ACCT2000 Chapter Notes - Chapter 2: Subledger, Enterprise Resource Planning, General Ledger

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11 Oct 2018

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Week one transaction processing and enterprise resource planning. The data processing cycle involves the four operations performed on data to generate meaningful and relevant information. The first step in processing input is to capture transaction data and enter them into the system. The data capture process is usually triggered by a business activity and three facets of this activity must be captured: Source documents are those used to capture transaction data at its source when the transaction takes place. Turnaround documents are records of company data sent to an external party and then returned to the system as input. Turnaround documents are in machine-readable form to facilitate their subsequent processing as input records. Source data automation is the collection of transaction data in machine-readable form at the time and place of origin. The second step in processing input is to make sure captured data are accurate and complete.

Related Questions

2.5. Match the following terms with their definitions.

Term

_____a. dataprocessing cycle

_____b. source documents

_____c. turnaround documents

_____d. source data automation

_____e. general ledger

_____f. subsidiary ledger

_____g. control account

_____h. coding

_____i. sequence code

_____j. block code

_____k. groupcode

_____l. mnemonic code

_____m. chart ofaccounts

_____n. general journal

_____o. specialized journal

_____p. audittrail

_____q. entity

_____r. attribute

_____s. field

_____t. record

_____u. datavalue

_____v. master file

_____w. transactionfile

_____x. database

_____y. batchprocessing

_____z. online, real-time processing

Definition

1. Contains summary-level data for every asset, liability, equity,revenue, and expense account

2. Items are numbered consecutively to account for all items; missingitems cause a gap in the numerical sequence

3. Path of a transaction through a data processing system from pointof origin to final output, or backward from final output to pointof origin

4. List of general ledger account numbers; allows transaction data tobe coded, classified, and entered into proper accounts; facilitatespreparation of financial statements and reports

5. Contents of a specific field, such as âGeorgeâ in a name field

6. Portion of a data record that contains the data value for aparticular attribute, like a cell in a spreadsheet

7. Company data sent to an external party and then returned to thesystem as input

8. Used to record infrequent or nonroutine transactions

9. Characteristics of interest that need to be stored

10. Thesteps a company must follow to efficiently and effectively processdata about its transactions

11. Something about which information is stored

12. Storescumulative information about an organization; like a ledger in amanual AIS

13. Contains detailed data for any general ledger account with manyindividual subaccounts

14. Contains records of individual business transactions that occurduring a specific time period

15. Updating each transaction as it occurs

16. Devicesthat capture transaction data in machine-readable form at the timeand place of their origin

17. Used torecord large numbers of repetitive transactions

18. Set ofinterrelated, centrally coordinated files

19. Two ormore subgroups of digits are used to code items

20. Updating done periodically, such as daily

21. Systematic assignment of numbers or letters to items to classifyand organize them

22. Lettersand numbers, derived from the item description, are interspersed toidentify items; usually easy to memorize

23. Initialrecord of a transaction that takes place; usually recorded onpreprinted forms or formatted screens

24. Fieldscontaining data about entity attributes; like a row in aspreadsheet

25. Sets ofnumbers are reserved for specific categories of data

26. Thegeneral ledger account corresponding to a subsidiary ledger, wherethe sum of all subsidiary ledger entries should equal the amount inthe general ledger account

fuchsiahorse793

Question 1

Identify the item below that is not one of the four different types of data processing activities.

		deleting
		reading
		creating
		using

Question 2

All of the following are advantages of an ERP system except

		ERPs permit manufacturing plants to receive new orders in real time.
		in an ERP, data input is captured or keyed once.
		it takes considerable experience and training to use an ERP system effectively.
		ERPs permit management to gain greater visibility into every area of the enterprise.

Question 3

Sam Jones has been the controller of Downtown Tires for 25 years. Ownership of the firm recently changed hands and the new owners are conducting an audit of the financial records. The audit has been unable to reproduce financial reports that were prepared by Sam. While there is no evidence of wrongdoing, the auditors are concerned that the discrepancies might contribute to poor decisions. Which of the following characteristics of useful information is absent in the situation described above?

		relevant
		reliable
		complete
		timely
		understandable
		verifiable
		accessible

Question 4

An ERP system might facilitate the purchase of direct materials by all of the following except

		preparing a purchase order when inventory falls to reorder point.
		routing a purchase order to a purchasing agent for approval.
		communicating a purchase order to a supplier.
		selecting the best supplier by comparing bids.

