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Accounting Information System > Chapter 2- Transaction Processing > Flashcards

Chapter 2- Transaction Processing Flashcards

1
Q

Three major subsystems of the Transaction Processing System (TPS)

A

The revenue cycle, expenditure cycle, and the conversion cycle

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2
Q

What is a financial transaction?

A

An economic event that affects the assets and equities of the firm, is reflected in its accounts and is measured in monetary terms

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3
Q

The following are economic exchanges with external parties, EXCEPT one
a. sale of goods or services
b. purchase of inventory
c. discharge of financial obligations
d. receipt of cash on account from customers
e. depreciation of fixed assets

A

E. Depreciation of fixed assets

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4
Q

Transaction cycles exist in all types of business

A

Both profit-seeking and not-for-profit seeking

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5
Q

What are the subsystems of an Expenditure Cycle?

A

Purchasing/Accounts Payable
Cash Disbursements
Payroll
Fixed Assets

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6
Q

What are the two subsystems of the Conversion Cycle?

A

Production Planning and Control
Cost Accounting

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7
Q

What are the two subsystems of Revenue Cycle?

A

Sales Order Processing
Cash Receipts

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8
Q

Three factors that affect the expenditure and conversion cycle

A

Labor, Materials, and Physical Plant

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9
Q

Expenditure transactions are based on

A

credit relationship between trading parties

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10
Q

What are the two parts of Expenditure transactions?

A

Physical Component (acquisition of goods) and Financial Component (cash disbursement to the supplier)

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11
Q

This system recognizes the need to acquire physical inventory (such as raw materials) and places an order with the vendor.

A

Purchases/Accounts Payable System

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12
Q

When the obligation created in the purchases system is due, the cash disbursements system authorizes the payment, disburses the funds to the vendor, and records the transaction by reducing the cash and accounts payable accounts.

A

Cash Disbursements Systems

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13
Q

This is a special case Purchases

A

Payroll

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14
Q

This collects labor usage data for each employee, computes the payroll, and disburses paychecks to the employees.

A

Payroll System

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15
Q

These are relatively permanent items that collectively often represent the organization’s largest financial investment. Processes transactions pertaining to the acquisition, maintenance, and disposal

A

Fixed Assets System

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16
Q

This involves the planning, scheduling, and control of the physical product through the manufacturing process.

A

Production System

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17
Q

Monitors the flow of cost information related to production.

A

Cost Accounting System

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18
Q

Involves processing cash sales, credit sales, and the receipt of cash following a credit sale.

A

Revenue Cycle

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19
Q

The majority of business sales are made on credit and involve tasks such as preparing sales orders, granting credit, shipping products (or the rendering of service) to the customer, billing customers, and recording the transaction in the accounts (accounts receivable, inventory, expenses, and sales).

A

Sales order Processing

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20
Q

This processing includes collecting cash, depositing cash in the bank, and recording these events in the accounts (accounts receivable and cash).

A

Cash Receipt Processing

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21
Q

These are the traditional records used in manual systems

A

Documents, Journals, and Ledgers

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22
Q

This provides evidence of an economic event and may be used to initiate transaction processing.

A

Document

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23
Q

What are the three types of documents?

A

Source documents
Product documents
Turnaround documents

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24
Q

Economic events result in some documents being created at the beginning of the transaction. These are used to capture and formalize transaction data that the transaction cycle needs for processing.

A

Source Document

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25
Q

These are the result of transaction processing rather than the triggering mechanism for the process.

A

Product Documents

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26
Q

This contains important information about a customer’s account to help the cash receipts system process the payment. These are product documents of one system that become source documents for another system.

A

Turnaround Documents

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27
Q

This is where all relevant facts about the transactions are recorded in a chronological entry

A

Journal

28
Q

Two primary types of journal

A

Special Journal and General Journal

29
Q

These are used to record specific classes of transactions that occur in high volume.

A

Special Journal

30
Q

This is often used to denote certain types of special journals. Also used to denote a log.

A

Register

31
Q

Use to record nonrecurring, infrequent, and dissimilar transactions.

A

General Journal

32
Q

A special source document that contains a single journal entry specifying the general ledger accounts that are affected. These are used to record summaries of routine transactions, nonroutine transactions, adjusting entries, and closing entries.

A

Journal Voucher

33
Q

A book of accounts that reflects the financial effects of the firm’s transactions after they are posted in various journals. Show activity by account type.

