliminate paper paychecks while maintaining adequate accounting records is to 
A) pay in cash only. 
B) pay with money orders. 
C) use direct deposit. 	
D) use Electronic Funds Transfer.
A

C) use direct deposit.

16
Q
16) Companies that specialize in processing payroll are known as
A) paycheck distribution companies.
B) payroll service bureaus.
C) professional employer organizations.
D) semi-governmental organizations.
A

B) payroll service bureaus.

17
Q
17) Which organization provides payroll processing as well as other HRM services, like employee benefit design and administration?
A) title companies
B) payroll service bureau
C) professional employer organization
D) paycheck distribution companies
A

C) professional employer organization

18
Q
18) Which of the following is not a benefit of using a payroll service bureau or a professional employer organization?
A) freeing up of computer resources
B) increased internal control
C) reduced costs
D) wider range of benefits
A

B) increased internal control

19
Q
19) Many companies offer their employees a "cafeteria" approach to voluntary benefits in which employees can pick and choose the benefits they want. This plan is normally called a(n) 
A) elective plan. 
B) menu options benefit plan. 
C) flexible benefit plan. 
D) buffet plan.
A

C) flexible benefit plan.

20
Q
20) Pay rate information should be stored in 
A) employees' personnel files. 
B) employee subsidiary ledgers. 
C) the payroll master file. 
D) electronic time cards.
A

C) the payroll master file.

21
Q
21) The payroll transaction file should contain 
A) entries to add new hires. 
B) time card data. 
C) changes in tax rates. 
D) All of the above are correct.
A

B) time card data.

22
Q
22) The document that lists each employee's gross pay, payroll deductions, and net pay in a multicolumn format is called 
A) an employee earnings statement. 
B) the payroll register. 
C) a deduction register. 
D) an employee time sheet summary.
A

B) the payroll register.

23
Q

23) As each payroll transaction is processed, the system should also
A) allocate labor costs to appropriate general ledger accounts
B) use cumulative totals generated from a payroll to create a summary journal entry to be posted to the general ledger
C) both A and B above
D) The HRM system should not perform either activity A or B.

A

C) both A and B above

24
Q

24) Direct deposit of employee paychecks is one way an organization can improve efficiency and reduce payroll-processing costs. Which statement regarding direct deposit is false?
A) The cashier does not authorize the transfer of funds from the organization’s checking account to a payroll checking account.
B) The cashier does not have to sign employee paychecks.
C) Employees who are part of a direct deposit program receive a copy of their paycheck indicating the amount deposited.
D) Employees who are part of a direct deposit program receive an earnings statement on payday rather than a paper check.

A

A) The cashier does not authorize the transfer of funds from the organization’s checking account to a payroll checking account.

25
Q
25) The employer pays a portion of some payroll taxes and employee benefits. Both the employee and employer pay which benefit or tax listed below? 
A) social security taxes 
B) federal income taxes 
C) state income taxes	
D) none of the above
A

A) social security taxes

26
Q

26) Identify the following item that should contribute to the efficiency of a payroll system.
A) segregation of check distribution from payroll duties
B) prompt redeposit of unclaimed paychecks
C) a separate payroll bank account
D) direct deposit of checks

A

D) direct deposit of checks

27
Q
27) Which of the following documents would be likely to yield the greatest cost saving by converting from paper to electronic?
A) payroll register
B) earnings statement
C) deduction register
D) time card
A

D) time card

28
Q

34) A growing number of companies require some of their upper level executives to spend time performing job duties of rank-and-file employees. When the CEO of Loews Hotels assumed the role of bellman, he discovered
A) that the company’s polyester uniform caused him to sweat a great deal.
B) evidence of fraud in several hotel locations.
C) instances where company employees fell asleep on the job.
D) situations where employees were not treating customers properly.

A

A) that the company’s polyester uniform caused him to sweat a great deal.

29
Q

35) Executive immersion experiences are important because
A) CEOs often have no idea what rank-and-file employees do on a daily basis.
B) employees who have positive attitudes contribute to increasing company profits.
C) many employees feel upper management is out of touch.
D) it is important for organizations to take social responsibility seriously.

A

B) employees who have positive attitudes contribute to increasing company profits.

30
Q

37) Involving accountants in executive compensation plans is often especially helpful
A) in keeping track of the executive compensation plan.
B) in identifying the appropriate metrics to use when linking compensation to performance.
C) in reducing the total amount of compensation paid to executives.
D) in suggesting the appropriate amount of compensation executives should be paid.

A

B) in identifying the appropriate metrics to use when linking compensation to performance.

31
Q

38) Accountants can help executive compensation plan boards
A) comply with legal and regulatory requirements.
B) by identifying the best ways to keep the details of compensation plans out of the hands of external parties.
C) avoid paying excessive amounts of “perks” to executives.
D) distribute information regarding how well each executive is performing their job.

A

A) comply with legal and regulatory requirements.

32
Q

39) Form 941
A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter.
B) is used in preparing labor-related reports for government agencies.
C) is used for employee information and annual payroll reports.
D) is used to document compliance with applicable regulations.

A

A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter.

33
Q

40) A workforce inventory report
A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter.
B) is used in preparing labor-related reports for government agencies.
C) is used for employee information and annual payroll reports.
D) is used to document compliance with applicable regulations.

A

B) is used in preparing labor-related reports for government agencies.

34
Q
41) Professional employer organizations (PEOs) are especially attractive to small and mid-sized businesses for all of the following reasons except
A) reduced costs.
B) wider range of benefits.
C) freeing up computer resources.
D) improved service quality.
A

D) improved service quality.

35
Q

1) The sales department administrative assistant has been assigning phone order sales to her brother-in-law, a company sales person. Company policy is to pay commissions only on orders directly received by sales people, not on orders received over the phone. The resulting fraudulent commission payments might best have been prevented by requiring that
A) sales commission statements be supported by sales order forms signed by the customer and approved by the sales manager.
B) sales order forms be prenumbered and accounted for by the sales department manager.
C) sales orders and commission statements be approved by the accounting department.
D) disbursement vouchers for commission payments be reviewed by the internal audit department and compared to sales commission statements and sales orders.

A

A) sales commission statements be supported by sales order forms signed by the customer and approved by the sales manager.

36
Q

) Because many HRM / payroll master databases typically contain only descriptive information (such as which employees possess which skills), many firms have deployed ________ to more effectively leverage employees knowledge and skills.
A) relational databases
B) knowledge management systems
C) Resources, Events, and Agents (REA) databases
D) cardinality systems

A

B) knowledge management systems

37
Q
3) Identify the firm below where employees' knowledge is likely to be more valuable than the value of a company's tangible assets.
A) international airline
B) law firm
C) automobile manufacturer
D) railroad
A

B) law firm

38
Q

5) Knowledge management systems (KMS) permit organizations to
A) store employee solutions to specific problems in a shared database.
B) learn from individuals external to the organization.
C) perform background checks on potential employees.
D) gain competitive business intelligence on competitors.

A

A) store employee solutions to specific problems in a shared database.

39
Q

1) Why is a separate payroll account used to clear payroll checks?
A) for internal control purposes, to help limit any exposure to loss by the company
B) to make bank reconciliation easier
C) Banks don’t like to commingle payroll and expense checks.
D) All of the above are correct.

A

A) for internal control purposes, to help limit any exposure to loss by the company

40
Q

2) The following control can reduce the distribution of fraudulent paychecks.
A) Have internal audit investigate unclaimed paychecks.
B) Allow department managers to investigate unclaimed paychecks.
C) Immediately mark “void” across all unclaimed paychecks.
D) Match up all paychecks with time cards.

A

A) Have internal audit investigate unclaimed paychecks.

