Chapter 2 – ‘Overview of Transaction Processing and Enterprise Resource Planning Systems’

Question 1

1. Which of the following is NOT a step in the data processing cycle?

a. data collection
b. data input
c. data storage
d. data processing

Answer 1

a. data collection [Correct. Data collection is a part of data input and is therefore not a step in the data processing cycle.]

Question 2

2. All of the information (name, GPA, major, etc.) about a particular student is stored in the same _______________ .

a. file
b. record
c. attribute
d. field

Answer 2

b. record [Correct. A record should include all information maintained by the system about a particular entity, such as a student.]

Question 3

3. Which of the following would contain the total value of all inventory owned by an organization?

a. source document
b. general ledger
c. cash budget

Answer 3

b. general ledger [Correct. The general ledger maintains summary information on inventory and every other general ledger account.]

Question 4

4. Which of the following is most likely to be a general ledger control account?

a. accounts receivable
b. petty cash
c. prepaid rent
d. retained earnings

Answer 4

a. accounts receivable [Correct. Accounts receivable is typically made up of many individual customer accounts maintained in a subsidiary ledger. The total of all individual customer accounts in the subsidiary ledger is maintained in the accounts receivable control account in the general ledger.]

Question 5

5. Which of the following documents is most likely to be used in the expenditure cycle?

a. sales order
b. credit memo
c. receiving report
d. job time ticket

Answer 5

c. receiving report [Correct. A receiving report is an expenditure cycle document that is used to record the receipt of goods from suppliers. Companies pay their suppliers based on the goods received and recorded on the receiving report.]

Question 6

6. Which of the following is LEAST likely to be a specialized journal?

a. sales journal
b. cash receipts journal
c. prepaid insurance journal
d. cash disbursements journal

Answer 6

c. prepaid insurance journal [Correct. A specialized journal is used to record large num- bers of repetitive transactions, and most companies have very few prepaid insurance transactions.]

Question 7

7. How does the chart of accounts list general ledger accounts?

a. alphabetical order
b. chronological order
c. size order
d. the order in which they appear in financial statements

Answer 7

d. the order in which they appear in financial statements [Correct.]

Question 8

8. Which of the following is NOT an advantage of an ERP system?

a. better access control
b. standardization of procedures and reports
c. improved monitoring capabilities
d. simplicity and reduced costs

Answer 8

d. simplicity and reduced costs [Correct. ERP systems are quite complex and costly; they do not offer the advantages of simplicity and reduced costs.]

Question 9

9. Records of company data sent to an external party and then returned to the system as in- put are called.

a. turnaround documents
b. source data automation documents
c. source documents
d. external input documents

Answer 9

a. turnaround documents [Correct. For example, a utility bill is sent to a customer, who then returns the bill with payment.]

Question 10

10. Recording and processing information about a transaction at the time it takes place is referred to as which of the following?

a. batch processing
b. online, real-time processing
c. captured transaction processing
d. chart of accounts processing

Answer 10

b. online, real-time processing [Correct. Online, real-time processing involves processing transactions as they occur.]