Chapter 1

Question 1

is a prescribed sequence of work steps performed in order
to produce a desired result for the organization. A business process is initiated
by a particular kind of event, has a well-defined beginning and end, and is
usually completed in a relatively short period.

Answer 1

Business process

Question 2

are the set of proce-
dures and policies adopted within an organization to safeguard its assets, check
the accuracy and reliability of its data, promote operational efficiency, and
encourage adherence to prescribed managerial practices.

Answer 2

Internal controls

Question 3

comprises the processes, procedures, and
systems that capture accounting data from business processes; record the
accounting data in the appropriate records; process the detailed accounting data
by classifying, summarizing, and consolidating; and report the summarized
accounting data to internal and external users.

Answer 3

Accounting information system

Question 4

Vendor

Answer 4

provides materials or operating supplies to an organization. The
terms “vendor” and “supplier” are usually used interchangeably.

Question 5

is the entities, processes, and
information flows that involve the movement of materials, funds, and related
information through the full logistics process, from the acquisition of raw mate-
rials to the delivery of finished products to the end user. The supply chain
includes all vendors, service providers, customers, and intermediaries.

Answer 5

Supply chain

Question 6

The concept of monitoring and controlling the linked set of activities in the
supply chain is called ________. _________ is
the organization and control of all materials, funds, and related information in
the logistics process, from the acquisition of raw materials to the delivery of
finished products to the end user (customer).

Answer 6

supply chain management

Question 7

is defined
as the computers, ancillary equipment, software, services, and related resources
as applied to support business processes. It’s usage used to support business processes
accomplishes one or more of the objectives

Answer 7

Information technology

Question 8

Objectives of information technology

Answer 8

1. Increased efficiency of business processes
2. Reduced cost of business processes
3. Increased accuracy of the data related to business processes

Question 9

is the purposeful and organized
changing of business processes to make them more efficient. BPR not only
aligns business processes with the IT systems used to record processes, it
also improves efficiency and effectiveness of these processes

Answer 9

Business process reengineering (BPR)

Question 10

This concept of revising processes as IT enabling
occurs is called

Answer 10

business process reengineering.

Question 11

data hierarchy in computer systems, as follows:

Answer 11

1. Bit, or binary digit
2. Byte
3. Field
4. Record
5. File
6. Database

Question 12

is a shortened reference to binary digit, it is the smallest unit of
information in a computer system. It can have only one of two values: zero
or one. All data in a computer system are reduced to a set of bits, or zeros and
ones

Answer 12

Bit

Question 13

is a unit of storage that represents one character. In most computer
systems, a _____is made up of eight bits.

Answer 13

byte

Question 14

is one item within a record. For example, last name is a field in a pay-
roll record, and description is a field in an inventory record.

Answer 14

field

Question 15

is a set
of related fields for the same entity. All fields for a given employee form a
payroll record. Such fields would be employee number, last name, first name,
Social Security number, pay rate, and year-to-date gross pay. The entire set of
related records form a file.

Answer 15

Record

Question 16

The entire collection of files is called a database.

Question 17

is a collection of data stored on the computer in a form that allows
the data to be easily accessed, retrieved, manipulated, and stored.

Answer 17

Database

Question 18

stores data in several small two-dimensional tables that can be joined
together in many varying ways to represent many different kinds of relation-
ships among the data.

Answer 18

Relational database

Question 19

are the relatively permanent files that
maintain the detailed data for each major process.

Answer 19

master files

Question 20

is the set of relatively temporary records that will be processed
to update the master file

Answer 20

Transaction file

Question 21

files store records in sequence,
with one record stored immediately after another. The sequence is usually based
on a key field such as employee number or customer number. Sequential files
are read and written in sequence.

Answer 21

Sequential access

Question 22

files (sometimes called direct access files) are not written
or read in sequential order. The records are stored in random order on a disk
media. Since records are distributed randomly on the disk surface, an under-
lying system enables the computer to find a record among the random
records, using either a randomized formula or a hashing scheme to assign a
specific address to each record

Answer 22

Random access

Question 23

There are situations where the same files may sometimes be accessed either
way, sequentially or randomly. In cases where both access methods are neces-
sary, some systems use the________.files are stored sequentially, but can also be accessed randomly because an index
allows random access to specific records.

Answer 23

indexed sequential access method (ISAM).

