BIS309 - Chapter 2

Chapter 2
Introduction to Transaction Processing
TRUE/FALSE
1.
Processing more transactions at a lower unit cost makes batch processing more efficient than real-
time
systems.
ANS:
T
2.
The process of acquiring raw materials is part of the conversion cycle.
ANS:
F
3.
Directing work-in-process through its various stages of manufacturing is part of the conversion
cycle.
ANS:
T
4.
The top portion of the monthly bill from a credit card company is an example of a turn-around
document.
ANS:
T
5.
The general journal is used to record recurring transactions that are similar in nature.
ANS:
F
6.
Document flowcharts are used to represent systems at different levels of detail.
ANS:
F
7.
Data flow diagrams represent the physical system.
ANS:
F
8.
Document flowcharts are often used to depict processes that are handled in batches.
ANS:
T
9.
Program flowcharts depict the type of media being used (paper, magnetic tape, or disks) and termin
als.
ANS:
F
10.
System flowcharts represent the input sources, programs, and output products of a computer system.
ANS:
T
11.
Program flowcharts are used to describe the logic represented in system flowcharts.
ANS:
T
12.
Batch processing systems can store data on direct access storage devices.
ANS:
T
13.
Backups are automatically produced in a direct access file environment.
ANS:
F
14.
The box symbol represents a temporary file.
ANS:
F
15.
Auditors may prepare program flowcharts to verify the correctness of program logic.
ANS:
T
16.
A control account is a general ledger account which is supported by a subsidiary ledger.
ANS:
T
17.
The most significant characteristic of direct access files is access speed.
ANS:
T
18.
Real time processing is used for routine transactions in large numbers.
ANS:
F
19.
Batch processing is best used when timely information is needed because this method processes dat
a
efficiently.
ANS:
F
20.
An inverted triangle with the letter
揘
represents a file in
搉
ame
order.
ANS:
F
21.
Real-time processing in systems that handle large volumes of transactions each day can create
operational inefficiencies.
ANS:
T
22.
Operational inefficiencies occur because accounts unique to many concurrent transactions need to b
e
updated in real time.
ANS:
F
23.
Operational inefficiencies occur because accounts common to many concurrent transactions need to
be
updated in real time.
ANS:
T
24.
Batch processing of noncritical accounts improves operational efficiency.
ANS:
T
25.
Batch processing of accounts common to many concurrent transactions reduces operational efficien
cy.
ANS:
F
MULTIPLE CHOICE
1.
Which system is not part of the expenditure cycle?
a.
cash disbursements
b.
payroll
c.
production planning/control
d.
purchases/accounts payable
ANS:
C
2.
Which system produces information used for inventory valuation, budgeting, cost control,
performance reporting, and make-buy decisions?
a.
sales order processing
b.
purchases/accounts payable
c.
cash disbursements
d.
cost accounting
ANS:
D
3.
Which of the following is a turn-around document?
a.
remittance advice
b.
sales order
c.
purchase order
d.
payroll check
ANS:
A
4.
The order of the entries made in the ledger is by
a.
transaction number
b.
account number
c.
date
d.
user
ANS:
B
5.
The order of the entries made in the general journal is by
a.
date
b.
account number
c.
user
d.
customer number
ANS:
A
6.
In general a special journal would not be used to record
a.
sales
b.
cash disbursements
c.
depreciation
d.
purchases
ANS:
C
7.
Which account is least likely to have a subsidiary ledger?
a.
sales
b.
accounts receivable
c.
fixed assets
d.
inventory
ANS:
A
8.
Subsidiary ledgers are used in manual accounting environments. What file is comparable to a
subsidiary ledger in a computerized environment?
a.
archive file
b.
reference file
c.
transaction file
d.
master file
ANS:
D
9.
A journal is used in manual accounting environments. What file is comparable to a journal in a
computerized environment?
a.
archive file
b.
reference file
c.
transaction file
d.
master file
ANS:
C
10.
In a computerized environment, a list of authorized suppliers would be found in the
a.
master file
b.
transaction file
c.
reference file
d.
archive file
ANS:
C
11.
Which of the following is an archive file?
a.
an accounts payable subsidiary ledger
b.
a cash receipts file
c.
a sales journal
d.
a file of accounts receivable that have been written off
ANS:
D
12.
Which document is not a type of source document?
a.
a sales order
b.
an employee time card
c.
a paycheck
d.
a sales return receipt
ANS:
C
13.
The most important purpose of a turn-around document is to
a.
serve as a source document
b.
inform a customer of the outstanding amount payable
c.
provide an audit trail for the external auditor
d.
inform the bank of electronic funds deposits
ANS:
A
14.
Which type of graphical documentation represents systems at different levels of detail?
a.
data flow diagram
b.
document flowchart
c.
system flowchart
d.
program flowchart
ANS:
A
15.
Data flow diagrams
a.
depict logical tasks that are being performed, but not who is performing them
b.
illustrate the relationship between processes, and the documents that flow between them
and trigger activities
c.
represent relationships between key elements of the computer system
d.
describe in detail the logic of the process
ANS:
A
16.
Document flowcharts
a.
depict logical tasks that are being performed, but not who is performing them
b.
illustrate the relationship between processes, and the documents that flow between them
and trigger activities
c.
represent relationships between key elements of the computer system
d.
describe the logic of the process
ANS:
B
17.
When determining the batch size, which consideration is the least important?
a.
achieving economies by grouping together large numbers of transactions
b.
complying with legal mandates
c.
providing control over the transaction process
d.
balancing the trade off between batch size and error detection
ANS:
B
18.
In contrast to a real-time system, in a batch processing system
a.
there is a lag between the time when the economic event occurs and the financial records
are updated
b.
relatively more resources are required
c.
a greater resource commitment per unit of output is required
d.
processing takes place when the economic event occurs
ANS:
A
19.
In contrast to a batch processing system, in a real-time system
a.
a lag occurs between the time of the economic event and when the transaction is recorded
b.
relatively fewer hardware, programming, and training resources are required
c.
a lesser resource commitment per unit of output is required
d.
processing takes place when the economic event occurs
ANS:
D
20.
The type of transaction most suitable for batch processing is
a.
airline reservations

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Chapter 2

Introduction to Transaction Processing

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