41
Q
3) When using electronic documents, \_\_\_\_\_\_\_\_ increase(s) the accuracy of data entry. 
A) access controls 
B) separation of duties 
C) general controls 	
D) application controls
A

D) application controls

42
Q

4) The most vital control in preventing unauthorized changes to the payroll master file is
A) hiring totally honest people to access and make changes to this file.
B) segregation of duties between the preparation of paychecks and their distribution.
C) segregation of duties between the authorization of changes and the physical handling of paychecks.
D) having the controller closely review and then approve any changes to the master file.

A

C) segregation of duties between the authorization of changes and the physical handling of paychecks.

43
Q

5) Which of the following is not a potential effect of inaccurate data on employee time cards?
A) increased labor expenses
B) erroneous labor expense reports
C) damaged employee morale
D) inaccurate calculation of overhead costs

A

D) inaccurate calculation of overhead costs

44
Q

6) Which control would be most appropriate to address the problem of inaccurate payroll processing?
A) encryption
B) direct deposit
C) cross-footing of the payroll register
D) an imprest payroll checking account

A

C) cross-footing of the payroll register

45
Q

7) The purpose of a general ledger payroll clearing account is
A) to check the accuracy and completeness of payroll recording and its allocation to cost centers.
B) to make the bank reconciliation easier.
C) to make sure that all employees are paid correctly each week.
D) to prevent the cashier from having complete control of the payroll cycle.

A

A) to check the accuracy and completeness of payroll recording and its allocation to cost centers.

46
Q

8) A “zero balance check” refers to which of the following control procedures?
A) a type of batch total
B) cross-footing the payroll register
C) the payroll clearing account shows a zero balance once all entries are posted
D) trial balance showing that debits equal credits

A

C) the payroll clearing account shows a zero balance once all entries are posted

47
Q

9) All of the following are controls that should be implemented in a payroll process, except
A) supervisors distribute paychecks since they should know all employees in their department.
B) someone independent of the payroll process should reconcile the payroll bank account.
C) sequential numbering of paychecks and accounting for the numbers.
D) restrict access to blank payroll checks and documents.

A

A) supervisors distribute paychecks since they should know all employees in their department.

48
Q

10) What is the best control to reduce the risk of losing payroll data?
A) passwords
B) physical security controls
C) backup and disaster recovery procedures
D) encryption

A

C) backup and disaster

49
Q
11) The threat of violation of employment laws relates directly to which activity?
A) payroll processing
B) collecting employee time data
C) hiring and recruiting 
D) all of the above
A

C) hiring and recruiting

50
Q

12) What is a potential threat to the specific activity of payroll processing?
A) hiring unqualified employees
B) poor system performance
C) violations of employment laws
D) unauthorized changes to the payroll master file

A

D) unauthorized changes to the payroll master file

51
Q

13) The results of an internal audit finds that there is a problem with inaccurate time data being entered into the payroll system. What is an applicable control that can help prevent this event from occurring in the future?
A) proper segregation of duties
B) automation of data collection
C) sound hiring procedures
D) review of appropriate performance metrics

A

B) automation of data collection

52
Q

14) Which of the following is a control that can be implemented to help prevent paychecks being issued to a “phantom” or “ghost” employee?
A) The cashier should sign all payroll checks.
B) Sequentially prenumber all payroll checks.
C) Use an imprest account to clear payroll checks.
D) Paychecks should be physically distributed by someone who does not authorize time data or record payroll.

A

D) Paychecks should be physically distributed by someone who does not authorize time data or record payroll.

53
Q
15) The average annual management salary at Iyov Management is $80,000. If the average turnover rate for employees is ten per year, what is the approximate average annual cost of turnover? 
A) $80,000
B) $400,000
C) $800,000
D) $1,200,000
A

D) $1,200,000

54
Q

16) Which of the following will limit a firm’s potential loss exposure from paycheck forgery?
A) segregation of check distribution from payroll duties
B) prompt redeposit of unclaimed paychecks
C) a separate payroll bank account
D) direct deposit of checks

A

C) a separate payroll bank account

55
Q
17) Which of the following is a control that addresses the threat of unauthorized changes to the payroll master file?
A) field checks	
B) batch totals
C) segregation of duties
D) sound hiring procedures
A

C) segregation of duties

56
Q

25) Using financial incentives requires organizations to
A) pay employees less than they would have to if pay was a fixed salary.
B) better monitor employee attendance.
C) link the payroll system to other cycles to calculate incentive payments.
D) better monitor employee effort.

A

C) link the payroll system to other cycles to calculate incentive payments.

57
Q
26) Source data automation is often effective in reducing
A) unintentional errors.
B) intentional errors.
C) accuracy.
D) theft.
A

C) accuracy.

58
Q

27) A payroll clearing account is used to
A) check the accuracy of payroll costs.
B) speed up payroll transaction processing.
C) reduce the transaction costs associated with payroll transaction processing.
D) eliminate the need to manually record payroll transactions.

A

A) check the accuracy of payroll costs.

59
Q

28) All of the following regarding payroll checks is correct except
A) access to payroll checks should be restricted.
B) payroll checks should be sequentially pre-numbered.
C) payroll checks should be drawn on the organization’s regular bank account(s).
D) the cashier should sign payroll checks.

A

C) payroll checks should be drawn on the organization’s regular bank account(s).

60
Q
29) Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the \_\_\_\_\_\_\_\_ should distribute paychecks.
A) accounts payable department
B) cashier
C) internal audit department
D) external auditor
A

B) cashier

61
Q
30) Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the \_\_\_\_\_\_\_\_ should record payroll.
A) accounts payable department
B) cashier
C) internal audit department
D) external auditor
A

A) accounts payable department

62
Q
31) Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the \_\_\_\_\_\_\_\_ should periodically observe the paycheck distribution process.
A) accounts payable department
B) cashier	
C) internal audit department
D) external auditor
A

C) internal audit department

63
Q

1) The general ledger and reporting system consists of the ________ involved in ________ the general ledger and ________ reports.
A) business transactions; updating; processing
B) data processing; business transactions for; printing
C) information processing; updating; creating
D) business transactions; data processing; preparing

A

C) information processing; updating; creating

64
Q

2) Which item below is not considered a major input to the general ledger and reporting system?
A) summary entries from the major subsystems
B) reports from managers
C) adjusting entries
D) financing and investing activities

A

B) reports from managers

65
Q
3) Who should provide the adjusting entries in a well-designed general ledger and reporting system? 
A) various user departments 
B) the treasurer's area 
C) the other major AIS subsystems 
D) the controller's area
A

D) the controller’s area

66
Q

4) Which of the following user groups generally receive information produced by the general ledger and reporting system?
A) internal users
B) external users
C) inquiry processing by internal or external users
D) all of the above

A

D) all of the above

67
Q

5) The general ledger system of an organization should be designed to serve the information requirements of both internal and external users. This means that the system should support
A) producing expansive regular periodic reports to cover all information needs.
B) the real-time inquiry needs of all users.
C) producing regular periodic reports and respond to real-time inquiry needs.
D) access by investors and creditors of the organization to general ledger balances.

A

C) producing regular periodic reports and respond to real-time inquiry needs.

68
Q

6) Identify the most correct statement with regard to how the various accounting subsystems update the general ledger.
A) Individual journal entries for each accounting subsystem transaction update the general ledger every 24 hours.
B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger.
C) The controller or treasurer must approve accounting subsystem journal entries before any updating may occur.
D) Nonroutine transactions are entered into the system by the treasurer’s office.

A

B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger.

69
Q

7) When updating the general ledger, sales, purchases, and production are examples of ________ entries, and issuance or retirement of debt and the purchase or sale of investment securities are examples of ________ entries.
A) adjusting; controller originated
B) accounting subsystem; treasurer originated
C) adjusting; special journal
D) controller generated; special journal

A

B) accounting subsystem; treasurer originated

70
Q
8) Which of the following are used to document entries made to update the general ledger?
A) general journal 
B) subsidiary journal 
C) subsidiary ledgers 
D) journal vouchers
A

D) journal vouchers

71
Q
9) Not all journal entries affect cash flow. Adjusting entries that reflect events that have already occurred, but have no effect on cash, are classified as 
A) accruals. 
B) deferrals. 
C) revaluations. 
D) corrections.
A

A) accruals.

