Which of the following is a business resource?

Raw Material, Labor, Information

Which level of management is responsible for short-term planning and coordination of activities necessary to accomplish organizational objectives?

Middle Management

Which level of management is responsible for controlling day-to-day operations?

Operations Management

The ability to achieve the goals of a system depends upon the effective functioning and harmonious interaction between its subsystems. This is called___

Subsystem Interdependency

The value of information for users is determined by all of the following but 

Convenience

An example of a nonfinancial transaction is

log of customer calls 

An example of a financial transaction is

the purchase of a computer

Which subsystem is not part of the Accounting Information System?

Expert System

The major difference between the Financial Reporting System (FRS) and the Management Reporting System (MRS) is the 

FRS provides information to internal and external users: the MRS provides information to internal users

The purpose of the Transaction Processing System includes all of the following except

measuring and reporting the status of financial resources and the changes in those resources

The Transaction Processing System includes all of the following cycles except

The Administrative

The primary input to the Transaction Processing System is 

a financial transaction

When designing the data collection activity, which type of data should be avoided?

redundant

The most basic element of useful data in the database is 

the attribute

In a database, a complete set of attributes for a single occurrence of an entity class is called

a record

Effective information has all of the following characteristics except

structure

Database management tasks do not include 

summarization

The author distinguishes between the Accounting Information System and the Management Information System based on

whether the transactions are financial or nonfinancial

Which activity is not part of the finance function?

general ledger

Market research and advertising are part of which business function?

marketing

Which function manages the financial resources of the firm through portfolio management, banking, credit evaluation, and cash receipts and disbursements?

finance

Which of the following is not part of the accounting function?

managing the physical information system of the firm

The term "accounting independence" refers to 

separation of duties, such as record keeping and custody of physical resources

In the distributed data processing approach

computer services are organized into small information processing units under the control of end users

The data control group is responsible for 

liaison between the end user and data processing

Data processing does not involve

system maintenance

Attestation services are performed by

external auditors

The objectives of all information systems include all of the following except

evaluating transaction data

Which individuals may be involved in the Systems Development Life Cycle?

Accountants, system professionals, and end users

An appraisal function housed within the organization that performs a wide range of services for management is 

internal auditing

Advantages of a database system include all of the following except

open access to all data by all users

Disadvantages of distributed data processing include all of the following except

cost reductions

Advantages of distributed data processing include each of the following except

better management of organization resources

Disadvantages of the distributed data processing approach include all of the following except

system is not responsive to the user's situation

ERP packages include all of the following modules

Human resources, general ledger, and inventory management

All of the following are external end users except

cost accountants

Useful information must possess all of the following characteristics except 

precision

The objectives of an information system include each of the following except

furthering the financial interests of shareholders

Accountants play many roles relating to the accounting information system except

system converters

Which system is not part of the expenditure cycle?

production planning/control

Which system produces information used for inventory valuation, budgeting, cost control, performance reporting, and make-buy decisions?

cost accounting

Which of the following is a turn-around document

remittance advice

The order of the entries made in the ledger is by 

account number

The order of the entries made in the general journal is by 

date

In general, a special journal would not be used to record

depreciation

Sibsidiary ledgers are used in manual accounting environments. What file is comparable to a subsidiary ledger in a computerized environment?

master file

A journal is used in manual accounting environments. What file is comparable to a journal in a computarized environment?

archive file

In a computarized environment, a list of authorized suppliers would be found in the 

reference file

Which of the following is an archive file?

a file of accounts receivable that have been written off

Which document is not a type of source document?

a paycheck

The most important purpose of a turnaround document is to

serve as a source document

Which type of graphical documentation represents systems at different levels of detail?

data flow diagram

Data flow diagrams

depict logical tasks that are being performed, but not who is performing them

System flowcharts

represent relationships between key elements of both manual and computer systems.

When determining the batch size, which consideration is the least important?

complying with legal mandates

In contrast to a real-time system, in a batch processing system

there is a lag between the time when the economic event occurs and the financial records are updated

In contrast to a batch processing system, in a real-time system

processing takes place when the economic event occurs

The type of transaction most suitable for batch processing is 

payroll processing

The type of transaction most suitable for real-time processing is

recording a sale on account

Which step is not found in batch processing using sequential files?

immediate feedback of data entry errors

Both the revenue and the expenditure cycle can be viewed as having two key parts. These are 

physical and financial

All of the following can provide evidence of an economic event except 

master document

The characteristics that distinguish between batch and real-time systems include all of the following except

file format

A file that stores data used as a standard when processing transactions is

a reference file

Sequential storage means

reading record 100 requires first reading records records 1 to 99

Real-time processing would be most beneficial in handling a firm's

merchandise inventory

Which accounting application is least suited to batch processing?