Question 5

Antia Carmie is the largest collector and retailer of Japanese fans in the St. Louis area. Antia uses computer technology to provide superior customer service. The store's database system was designed to make detailed information about each Japanese fan easily accessible to her customers. Accordingly, the fan price and condition are provided for each fan, along with many pictures of each fan. In Antia's database, the price of the Japanese fans is a(n)

		entity.
		attribute.
		field.
		record.

Question 6

Which of the following is not considered a source document?

		A copy of the company's shipping document.
		A copy of the company's ledger.
		A copy of the company's sales journal.
		A copy of the company's financial statements.

Question 7

In an ERP system, the module used to record data about transactions in the disbursement cycle is called

		financial.
		order to cash.
		customer relationship management.
		purchase to pay.

Question 8

Baggins Incorporated identifies new product development and product improvement as the top corporate goals. An employee developed an innovation that will correct a shortcoming in one of the company's products. Although Baggins current Return on Investment (ROI) is 12%, the product innovation is expected to generate ROI of only 10%. As a result, awarding bonuses to employees based on ROI resulted in

		goal conflict.
		information overload.
		decreased value of information.
		goal congruence.

Question 9

________ are examples of activities that constitute inbound logistics.

		Activities that transform inputs into final products or services
		Activities that provide post-sale support to customers
		Activities that consist of receiving, storing, and distributing the materials used as inputs by the organization to create goods and/or services it sells
		Activities that help customers to buy the organization's products or services

Question 10

In which transaction cycle would information for inventory purchases be most likely to pass between internal and external accounting information systems?

		the revenue cycle
		the expenditure cycle
		the human resources / payroll cycle
		the financing cycle

Question 11

The collection of customer payment is part of which transaction cycle?

		the human resources cycle
		the production cycle
		the revenue cycle
		the expenditure cycle

Question 12

Which of the following is an example of source data automation?

		POS (point-of-sale) scanners in retail stores
		a bill of lading
		a subsidiary ledger
		a utility bill

Question 13

All of the following are guidelines for developing a good coding system except

		be as sophisticated as possible to promote usage.
		be consistent with its intended use.
		be flexible to allow for growth.
		be consistent with the company's organization structure.

Question 14

What is a key decision that needs to be made with regards to borrowing money from lenders?

		the location
		pro forma income statement
		how much capital to acquire
		job descriptions

Question 15

Identify the false statement below.

		A service company does not have an inventory system.
		Retail stores do not have a production cycle.
		Financial institutions have installment-loan cycles.
		Every organization should implement every transaction cycle module.

Question 16

The chart of accounts of a fast-food restaurant would probably include

		a list of customers.
		a list of financial statement accounts.
		a list of vendors.
		a list of employees.

Question 17

Which statement below regarding the AIS is false?

		Traditionally, most AIS have been designed so that both financial and operational data are stored in a manner that facilitates their integration in reports.
		The AIS must be able to provide managers with detailed and operational information about the organization's performance.
		Both traditional financial measures and operational data are required for proper and complete evaluation of performance.
		The AIS was often just one of the information systems used by an organization to collect and process financial and nonfinancial data.

Question 18

In Petaluma, California, electric power is provided to consumers by Pacific Power. Each month Pacific Power mails bills to 186,000 households and then processes payments as they are received. What is the best way for this business to ensure that payment data entry is efficient and accurate?

		well-designed paper forms
		turnaround documents
		source data automation
		sequentially numbered bills

Question 19

Data must be converted into information to be considered useful and meaningful for decision making. There are seven characteristics that make information both useful and meaningful. If the same information can be reproduced by two independent and knowledgeable people, it is representative of the characteristic of

		verifiability.
		truthful.
		relevance.
		reliability.

Question 20

		entity.
		attribute.
		field.
		record.

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ACCT2000 Chapter Notes - Chapter 2: Subledger, Enterprise Resource Planning, General Ledger

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