72
Q
10) Recording interest earned on an investment is an example of which type of adjusting journal entry? 
A) accrual entry 
B) deferral entry 
C) revaluation entry 
D) correcting entry
A

A) accrual entry

73
Q
11) Identify the adjusting entry that is made at the end of an accounting period to reflect an exchange of cash prior to the performance of a related event is classified as a(n)
A) accrual entry. 
B) deferral entry. 
C) revaluation entry. 	
D) correcting entry.
A

B) deferral entry.

74
Q
12) Depreciation expense and bad debt expense are examples of which type of adjusting journal entry? 
A) deferrals 
B) accruals 	
C) revaluations 
D) estimates
A

D) estimates

75
Q
13) Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called 
A) reconciliations. 
B) revaluations. 
C) estimates.
D) accruals.
A

B) revaluations.

76
Q
14) Adjusting entries that are made to counteract the effects of errors found in the general ledger are called 
A) accruals. 
B) corrections. 
C) deferrals. 
D) estimates.
A

B) corrections.

77
Q
15) Corrections are entries made to correct errors found in
A) all journals.
B) special journals.
C) the general ledger.
D) the financial statements.
A

C) the general ledger.

78
Q
16) Immediately after the adjusting entries are posted, the next step in the general ledger and reporting system is to prepare 
A) an adjusted trial balance. 
B) closing entries. 
C) financial statements. 
D) an unadjusted trial balance.
A

A) an adjusted trial balance.

79
Q
17) Financial statements are prepared in a certain sequence. Which statement is prepared last?
A) the adjusted trial balance 
B) the income statement 
C) the balance sheet 	
D) the statement of cash flows
A

D) the statement of cash flows

80
Q
18) A listing of journal vouchers by numerical sequence, account number, or date is an example of 
A) a general ledger control report. 
B) a budget report. 
C) a batch to be processed. 
D) responsibility accounting.
A

A) a general ledger control report.

81
Q
19) Who generally is responsible for providing the accounting department with information about financing and investing activities to create the appropriate general ledger journal entries?
A) budget department
B) controller
C) treasurer
D) chief executive officer
A

C) treasurer

82
Q
20) Adjusting entries that are made to recognize revenue that has been received but not yet earned are classified as
A) estimates.
B) deferrals.
C) accruals.
D) revaluations.
A

B) deferrals.

83
Q
21) Adjusting entries that reflect a change in accounting principle used to value inventories are classified as
A) corrections.
B) estimates.
C) deferrals.
D) revaluations.
A

D) revaluations.

84
Q

1) If you believe not all adjusting entries were posted in the general ledger, you should prepare a general ledger control report listing journal vouchers in
A) numerical sequence.
B) chronological order.
C) general ledger account number order.
D) any order, since you have to review them all anyway.

A

A) numerical sequence.

85
Q

2) If you believe a general ledger account was not adjusted properly or at all, you should prepare a general ledger control report listing journal vouchers in
A) numerical sequence.
B) chronological order.
C) general ledger account number order.
D) any order, since you have to review them all anyway.

A

C) general ledger account number order.

86
Q

3) Which of the following are appropriate controls for the general ledger and reporting system?
A) using well-designed documents and records
B) online data entry with the use of appropriate edit checks
C) prenumbering documents and accounting for the sequence numbers
D) All of the above are appropriate.

A

D) All of the above are appropriate.

87
Q
4) A type of data entry control that would ensure that adjusting entries are posted to existing general ledger accounts is called a(n) \_\_\_\_\_\_\_\_ check. 
A) validity 	
B) existence 
C) closed loop verification
D) reasonableness
A

A) validity

88
Q

5) One way of ensuring that recurring adjusting journal entries are made each month would be to
A) make all the entries a month in advance.
B) rotate the responsibility among the accounting staff.
C) program the entries to be made automatically.
D) create a standard adjusting journal entry file.

A

D) create a standard adjusting journal entry file.

89
Q

6) Which of the following tasks are facilitated by maintaining a strong and secure audit trail?
A) tracing a transaction from original source document to the general ledger to a report
B) tracing an item in a report back through the general ledger to the original source document
C) tracing changes in general ledger accounts from beginning to ending balances
D) All of the above are facilitated by the audit trail.

A

D) All of the above are facilitated by the audit trail.

90
Q
7) Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The account number referenced in your journal entry does not exist. Create a new account?" This is an example of a 
A) validity check.
B) closed loop verification.
C) zero-balance check.	
D) completeness test.
A

A) validity check.

91
Q
8) Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "Your journal entry must be a numeric value. Please reenter." This is an example of a 
A) validity check.
B) field check.
C) zero-balance check.
D) completeness test.
A

B) field check.

92
Q
9) Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The amounts debited and credited are not equal. Please correct and try again." This is an example of a 
A) validity check.
B) field check.
C) zero-balance check.
D) completeness test.
A

C) zero-balance check.

93
Q
10) Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The data you have entered does not include a source reference code. Please enter this data before saving." This is an example of a
A) validity check.
B) field check.	
C) zero-balance check.
D) completeness test.
A

D) completeness test.

94
Q

13) Identify one way “rainbow tables” are often used.
A) to discover plaintext passwords associated with a hash
B) to integrate different tables into one, master table
C) to perform a zero-balance check
D) to ensure referential integrity of all the associated tables

A

A) to discover plaintext passwords associated with a hash

95
Q

14) What system privileges should an employee involved in the general ledger and reporting system be given?
A) general privileges to create, delete, update, or modify data
B) no privileges permitting the creation, deletion, updating, or modification of data
C) only the specific privileges necessary to perform an employee’s assigned duties
D) read-only privileges

A

C) only the specific privileges necessary to perform an employee’s assigned duties

96
Q
15) What control procedure(s) should be used to reduce the risk of unauthorized disclosure of the financial statements?
A) multifactor authentication
B) physical security
C) encryption
D) all of the above
A

D) all of the above

97
Q
16) What control procedure(s) should be used to reduce the risk of the destruction of financial statement master data?
A) multifactor authentication
B) backup and disaster recovery
C) encryption
D) all of the above
A

B) backup and disaster recovery

98
Q

1) Which of the following statements is not true regarding XBRL?
A) XBRL is a variant of XML.
B) XBRL is specifically designed for use in communicating the content of financial data.
C) XBRL creates unique tags for each data item.
D) XBRL’s adoption will require accountants and systems professionals tag data for their clients.

A

D) XBRL’s adoption will require accountants and systems professionals tag data for their clients.

99
Q

2) The benefits of XBRL include
A) organizations can publish financial information only once, using standard XBRL tags.
B) tagged data is readable and interpretable by computers, so users don’t need re-enter data into order to work with it.
C) Both are benefits of XBRL.
D) Neither is a benefit of XBRL.

A

C) Both are benefits of XBRL.

100
Q
3) Communications technology and the Internet can be used to reduce the time and costs involved in disseminating financial statement information. Users of such financial information still struggle in that many recipients have different information delivery requirements and may have to manually reenter the information into their own decision analysis tools. The ideal solution to solve these problems and efficiently transmit financial information via the Internet is to use 
A) HTML code. 	
B) XML. 
C) pdf file. 
D) XBRL.
A

D) XBRL.

101
Q

4) Which of the following statements is not true about an XBRL instance document?
A) An instance document includes instruction code as to how the document should be physically arranged and displayed.
B) An instance document contains facts about specific financial statement line items.
C) An instance document uses separate tags for each specific element.
D) An instance document can be used to tag financial and nonfinancial elements.

