Chapter 3

Question 1

Master Files

Answer 1

Contain the balance or status of entities

Question 2

Transaction Files

Answer 2

Contain activity data

Question 3

History or Archive Files

Answer 3

Contain inactive past or historical data

Question 4

Reference Files

Answer 4

Contain information needed for reference purposes

Question 5

Suspense Files

Answer 5

Contain items awaiting action, errors, missing information

Question 6

Batch

Answer 6

Accumulates transaction data for a period of time. Then all of the transactions in the transaction file are posted to the master file in one processing run. (Tape processing is always batch)

Question 7

Online

Answer 7

Means the computer-input device is connected to the CPU so that master files are updated as transaction data are entered

Question 8

Real-time

Answer 8

Denotes immediate response to an information user; transaction data are entered and processed to update the relevant master files and a response is provided to the person conducting the business event fast enough to affect the outcome of the event

Question 9

Report-time

Answer 9

The data used to generate the requested report is processed as the report is created

Question 10

Which internal document communicates the need for a journal entry to decrease the enterprise’s accounts payable for a supplier to whom the enterprise has returned merchandise?

Answer 10

Debit memorandum

Question 11

A rectangle symbol on a system flowchart represents what?

Answer 11

A computer process

Question 12

What internal document communicates to the enterprise purchasing function a department’s identified need for goods or services

Answer 12

Purchase requisition

Question 13

Which document is typically the portion of a customer statement that says “return this stub with payment”?

Answer 13

Remittance advice

Question 14

The purpose of task level modeling in the REA ontology is to…

Answer 14

Represent the specific workflow activities that combine to form events in a business process, and to document the flow of data through an enterprise

Question 15

Which document indicates transfer of custody of goods from the enterprise to a common carrier such as UPS or Federal Express?

Answer 15

Bill of lading

Question 16

System flowcharts consist of what three simple graphical elements that are combined to represent various types of physical information flows and processes?

Answer 16

Symbols, flow lines, and areas of responsibility

Question 17

Which document reflects the terms of a mutual commitment event in which the enterprise agrees to transfer title of goods to a customer at an agreed upon future time and price and the customer agrees to pay for those goods?

Answer 17

Sale order

Question 18

What is the primary document prepared by the enterprise in conjunction with the economic increment event in the acquisition/payment process?

Answer 18

Receiving report

Question 19

Which document identifies goods taken off the shelf in the warehouse and made available to be packed?

Answer 19

Picking slip

Question 20

Which edit check compares entered data to predetermined acceptable upper and lower limits?

Answer 20

Range check

Question 21

A formula applied to an account number, part number, or similar standard number is used to calculate what?

Answer 21

Check digit

Question 22

Use of one customer’s payment to pay off another customer’s account receivable is part of a fraud scheme known as…

Answer 22

Lapping

Question 23

The materiality of risk is a function of…

Answer 23

The likelihood of loss, and the size of potential loss and its impact on achieving the enterprise’s objectives

Question 24

What is collusion?

Answer 24

Two or more employees acting together to conspire in a fraud

Question 25

Which of these is an economy risk?

Answer 25

Downturn in the financial markets

Question 26

Bonding is primarily what type of control?

Answer 26

Corrective

Question 27

Which type of control focuses primarily on ensuring that errors or irregularities cannot happen?

Answer 27

Preventive

Question 28

Which risks are associated primarily with the recording, maintaining, and reporting information about resources, events, agents, and relationships among them?

Answer 28

Information process risks

Question 29

Which is an example of an enterprise risk? (as opposed to economy risk, industry risk, business process risk, or information process risk)

Answer 29

A merger with or acquisition of another enterprise