sales order processing

Which accounting application is best suited to batch processing?

credit checking

Operational inefficiencies occur because

accounts common to many concurrent transactions need to be updated in real time

Operational efficiencies can be improved by 

updating accounts unique to many concurrent transactions in real time and updating common accounts in batch mode

The coding scheme most appropriate for a chart of accounts is

block code

A common use for sequential coding is 

identifying documents

The most important advantage of sequential coding is that 

missing or unrecorded documents can be identified

When a firm wants its coding system to convey meaning without reference to any other document, it would chose 

a mnemonic code

The most important advantage of an alphabetic code is that 

the capacity to represent items is increased

Which ethical principle states that the benefit from a decision must outweigh the risks, and that there is not alternative decision that provides the same or greater benefit with less risk?

proportionality

Individuals who acquire some level of skill and knowledge in the field of computer ethics are involved in which level of computer ethics?

para computer

All of the following are factors in the fraud triangle except

materiality of the assets

Which characteristic is not associated with software as intellectual property?

automated monitoring to detect intruders

For an action to be called fraudulent, all of the following conditions are required except

poor judgement

One characteristic of employee fraud is that the fraud

involves the direct conversion of cash or other assets to the employee's personal benefit

Forces which may permit fraud to occur do not include

centralized decision making environment

Which of the following best describes lapping?

applying cash receipts to a different customers' account in attempt to conceal previous thefts of funds

Skimming involves

stealing cash from an organization before it is recorded

Who is responsible for establishing and maintaining the internal control system?

management

The concept of reasonable assurance suggests that 

the cost of an internal control should be less than the benefit it provides

Which of the following is not a limitation of the internal control system?

the industry is inherently risky

The most cost-effective type of internal control is

preventive control

Which of the following is a preventive control?

credit check before approving a sale on account

A well-designed purchase order is an example of a 

preventive control

A physical inventory count is an example of a

detective control

The bank reconciliation uncovered a transposition error in the books. This is an example of a 

detective control

In balancing the risks and benefits that are part of every ethical decision, managers receive guidance from each of the following except

self interest

Which of the following is not an element of the internal control environment

well-designed documents and records

Which of the following suggests a weakness in the internal control environment?

performance evaluations are prepared every three years

Which of the following indicates a strong internal control environment?

the internal audit group reports to the audit committee of the board of directors

According to SAS 78, an effective accounting system performs all of the following except

separates the duties of data entry and report generation

Which of the following is the best reason to separate duties in a manual system?

to prevent the record keeper from authorizing transactions

Cash larceny involves

stealing cash from an organization after it has been recorded

Which of the following is not an internal control procedure?

management's operating style

The decision to extend credit beyond the normal credit limit is an example of

authorization

When duties cannot be segregated, the most important internal cois ntrol procedure 

supervision

An accounting system that maintains an adequate audit trail is implementing which internal control procedure?

accounting records

Employee fraud involves three steps. Of the following, which is not involved?

misstating financial statements

Which of the following is not an example of independent verification?

permitting authorized users only to access the accounting system

The importance to the accounting profession of the Sarbanes-Oxley Act is that

management are required to certify their internal control system

The board of directors consists entirely of personal friends of the chief executive officer. This indicates a weakness in

the control environment

A shell company fraud involves

manufacturing false purchase orders, receiving reports, and invoices

When certain customers made cash payments to reduce their accounts receivable, the bookkeeper embezzled the cash and wrote off the accounts as uncollectible. Which control procedure would most likely prevent this irregularity?

segregation of duties

The office manager forgot to record in the accounting records the daily bank deposit. Which control procedure would most likely prevent or detect this error?

independent verification

Business ethics involves

how managers decide on what is right in conducting business and achieve what they decide is right for the business

All of the following are conditions for fraud except

material reliance

The four principal types of fraud include all of the following except

 gratuities

Control activities under SA 78/COSO include 

general controls, application controls, and physical controls

Internal control system have limitations. These include all of the following except

stability of systems

Management can expect various benefits to follow from implementing a system of strong internal control. Which of the following benefits is least likely to occur?

previous employee collusion to commit fraud

Which of the following situations is not a segregation of duties violation?

The warehouse clerk, who has the custodial responsibility over inventory in the warehuse, selects the vendor and authorizes purchases when inventories are low

Which of the following are issues to be addressed in a business code of ethics required by the SEC?

Conflicts of interests, Full and Fair Disclosures, Legal Compliance, Internal Reporting of Code Violations