A

A) An instance document includes instruction code as to how the document should be physically arranged and displayed.

102
Q

5) IFRS is an acronym for what?
A) International Financial Reporting Standards
B) Internal Forensic Response System
C) Input and Financial Reporting Standards
D) Internal Fault Recovery System

A

A) International Financial Reporting Standards

103
Q

6) Which of the following is true about IFRS?
A) There is a global trend towards using IFRS for reporting purposes, though U.S. companies are not currently required to do so.
B) The switch to IFRS is required by the Sarbanes-Oxley Act.
C) IFRS is only slightly different than U.S. GAAP.
D) The switch to IFRS is cosmetic only—there isn’t any real impact on AIS.

A

A) There is a global trend towards using IFRS for reporting purposes, though U.S. companies are not currently required to do so.

104
Q

) Which of the following scenarios will not be allowed under IFRS?
A) A landscaping and garden retail store keeps piles of river rock, gravel, paving stones, and small decorative rocks in a fenced area on the side of the store. The store uses the most recent inventory costs when calculating cost of goods sold, since new inventory is piled on top of the older inventory.
B) A grocery store strictly enforces a shelf rotation policy, so that older inventory is always at the front and sold first. The store uses the oldest inventory costs to calculate cost of goods sold.
C) A farm chemical supplier maintains a large holding tank of chemicals, into which deliveries are periodically combined with the older chemicals. The supplier averages the cost of all inventory to calculate cost of goods sold.
D) All of the above are acceptable under IFRS.

A

A) A landscaping and garden retail store keeps piles of river rock, gravel, paving stones, and small decorative rocks in a fenced area on the side of the store. The store uses the most recent inventory costs when calculating cost of goods sold, since new inventory is piled on top of the older inventory.

105
Q

8) Which of the following is true about accounting for fixed assets?
A) Depreciation expense under IFRS will likely be higher than under GAAP, because acquisitions of assets with multiple components must be separately depreciated under IFRS, whereas under GAAP assets could be bundled and depreciated over the longest of the useful life for any of the components.
B) IFRS doesn’t allow capitalization of any asset that separately accounts for less than 20% of total assets.
C) Depreciation expense under IFRS will likely be less than under GAAP, because standards for depreciable lives on asset classes are much longer than under GAAP.
D) IFRS and GAAP account for fixed assets in much the same way.

A

A) Depreciation expense under IFRS will likely be higher than under GAAP, because acquisitions of assets with multiple components must be separately depreciated under IFRS, whereas under GAAP assets could be bundled and depreciated over the longest of the useful life for any of the components.

106
Q

10) Identify the year the SEC will require American companies to switch from U.S.-based GAAP to IFRS as the basis for preparing financial statements.
A) 2016
B) 2018
C) 2020
D) At this point it is unclear when the SEC will require American companies to implement IFRS, though the SEC remains committed to requiring U.S. companies use IFRS at some point.

A

A) 2016

107
Q
11) A major way in which IFRS differs from GAAP that will affect the design of a company's general ledger and reporting system is an IFRS principle known as 
A) componentization.
B) monetization.	
C) securitization.
D) none of the above
A

A) componentization.

108
Q

12) At a minimum, a switch to IFRS from GAAP will affect companies’ accounting information system by
A) requiring companies to increase the processing power of their existing accounting information systems.
B) requiring IT departments to hire programmers that are fluent in languages besides English.
C) requiring the creation of additional fields in research and development (R&D) records to capture information about the stage of research and development that costs are incurred in.
D) requiring firms to completely redesign their existing accounting information systems because current systems are not compatible with IFRS accounting principles.

A

C) requiring the creation of additional fields in research and development (R&D) records to capture information about the stage of research and development that costs are incurred in.

109
Q
13) XBRL stands for 
A) extensible business reporting language.
B) extreme business reporting ledgers.
C) external business reporting language.
D) extensive business report logic.
A

C) external business reporting language.

110
Q
15) Each specific data item in an XBRL document is called a(n)
A) taxonomy.
B) element.
C) instance.	
D) schema.
A

B) element.

111
Q
1) The \_\_\_\_\_\_\_\_ is the managerial report that shows planned cash inflows and outflows for major investments or acquisitions. 
A) journal voucher list	
B) statement of cash flows
C) operating budget
D) capital expenditures budget
A

D) capital expenditures budget

112
Q

2) The operating budget
A) compares estimated cash flows from operations with planned expenditures.
B) shows cash inflows and outflows for each capital project.
C) depicts planned revenues and expenditures for each organizational unit.
D) is used to plan for the purchase and retirement of property, plant, and equipment.

A

C) depicts planned revenues and expenditures for each organizational unit.

113
Q

3) Budgets used for internal planning purposes and performance evaluation should be developed on the basis of
A) responsibility accounting.
B) generally accepted accounting principles.
C) financial accounting standards.
D) managerial accounting standards.

A

A) responsibility accounting.

114
Q
4) Performance reports for cost centers should compare actual versus budget \_\_\_\_\_\_\_\_ costs. 
A) controllable 
B) uncontrollable 	
C) fixed 
D) variable
A

A) controllable

115
Q
5) Performance reports for sales departments should compare actual revenue versus budgeted
A) revenue.	
B) cost.
C) return on investment.
D) profit.
A

A) revenue.

116
Q
6) Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as \_\_\_\_\_\_\_\_ centers. 
A) cost 	
B) profit 
C) investment 
D) revenue
A

B) profit

117
Q
7) As responsibility reports are rolled up into reports for higher level executives, they
A) become less detailed.	
B) become more detailed.
C) become narrower in scope.
D) look about the same.
A

A) become less detailed.

118
Q
8) Variances for variable costs will be misleading when the planned output differs from budgeted output. A solution to this problem would be 
A) calling all costs fixed. 
B) to use flexible budgeting. 	
C) better prediction of output. 
D) to eliminate the budgeting process.
A

B) to use flexible budgeting.

119
Q
9) Which of the following balanced scorecard dimensions provides measures on how efficiently and effectively the organization is performing key business processes? 
A) financial 	
B) internal operations 
C) innovation and learning 
D) customer
A

B) internal operations

120
Q

10) Which of the following is not one of the principles of proper graph design for bar charts?
A) Include data values with each element.
B) Use 3-D rather than 2-D bars to make reading easier.
C) Use colors or shades instead of patterns to represent different variables.
D) Use titles that summarize the basic message.

A

B) Use 3-D rather than 2-D bars to make reading easier.

121
Q

15) The balanced scorecard attempts to solve what major issue associated with traditional accounting reports?
A) Traditional accounting reports focus too narrowly on financial performance.
B) Traditional accounting reports are not easily understood by non-accountants.
C) Traditional accounting reports are expensive to produce.
D) Traditional accounting reports are produced too slowly to provide value.

A

A) Traditional accounting reports focus too narrowly on financial performance.

122
Q

16) Which of the following is not a perspective reflected in the balanced scorecard?
A) customer perspective
B) internal operations perspective
C) financial perspective
D) efficiency and effectiveness perspective

A

D) efficiency and effectiveness perspective

123
Q
18) Which type of graph is the most commonly used to display trends in financial data?
A) pie chart
B) scatterplot chart
C) bar chart	
D) stochastic chart
A

C) bar chart

124
Q
19) Which of the following balanced scorecard dimensions provides measures on new products?
A) financial 	
B) internal operations 
C) innovation and learning 
D) customer
A

C) innovation and learning

125
Q

1) Which of the following statements about REA modeling and REA diagrams is false?
A) REA is an acronym for Resources, Entities, and Agents.
B) REA data modeling does not include traditional accounting elements such as ledgers, chart of accounts, debits and credits.
C) REA data modeling could be referred to as an events-based model.
D) REA diagrams must include at least two activities, which together represent a give-get economic exchange.