A

Ledger

34
Q

Two basic types of Ledger

A

General Ledger and Subsidiary Ledger

35
Q

Contain the firm’s account information in the form of highly summarized control accounts.

A

General Ledger

36
Q

Contain the details of the individual accounts that constitute a particular control account.

A

Subsidiary Ledger

37
Q

The accounting records trace transactions from source documents to the financial statements.

A

Audit Trail

38
Q

The procedure of contacting selected customers to determine if the transactions recorded in the accounts actually took place.

A

Confirmation

39
Q

Accounting records in a computer-based system represent four different types of magnetic files, what are these?

A

Master File- generally contains account data, updated from transactions.
Transaction File- a temporary file of transaction records used to change or update data in a master file.
Reference File- stores data that are used as standards for processing transactions.
Archive File- contains records of past transactions that are retained for future reference.

40
Q

Five basic documentation techniques

A

Data Flow Diagrams, Entity Relationship Diagrams, System Flowcharts, Program Flowcharts, and Record layout Diagrams

41
Q

Uses symbols to represent the entities, processes, data flows, and data stores that pertain to a system.

A

Data Flow Diagrams (DFD)

42
Q

A documentation technique used to represent the relationship between entities

A

Entity Relationship (ER) Diagram

43
Q

These are physical resources, events, and agents that which organization wishes to capture data.

A

Entities

44
Q

The degree of the relationship; numeric mapping between two entities. Maximum number of records in one file

A

Cardinality

45
Q

This is the blueprint for what ultimately will become the physical database.

A

Data model

46
Q

T/F
I. DFD is a model of system processes
II. ER diagram models the data used in or affected by the transaction
III. The two diagrams are related through data
IV. Each data store in the DFD doesn’t represent a corresponding data entity in the ER diagram

a. I, II, III are true, IV false
b. I and III are true, and II and IV are false
c. All of the statements are true
d. All of the statements are false

A

B. I and III are true, and II and IV are false.
DFD is a model of system processes and ER diagram models the data used in or affected by the SYSTEM. The two diagrams are related through data and each data stored in the DFD REPRESENTS a corresponding data entity in the ER diagram

47
Q

The graphical representation of the physical relationships among key elements of a system.

A

System Flowchart

48
Q

Which of the following are the key elements of a system?
a. Organizational Departments
b. Manual Activities
c. Computer Programs
d. Hard-copy accounting records
e. Digital records
f. All of the above

A

F. All of the above

49
Q

These are used to reveal the internal structure of the records that constitute a file or database table.

A

Record Layout Diagrams

50
Q

The layout diagram comprises of

A

Name, Data Type, and Length of each attribute

51
Q

Classes of Computer-based accounting systems/ Data Processing Approaches used in Modern Systems

A

Batch Systems and Real-time Systems

52
Q

Assemble transactions intro groups of processing

A

Batch Systems

53
Q

Processes transactions individually at the moment the event occurs

A

Real-time Systems

54
Q

Alternative Data Processing Approaches

A

Legal Systems- configurations no longer constitute the defining features of accounting information systems (AIS), they are still of marginal importance to accountants.
Modern Systems- client-server (network)–based and processes transactions in real-time.

55
Q

This represents items in some sequential order (ascending to descending)

A

Sequential Codes

56
Q

A variation on sequential coding that partly remedies the disadvantages just described

A

Block Coding

57
Q

These are used to represent complex items or events involving two or more pieces of related data.

A

Group Codes

58
Q

These are used for many of the same purposes as numeric codes. May be assigned sequentially (in alphabetic order) or may be used in block and group coding techniques.

A

Alphabetic Codes

59
Q

These are alphabetic characters in the form of acronyms and other combinations that convey meaning.

A

Mnemonics Codes

60
Q

T/F
Processing more transactions at a lower unit cost makes batch processing more efficient than real-time systems

A

T

61
Q

T/F
The process of acquiring raw materials is part of the conversion cycle.

A

F- Expenditure Cycle

62
Q

T/F
Directing work-in-process through its various stages of manufacturing is part of the conversion cycle

A

T

63
Q

T/F
The general journal is used to record recurring transactions that are similar in nature

A

F- Non-recurring transactions

64
Q

T/F
Document flowcharts are used to represent systems at different levels of detail

A

F-

65
Q

Which system produces information use& for inventory evaluation/ budgeting/ cost control/ performance reporting/ and make-buy decisions
a. sales order processing
b.purchases accounts payable
c.cash disbursements
d. cost accounting

A

D- Cost Accounting

Accounting Information System (2 decks)

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