Question 24

There are also two modes of processing transactions in accounting systems:
batch processing and online processing.

Question 25

requires that all sim- ilar transactions be grouped together for a specified time; then this group of transactions is processed as a batch. Batch processing is best suited to applica- tions having large volumes of similar transactions that can be processed at regular intervals.

Answer 25

Batch processing

Question 26

is the opposite of batch processing. Transactions are not grouped into batches, but each transaction is entered and processed one at a time.

Answer 26

Online processing

Question 27

meaning that the transaction is processed immediately, and in real time, so that the output is available immediately.

Answer 27

real-time processing systems

Question 28

is an integrated collection of enterprise-wide data that includes five to ten fiscal years of nonvolatile data, used to support management in decision making and planning

Answer 28

data warehouse

Question 29

contains the data that are continually updated as transactions are processed. Usually, the operational database includes data for the current fiscal year and sup- ports day-to-day operations and record keeping for the transaction processing systems.

Answer 29

Operational database

Question 30

is the process of searching data within the data warehouse for identifiable pat- terns that can be used to predict future behavior.

Answer 30

Data mining

Question 31

is two or more computers linked together to share infor- mation and/or resources.

Answer 31

computer network

Question 32

is a computer network that spans a relatively small area.

Answer 32

LAN Local Area Network

Question 33

Most LANs are confined to a single building or group of buildings and are intended to connect computers within an organization. However, one LAN can be connected to other LANs over any distance via other network connections. A system of LANs connected in this way is called a

Answer 33

WAN, or wide area network.

Question 34

is the global computer network, or “information super-high- way.

Answer 34

Internet

Question 35

is a company’s private network accessible only to the employ- ees of that company. The intranet uses the common standards and protocols of the Internet. However, the computer servers of the intranet are accessible only from internal computers within the company. The purposes of an intranet are to distribute data or information to employees, to make shared data or files available, and to manage projects within the company.

Answer 35

intranet

Question 36

is similar to an intranet except that it offers access to selected outsiders, such as buyers, suppliers, distributors, and wholesalers in the supply chain. Extranets allow business partners to exchange information.

Answer 36

extranet

Question 37

is a contemporary type of computer infra- structure used by a growing number of companies. Cloud computing involves the use of shared services, software and/or data stored on servers at a remote location. These resources are accessible over a network such as the Internet

Answer 37

Cloud computing environment

Question 38

is the use of electronic means to enhance business processes. E-business encompasses all forms of online electronic trading—consumer- based e-commerce and business-to-business transactions, as well as the use of IT for process integration inside organizations

Answer 38

E-business

Question 39

is the intercompany, computer-to-computer transfer of business documents in a standard business format.

Answer 39

Electronic data interchange (EDI)

Question 40

“Intercom- pany” refers to two or more companies conducting business electronically. For example, a buyer of parts may use EDI to purchase parts from its supplier. (2) The computer-to-computer aspect of the definition indicates that each com- pany’s computers are connected via a network. (3) A standard business format is necessary so that various companies, vendors, and sellers can interact and trade electronically by means of EDI software. EDI is used to transmit pur- chase orders, invoices, and payments electronically between trading partners

Question 41

is a system of hardware and software that cap- tures retail sales transactions by standard bar coding.

Answer 41

point of sale system (POS)

Question 42

is a computer hardware and software system in which the software matches an invoice to its related purchase order and receiving report

Answer 42

Automated matching

Question 43

is an invoice-less system in which computer hardware and software complete an invoice-less match comparing the purchase order with the goods received

Answer 43

Evaluated receipt settlement (ERS)

Question 44

are both terms that refer to Web-enabled receipt and payment of vendor invoices. EIPP enables a vendor to present an invoice to its trading partner via the Internet, eliminating the paper, printing, and postage costs of traditional paper invoicing

Answer 44

E-payables and electronic invoice presentment and payment (EIPP)

Question 45

is a multi-module software system designed to manage all aspects of an enterprise. ERP systems are usually bro- ken down into modules such as financials, sales, purchasing, inventory manage- ment, manufacturing, and human resources.

Answer 45

Enterprise resource planning (ERP)

Question 46

. . a process, effected by an entity’s board of directors, management and other per- sonnel, applied in strategy setting and across the enterprise, designed to identify poten- tial events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.

Answer 46

Enterprise risk management (ERM)