A

A) REA is an acronym for Resources, Entities, and Agents.

126
Q

2) The REA data model approach facilitates efficient operations by all the following except
A) standardizing source document format.
B) identifying non-value added activities.
C) storing financial and nonfinancial data in the same database.
D) organizing data to simplify data retrieval and analysis.

A

A) standardizing source document format.

127
Q
3) The process of defining a database so that it faithfully represents all aspects of the organization including its interactions with the external environment is called 
A) data modeling. 
B) data designing. 
C) data development. 	
D) data definition.
A

A) data modeling.

128
Q

4) In which stage(s) of the database design process does data modeling occur?
A) only in the systems analysis stage
B) only in the design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages

A

C) in both the systems analysis and design stages

129
Q
5) A(n) \_\_\_\_\_\_\_\_ diagram graphically depicts a database's contents by showing entities and relationships. 
A) data flow 
B) flowchart 	
C) entity-relationship
D) REA
A

C) entity-relationship

130
Q
6) In creating an entity-relationship diagram, \_\_\_\_\_\_\_\_ is anything about which an organization wants to collect and store information. 
A) a data model
B) an entity	
C) a schema 
D) a tuple
A

B) an entity

131
Q
7) An entity-relationship diagram represents entities as \_\_\_\_\_\_\_\_ and the relationships between them as lines and \_\_\_\_\_\_\_\_. 
A) circles; squares	
B) squares; diamonds 
C) rectangles; diamonds 
D) rectangles; circles
A

C) rectangles; diamonds

132
Q

8) An entity-relationship diagram
A) can represent the contents of any database.
B) is only used in conjunction with REA models.
C) can show a limited number of entities and relationships.
D) is used only to design new databases.

A

A) can represent the contents of any database.

133
Q
9) Data modeling is an element of
A) systems analysis.
B) conceptual design.
C) both A and B	
D) neither A nor B
A

C) both A and B

134
Q

12) In which stage(s) of the database design process is the completed data model used?
A) only in the systems analysis stage
B) only in the conceptual design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages

A

D) neither the systems analysis nor the design stages

135
Q

13) In which stage(s) of the database design process should accountants participate?
A) the systems analysis stage
B) the conceptual design stage
C) the implementation and conversion stage
D) in all of the stages above

A

D) in all of the stages above

136
Q
14) With regards to the database design process, accountants may provide the greatest value to their organization by participating in 
A) implementation and conversion.
B) data modeling.
C) database operation and maintenance.
D) system auditing.
A

B) data modeling.

137
Q
17) It is industry standard to model relationships as \_\_\_\_\_\_\_\_ in entity-relationship diagrams.
A) rectangles
B) ovals
C) diamonds
D) there is no industry standard
A

D) there is no industry standard

138
Q
18) It is industry standard to model attributes as \_\_\_\_\_\_\_\_ in entity-relationship diagrams.
A) rectangles
B) ovals	
C) diamonds
D) There is no industry standard.
A

D) There is no industry standard.

139
Q

1) The REA data model
A) is used in many areas of business and science.
B) was developed specifically for use in designing accounting information systems.
C) classifies data into relationships, entities and accounts.
D) all of the above

A

B) was developed specifically for use in designing accounting information systems.

140
Q

2) Which of the following is not one of the rules in creating an REA data model?
A) Each event is linked to at least one resource that it affects.
B) Each event is linked to at least one other event.
C) Each event is linked to at least two participating agents.
D) All of the above are important rules.

A

D) All of the above are important rules.

141
Q

3) Which is a true statement about the REA data model?
A) The REA data model classifies entities into three distinct categories.
B) The term REA is an acronym that stands for resources, entities, and agents.
C) Using an REA data model is not helpful when creating an R-E diagram.
D) The “E” in the REA data model stands for things that have an economic value to the organization.

A

A) The REA data model classifies entities into three distinct categories.

142
Q
4) Relationships that affect the quantity of a resource are sometimes referred to as \_\_\_\_\_\_\_\_ relationships.
A) commitment
B) exchange
C) stockflow	
D) duality
A

C) stockflow

143
Q

5) The “give” event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization’s stock of an economic resource.
C) reduces the organization’s stock of a resource that has economic value.
D) none of the above

A

C) reduces the organization’s stock of a resource that has economic value.

144
Q

6) The “get” event represents an activity which
A) includes a promise to engage in future economic exchanges.
B) increases the organization’s stock of an economic resource.
C) reduces the organization’s stock of a resource that has economic value.
D) none of the above

A

B) increases the organization’s stock of an economic resource.

145
Q
8) REA models are usually depicted in which diagramming form?
A) entity-relationship diagrams
B) decision tree diagrams
C) if-then diagrams	
D) stock-flow diagrams
A

A) entity-relationship diagrams

146
Q
9) Identify the item below that would be classified as a resource by the REA data model.
A) an IOU from a customer
B) the CFO	
C) a customer sale
D) none of the above
A

A) an IOU from a customer

147
Q
10) Identify the item below that would be classified as an event by the REA data model.
A) an IOU from a customer
B) the CFO	
C) a customer sale
D) none of the above
A

C) a customer sale

148
Q
11) Identify the item below that would be classified as an agent by the REA data model.
A) an IOU from a customer
B) the CFO	
C) a customer sale
D) none of the above
A

B) the CFO

149
Q
12) What is the minimum number of agents that must participate in each REA event?
A) 0	
B) 2
C) 1
D) 3
A

C) 1

150
Q
13) What is the minimum number of external agents that must participate in each REA event?
A) 0
B) 2	
C) 1
D) 3
A

A) 0

151
Q
14) Assume that you are looking at a REA diagram that depicts only one event. Which of the following must be on the REA diagram?
A) an external agent
B) an internal agent	
C) both A and B
D) neither A nor B
A

B) an internal agent

152
Q
15) Identify the notation often used to represent cardinality information.
A) dotted lines
B) Greek characters
C) crow's feet	
D) color coding
A

C) crow’s feet

153
Q
16) Identify the notation below that is not used to represent cardinality information.
A) UML	
B) (Min, Max)
C) DFD
D) Maximums only
A

C) DFD

154
Q
17) Every citizen in the United States has one social security number, but no two citizens have the same social security number. Thus, the cardinality that exists between social security numbers and citizens is
A) one-to-one.	
B) one-to-many.
C) many-to-many.
D) none of the above
A

A) one-to-one.

155
Q
18) Every person in the world has a birthdate, but no person has more than one birthdate. Thus, the cardinality that exists between birthdate and people is 
A) one-to-one.
B) one-to-many.	
C) many-to-many.
D) none of the above
A

B) one-to-many.

156
Q
19) Every person in the world can have more than one friend, and each person in the world can be a friend to more than one person. Thus, the cardinality that exists between friends and people is 
A) one-to-one.	
B) one-to-many.
C) many-to-many.
D) none of the above
A

C) many-to-many.

157
Q
1) What is the standard cardinality pattern for a relationship between an event and an agent?
A) 1:1
B) 0:1
C) 0:N
D) 1:N
A

D) 1:N

158
Q
2) An REA diagram must link every event to at least one \_\_\_\_\_\_\_\_ and two \_\_\_\_\_\_\_\_. 
A) resource; agents 
B) agent; resources 
C) transaction; entities 
D) resource; relationships
A

A) resource; agents

159
Q
3) Each event in an REA model will in most cases have at least one \_\_\_\_\_\_\_\_ agent and one \_\_\_\_\_\_\_\_ agent involved with the event. 
A) internal; resource 
B) external; entity 	
C) internal; employee 
D) internal; external
A

D) internal; external

160
Q

4) Which of the following statements is true about the development of an REA model?
A) Events that pertain to the entry of data are included in the REA model.
B) The objective is to model basic value-chain activities.
C) REA diagrams model individual transactions and data collections.
D) Information retrieval events are modeled as events in the REA model.

A

B) The objective is to model basic value-chain activities.

161
Q
5) The first step in developing an REA diagram for a specific transaction cycle begins with identifying
A) relevant events.
B) agents involved.
C) resources affected.
D) relationship cardinalities.
A

A) relevant events.

162
Q

6) Identify the statement below that is false with respect to cardinalities.
A) Cardinalities describe the nature of the relationship between two entities.
B) No universal standard exists for representing information about cardinalities in REA diagrams.
C) The minimum cardinality can be zero or one.
D) The maximum cardinality can be zero, one, or many.

A

D) The maximum cardinality can be zero, one, or many.

163
Q
7) Identify the minimum cardinality of any REA diagram relationship.
A) 0 or 1
B) 0 or N	
C) 1 or N
D) none of the above
A

A) 0 or 1

164
Q
8) The maximum cardinality of any REA diagram relationship is
A) zero or one. 
B) one or many. 
C) zero or many. 	
D) none of the above
A

B) one or many.

165
Q
9) How many types of relationships are possible between entities? 
A) one 	
B) two 
C) three 
D) an infinite number
A

C) three

166
Q
10) Identify the most likely relationship where cardinalities have zero minimums and N maximums.
A) agent-event relationship
B) resource-event relationship
C) event-event relationship	
D) All of the above are equally likely.
A

C) event-event relationship

167
Q

11) Which of the following statements is false regarding REA diagrams?
A) Each organization will have its own unique REA diagram.
B) An REA diagram for a given organization will change over time.
C) Data modeling and REA diagram development involve complex and repetitive processes.
D) Redrawing an REA diagram several times during development is uncommon.

A

D) Redrawing an REA diagram several times during development is uncommon.

168
Q

1) Integrating separate REA diagrams developed for individual transaction cycles into a single, comprehensive enterprise-wide data model
A) is possible.
B) requires understanding what the cardinalities in each separate diagram reveal about the organization’s business policies and activities.
C) provides a single comprehensive enterprise-wide model of the organization.
D) All of the above are true.

A

D) All of the above are true.

169
Q

2) An integrated REA diagram merges multiple copies of ________ and ________ entities but retains multiple copies of ________ entities.
A) resource; event; agent
B) event; agent; resource
C) resource; agent; event
D) None of the above. An integrated REA diagram merges multiple copies of all entities.

A

A) resource; event; agent

170
Q
3) An integrated REA diagram could contain multiple copies of 
A) customers.	
B) sales.
C) inventory.
D) sales-inventory.
A

A) customers.

171
Q

4) An integrated REA diagram merges multiple copies of some entities in order to
A) minimize the repetition of agent entities.
B) maximize the legibility of the diagram by avoiding the need to have relationship lines cross one another.
C) Both A and B are true.
D) Both A and B are false.

A

B) maximize the legibility of the diagram by avoiding the need to have relationship lines cross one another.

172
Q

5) Combining REA diagrams for individual transaction cycles into a single, enterprise-wide model adds two more rules to the three basic principles for drawing REA diagrams. Which of the following is not one of those two new rules?
A) Every resource must be linked to at least one event that increments that resource and to at least one event that decrements that resource.
B) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the minimum cardinality between that event and every other event with which it may be associated must be 0.
C) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the maximum cardinality between that event and every other event with which it may be associated must be 0.
D) All of the above are new rules for drawing integrated REA diagrams.

A

C) If a specific event can be linked to more than one other type of event, but cannot be linked simultaneously to all of those other events, then the maximum cardinality between that event and every other event with which it may be associated must be 0.

173
Q

6) Which of the following statements is not true with regards to a correctly drawn enterprise-wide REA diagram?
A) Every event must be linked to at least one resource.
B) Merging two transaction cycles on a common event may affect the minimum cardinalities between the merged event and the other events.
C) Events can only be merged if they share the same resources and events.
D) Creating a set of tables from an REA diagram automatically results in a well-structured relational database.

A

C) Events can only be merged if they share the same resources and events.

174
Q

7) Which of the below statements is false with respect to REA diagrams for individual transaction cycles?
A) They depict basic give-to-get economic duality relationships.
B) They usually provide only a partial view of resources.
C) They need to be combined in order to provide a comprehensive enterprise-wide data model.
D) They show both how resources are acquired and how they are used.

A

D) They show both how resources are acquired and how they are used.

175
Q

8) Which of the statements below is false with respect to enterprise-wide REA diagrams?
A) Merging two or more REA diagrams that contain the same resource entity does not require any changes to the cardinality pairs in the individual diagrams.
B) Merging two or more diagrams that contain a common event entity, however, often requires changing the minimum cardinalities associated with the other events to 0, to reflect the fact that the merged event may be connected to any one of several different events, but not to all of them simultaneously.
C) The minimum cardinalities associated with agents may also have to be changed to 0.
D) All of the above are true.

A

D) All of the above are true.

176
Q
9) When combining two REA diagrams by merging common entities, changes in the cardinality of the merged entity is needed when it is a(n) 
A) agent.
B) event.
C) relationship.
D) resource.
A

B) event.

177
Q
10) Integrating separate REA diagrams into a single comprehensive enterprise-wide model of the organization requires understanding what the \_\_\_\_\_\_\_\_ in each separate diagram reveal about the organization's business policies and activities.
A) cardinalities	
B) data
C) events
D) transactions
A

A) cardinalities

178
Q

11) When integrating separate REA diagrams,
A) common resources are placed between the events that affect them.
B) each resource is connected to two agents.
C) resources are duplicated to show the give and get of economic duality relationships.
D) resources are merged if both events in the stockflow relationship are modeled.

A

A) common resources are placed between the events that affect them.

179
Q
12) Which entity is most likely to be part of both the revenue cycle and the expenditure cycle?
A) Receive Goods	
B) Customer
C) Receive Cash
D) Inventory
A

D) Inventory

180
Q
13) Which entity is most likely to be part of both the payroll cycle and the expenditure cycle?
A) Receive Goods
B) Customer	
C) Disburse Cash
D) Inventory
A

C) Disburse Cash

181
Q
14) Which entity is most likely to be part of both the payroll cycle and the revenue cycle?
A) Cash	
B) Customer
C) Receive Goods
D) Inventory
A

A) Cash

182
Q
15) Which entity is most likely to be part of the payroll cycle, expenditure cycle, and the revenue cycle?
A) Customer	
B) Cash
C) Supplier
D) Inventory
A

B) Cash

183
Q
16) Which of the following is a redundant entity that would be merged when two cycles are combined?
A) Customer
B) Employee	
C) Vendor
D) Inventory
A

D) Inventory

184
Q
17) In an integrated REA diagram, every event must be linked to
A) at least two resources.
B) at least two agents.	
C) at least one other event.
D) at least two other events.
A

B) at least two agents.

185
Q
18) In an integrated REA diagram, every resource must be must be linked to
A) at least two events.
B) at least two agents.	
C) at least one other resource.
D) at least two other resources.
A

A) at least two events.

186
Q
19) In an integrated REA diagram, every agent must be must be linked to
A) at least one resource.
B) at least two resources.
C) at least one event.
D) at least two events.
A

C) at least one event.

187
Q

21) When integrating multiple REA diagrams into an integrated REA diagram, merging redundant resources
A) always affects minimum cardinalities associated with the merged event.
B) sometimes affects minimum cardinalities associated with the merged event.
C) never affects minimum cardinalities associated with the merged event.
D) none of the above

A

C) never affects minimum cardinalities associated with the merged event.

188
Q

22) In an REA diagram, resource entities
A) can be linked to event entities in Business Cycle A and to event entities in Business Cycle B.
B) cannot be linked to event entities in Business Cycle A and to event entities in Business Cycle B.
C) cannot be linked to agent entities.
D) none of the above

A

A) can be linked to event entities in Business Cycle A and to event entities in Business Cycle B.

189
Q

23) When integrating multiple REA diagrams into an integrated REA diagram, to merge an event that appears in both business cycle REA diagrams,
A) the event that appears in both business cycle REA diagrams may be linked to either an event that is part of one business cycle or to an event that is part of another business cycle.
B) the event that appears in both business cycle REA diagrams may be linked to an event that is part of one business cycle and to an event that is part of another business cycle.
C) One cannot merge an event that appears in both business cycles.
D) none of the above

A

A) the event that appears in both business cycle REA diagrams may be linked to either an event that is part of one business cycle or to an event that is part of another business cycle.

190
Q
1) The primary key for a Purchase-Inventory table that consists of the Purchase Order Number and the Inventory Item Number, is known as a
A) concatenated key.
B) foreign key
C) primary key.
D) dual key.
A

A) concatenated key.

191
Q

2) When using an REA diagram to develop a database, a many-to-many relationship must be
A) broken into two, one-to-one relationships.
B) combined into a single one-to-one relationship.
C) combined into a one-to-many relationship.
D) broken into two, one-to-many relationships.

A

D) broken into two, one-to-many relationships.

192
Q
3) The type of relationship between two entities is determined by
A) maximum cardinalities only.
B) minimum cardinalities only.
C) minimum and maximum cardinalities.
D) median cardinalities.
A

A) maximum cardinalities only.

193
Q

4) Which of the following is not one of the steps in implementing an REA diagram in a relational database?
A) Implement many-to-many relationships with foreign keys.
B) Create tables for entities.
C) Assign attributes to tables and identify primary keys.
D) Implement one-to-many relationships with foreign keys.

A

A) Implement many-to-many relationships with foreign keys.

194
Q

5) Which of the following is not one of the three steps to implementing an REA diagram in a relational database?
A) Assign attributes to appropriate tables.
B) Create a table for each distinct entity in the diagram and for each many-to-many relationship.
C) Link every event to at least one resource.
D) Use foreign keys to implement one-to-one and one-to-many relationships.

A

C) Link every event to at least one resource.

195
Q

6) Why might the same REA diagram result in different relationship cardinalities?
A) Different organizations might have different business policies.
B) Different designers might implement an REA diagram differently.
C) Different consultants might draw an REA diagram differently.
D) Errors occur in the REA diagram.

A

A) Different organizations might have different business policies.

196
Q

7) What is the first step to implementing an REA diagram in a relational database?
A) Assign attributes to appropriate tables.
B) Create a table for each distinct entity in the diagram and for each many-to-many relationship.
C) Identify cardinalities.
D) Use foreign keys to implement one-to-one and one-to-many relationships.

A

D) Use foreign keys to implement one-to-one and one-to-many relationships.

197
Q

8) Which of the following is true with regards to REA diagrams and relational databases?
A) A well-designed relational database is the starting point for creating an REA diagram.
B) A well-designed REA diagram minimizes update, insert or delete anomaly problem when the diagram is implemented into a relational database.
C) REA diagrams and database design are generic across organizations.
D) The design of a relational database is specific to the organization being modeled.

A

D) The design of a relational database is specific to the organization being modeled.

198
Q

9) Which of the following is false with regards to creating database tables from an REA diagram?
A) A properly designed relational database has a table for each distinct entity in an REA diagram.
B) A properly designed relational database has a table for each many-to-many relationship in an REA diagram.
C) To reduce confusion, table names should not duplicate REA diagram entities’ names.
D) Many-to-many relationships will be shown in tables with hyphenated concatenations of the entities’ names.

A

C) To reduce confusion, table names should not duplicate REA diagram entities’ names.

199
Q

10) When assigning attributes to each table,
A) the database designer must interview users to identify which facts should be included in the database.
B) the database designer must interview management to identify which facts should be included in the database.
C) the database designer must use the REA diagram to help determine in which tables those facts belong.
D) the database designer must do all of the above.

A

D) the database designer must do all of the above.

200
Q

11) The primary key for M:N relationship tables
A) is a single attribute.
B) always consists of two attributes.
C) is the primary key of the most important entity linked to that relationship.
D) does not exist. Many-to-many relationship tables only use foreign keys.

A

B) always consists of two attributes.

201
Q

12) Attributes other than the primary key are
A) included to satisfy transaction processing requirements.
B) included to meet management’s information needs.
C) both A and B
D) none of the above

A

C) both A and B

202
Q

13) Which of the statements below is false with regards to the tables for M:N relationships?
A) Non-key attributes may be included.
B) Multiple attribute primary keys are used.
C) Single attribute primary keys may be used.
D) Concatenated keys are used.

A

C) Single attribute primary keys may be used.

203
Q

14) Which of the statements below is false with regards to creating database tables from an REA diagram?
A) M:N relationships must be implemented as separate tables.
B) 1:N relationships are implemented with the primary key of the 1 side becoming a foreign key on the N side.
C) 1:1 relationships are implemented with the primary key of either entity included as a foreign key in the table representing the other entity.
D) All of the above are true.

A

D) All of the above are true.

204
Q

15) Which of the following is not part of a “final accuracy check” when creating relational tables from an REA diagram?
A) Every attribute in every table is single-valued (i.e., each table is a flat file).
B) Every event must be linked to at least one resource.
C) Every table must have a primary key.
D) Other non-key attributes in each table must be either a fact about the thing designated by the primary key or foreign keys used to link that table to another table.

A

B) Every event must be linked to at least one resource.

205
Q

16) Concatenated keys are
A) only needed when combining two or more REA diagrams.
B) foreign keys used to implement 1:N or 1:1 relationships.
C) multiple attribute keys used to implement 1:N relationships.
D) required to implement M:N relationships.

A

D) required to implement M:N relationships.

206
Q
17) How many tables are needed to implement an REA data model that has six distinct entities, three M:N relationships and four 1:N relationships in a relational database?
A) 6
B) 9	
C) 11
D) 13
A

B) 9

207
Q
18) How many tables are needed to implement an REA data model that has five distinct entities, two M:N relationships and three 1:N relationships in a relational database?
A) 5
B) 7	
C) 8
D) 10
A

B) 7

208
Q
19) Which table is most likely to have a concatenated key?
A) customer	
B) sales
C) customer-sales
D) accounts receivable
A

C) customer-sales

209
Q
22) Which of the following attributes would typically be included in the table that stores data about the Customer entity in a relational database?
A) Invoice number
B) Credit limit
C) Product code
D) Backorder
A

B) Credit limit

210
Q
23) In a relational database, which of the following attributes would typically be included in the table that stores data about the Vendor entity?
A) Invoice number
B) Outstanding balance
C) Product code
D) Inventory
A

B) Outstanding balance

211
Q
24) In a relational database, which of the following attributes would typically be represented by a foreign key in the table that stores data about a Receive Inventory entity?
A) Purchase order number
B) Payment terms	
C) Product code
D) Date
A

A) Purchase order number

212
Q
25) In a relational database, which of the following attributes would typically be represented by a foreign key in the table that stores data about a Disburse Cash entity?
A) Amount
B) Date
C) Vendor number
D) Product number
A

C) Vendor number

213
Q

Which of the following would not be an attribute in the Purchases table?
A) address where purchase was made
B) person’s name or company name from whom the purchase was made
C) date of purchase
D) total amount of purchase

A

A) address where purchase was made

214
Q
32) Constructing a well-structured, well-developed REA diagram eliminates which anomaly problem(s)?
A) update	
B) insert
C) delete
D) all of the above
A

D) all of the above

215
Q
33) How many tables are needed to implement an REA data model that has four distinct entities, three M:N relationships and one 1:N relationships in a relational database?
A) 5
B) 7
C) 8
D) 10
A

B) 7

216
Q
34) How many tables are needed to implement an REA data model that has three distinct entities, two M:N relationships and two 1:N relationships in a relational database?
A) 5	
B) 7
C) 8
D) 10
A

A) 5

217
Q

35) Identify the attribute below that would not make a good primary key.
A) birthdate
B) social security number
C) a unique number automatically generated by the system
D) cell phone number

A

A) birthdate

218
Q
36) From the choices below, identify the attribute below that would make the best primary key.
A) height (in inches)
B) date of first purchase
C) zip code
D) customer telephone number
A

D) customer telephone number

219
Q

37) Rebus Fashions provides haircuts to men and women. Rebus uses an REA database to record information that is important to the firm. Rebus has a table named “Employee” where it keeps information about its hair stylists. Identify the attribute below that most likely does not belong in the Employee table.
A) Stylist phone number
B) Stylist hair cut specialties
C) Number of haircuts provided by a stylist on a given day
D) All of the above are appropriate attributes for the Employee table.

A

C) Number of haircuts provided by a stylist on a given day

220
Q

38) Rebus Fashions provides haircuts to men and women. Rebus uses an REA database to record information that is important to the firm. Rebus has a table named “Customer” where it keeps information about its customers. Identify the attribute below that most likely does not belong in the Customer table.
A) Customer hair color
B) Customer hair style
C) Customer address
D) All of the above are appropriate attributes for the Customer table.

A

D) All of the above are appropriate attributes for the Customer table.

221
Q

39) Rebus Fashions provides haircuts to men and women. Rebus uses an REA database to record information that is important to the firm. Rebus has an M:N table named “Customer-Sale” where it keeps information about customer sales. Identify the attribute below that most likely does not belong in the Customer-Sale table.
A) Date of sale
B) Time hair cut was started
C) Name of customer
D) All of the above are appropriate attributes for the Customer table.

A

C) Name of customer

222
Q

40) Rebus Fashions provides haircuts to men and women. Rebus charges $10 per haircut, no matter what type of haircut the customer selects. Rebus uses an REA database to record information that is important to the firm. Rebus has an M:N table named “Customer-Sale” where it keeps information about customer sales. Identify the attribute below that most likely does not belong in the Customer-Sale table.
A) Date of sale
B) Time hair cut was finished
C) Price of haircut
D) All of the above are appropriate attributes for the Customer table.

A

C) Price of haircut

223
Q

1) Nonfinancial information should be collected because
A) it may indicate events that may affect resources.
B) it can be used to plan other activities.
C) it can be used in transaction processing.
D) both A and B

A

D) both A and B

224
Q

2) When comparing REA diagrams used to design an AIS with a traditionally designed AIS,
A) traditional AIS information, such as journals and ledgers no longer exist.
B) similar information is present as in a traditional AIS, but stored in a different format.
C) queries are used to input data into the AIS.
D) an REA designed AIS cannot recreate a traditional journal.

A

B) similar information is present as in a traditional AIS, but stored in a different format.

225
Q

3) Which of the following is/are true with regards to using REA diagrams to retrieve information from a database?
A) Although neither journals nor ledgers appear explicitly in an REA diagram, each can be created through appropriate queries.
B) The information normally found in a journal is contained in the tables used to record data about events.
C) Much of the information about an organization’s assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database.
D) All of the above

A

D) All of the above

226
Q
4) Much of the information about an organization's assets that is traditionally recorded in ledgers is stored in \_\_\_\_\_\_\_\_ tables in an REA-based relational database. 
A) Account	
B) Agent
C) Event
D) Resource
A

D) Resource

227
Q
5) In an REA-based relational database, the information normally found in a \_\_\_\_\_\_\_\_ is contained in the tables used to record data about \_\_\_\_\_\_\_\_.
A) journal; events
B) journal; resources
C) ledger; events
D) ledger; resources
A

A) journal; events

228
Q

6) Which of the following is false with regards to REA models?
A) Many financial statement accounts are represented as resources in the REA model.
B) Accounts such as Accounts Receivable show up as entities in the REA model.
C) Some accounts represent an imbalance between two related events in the REA model.
D) Much of the information about an organization’s assets that is traditionally recorded in ledgers is stored in resource tables in an REA-based relational database.

A

B) Accounts such as Accounts Receivable show up as entities in the REA model

229
Q
7) Because information about temporal imbalances between two \_\_\_\_\_\_\_\_, such as accounts receivable and accounts payable, is needed so frequently, such calculated values are sometimes stored as \_\_\_\_\_\_\_\_ in the appropriate tables.
A) events; agents	
B) events; attributes
C) resources; agents
D) resources; attributes
A

B) events; attributes

230
Q

8) Which of the statements below is false with regards to generating financial statements from an REA-based relational database?
A) It is possible to use a completed REA diagram to guide the writing of queries to produce the information that would be included in financial statements.
B) Many financial statement items can be displayed by querying a single table.
C) It is unnecessary to understand the REA data model to know which tables need to be included in each query to generate the correct answers to financial statement questions.
D) A major advantage of the REA data model is that it integrates non-financial and financial data.

A

C) It is unnecessary to understand the REA data model to know which tables need to be included in each query to generate the correct answers to financial statement questions.

231
Q

9) Which of the statements below is false when comparing the REA model to the traditional AIS model?
A) Traditional AISs contain only data about the financial aspects of transactions.
B) A major advantage of the REA data model is that it integrates non-financial and financial data in the AIS and makes both types of data easily accessible to management.
C) In the REA model, many financial statement items can be displayed by querying a single table.
D) Accounts in the traditional AIS are analogous to resources in the REA-based relational database.

A

D) Accounts in the traditional AIS are analogous to resources in the REA-based relational database.

232
Q

10) The major benefits of using the REA model as the basis for designing an AIS include all of the following except
A) the REA data model integrates non-financial and financial data in the AIS.
B) the REA data model makes both non-financial and financial data easily accessible to management.
C) the REA data model provides the basis for building the kind of flexible AIS that is responsive to management’s changing information needs.
D) the REA data model reduces the need for accountants to understand the underlying accounting journals and ledgers.

A

D) the REA data model reduces the need for accountants to understand the underlying accounting journals and ledgers.

233
Q
11) Information traditionally found in journals is stored where in an REA database?
A) Event entity
B) Agent entity
C) Relationship 
D) Resource entity
A

A) Event entity

234
Q
12) A query that extracts, for a given time period, the total amount of all sales events for which there is no corresponding receive cash event will yield
A) a cash account ledger.
B) a credit sales journal.
C) an accounts receivable ledger.
D) an accounts payable journal.
A

D) an accounts payable journal.

235
Q
13) A query that extracts, for a given time period, all sales events for which there is no corresponding receive cash event on the date of the sales event will yield
A) a cash account ledger.
B) a credit sales journal.
C) an accounts receivable ledger.
D) an accounts payable journal.
A

B) a credit sales journal.

236
Q
14) A query that extracts, for a given time period, all purchases for which there is no corresponding disburse cash event will yield
A) a cash account ledger.
B) a credit sales journal.	
C) an accounts receivable ledger.
D) an accounts payable journal.
A

D) an accounts payable journal.

237
Q
18) Which of the following elements found in a traditional AIS system are not represented as entities in an REA relational database, but rather must be retrieved through the use of queries?
A) accounts receivable
B) the general ledger
C) accounts payable
D) all of the above
A

D) all of the above

238
Q
19) In a relational database designed according to the REA model, where is information about transactions stored?
A) Resource entities
B) Agent entities
C) Event entities
D) all of the above
A

C) Event entities

239
Q
20) In a relational database designed according to the REA model, where is information about an organization's liabilities generally stored?
A) Resource entities
B) Agent entities
C) Event entities
D) All of the above
A

A) Resource entities

240
Q
21) In a relational database designed according to the REA model, where is information about accounts receivable stored?
A) Event entities
B) Agent entities
C) Both A and B
D) None of the above
A

C) Both A and B