Topic 1.2 Overview of Transaction Processing and Enterprise Resource Planning Systems

Question 1

What is the data processing cycle

Answer 1

Data input - data processing - information output

And data store

Question 2

Steps in data input are

Answer 2

• Capture transaction data triggered by a business activity (event)
• make sure data capture is accurate and complete
• ensure company policies are followed (e.g approval of transaction)

Question 3

What is data capture

Answer 3

Information collected for an activity includes:

• Activity of interest
• Resources affected
• People who participate in the activity

Information comes from source documents

Question 4

What are source documents

Answer 4

Paper source documents (invoice)
Electronic documents (email invoice)
Turnaround documents (cheques)

Question 5

Where is data stored

Answer 5

Chart of accounts
Transaction journals
Subsidiary ledger
General ledger

Question 6

What are sequence codes

Answer 6

Items numbered consecutively to account for all items

Question 7

What are block codes

Answer 7

Blocks of codes reserved for specific categories. E.g product starting with 2 is a fridge

Question 8

What are group codes

Answer 8

Two or more subgroups of digits to code items e.g 420 repairs 100 workshop
420100 repairs workshop

Question 9

What are Mnemonic codes

Answer 9

Letters and numbers inter spread to identify an item

Question 10

Describe the elements of computer based storage

Answer 10

Entity - person , place or a thing
Attribute - facts about the entity, e.g name
Fields - where attributes are stored
Records - group of related attributes about an entity
File - group of related records
Data value - value of a field

Question 11

What are the four steps of data processing

Answer 11

CRUD
C- creating new records e.g adding customer
R - reading existing data
U -updating pervious record or data
D -deleting data

Data processing can be batch processed at the end of each day or real time processed. As the transaction happens

Question 12

What is an ERP system

Answer 12

Inter grates activities from the entire organisation

• revenue cycle
• expenditure cycle
• production cycle
• payroll cycle
• general ledger and reporting system

Question 13

Advantages of ERP System

Answer 13

• Integrated enterprise wide single view of the organisation’s data which streamlines the flow of information
• data captured once (I.e no longer need sales to enter data about a customer and then accounting to enter same customer name for invoicing)
• greater visibility and monitoring capabilities for management
• improve access to control of the data through security settings
• standardisation of procedures and reports
• improves customer service
• increase productivity through automation

Question 14

Disadvantages of ERP system

Answer 14

• costly
• significant amount of time to implement
• customising or standardising a business process
• complexity
• user resistance ( learning new things can sometimes be hard for people)

Question 15

Many small businesses choose to outsource their payroll activities to firms that specialize in providing payroll services. Dolores Yu operates a payroll processing business in Calabasas, California. When she sends bills out to her clients, her work is part of her firm’s

Answer 15

Revenue cycle

Question 16

The data processing method used by FedEx to track packages is an example of

Answer 16

Real time processing

Question 17

What is the final step in the data processing cycle?

Answer 17

Output

Question 18

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

Answer 18

selecting the best supplier by comparing bids.

Question 19

What is an example of an ERP

Answer 19

Microsoft
Sap
Oracle

Question 20

What is the second step in the data processing cycle?

Answer 20

Processing

Question 21

What does the general ledger do

Answer 21

Summaries the transactions in the journals

Question 22

John Pablo works in the accounting department of a multinational manufacturing company. His job includes updating accounts payable based on purchase orders and checks. His responsibilities are part of the company’s

Answer 22

Expenditure cycle

Question 23

Catarina Boards is a skateboard retailer located in Pueblo, New Mexico. Catarina Boards is a sole proprietorship that stocks an inventory of between 30 and 50 different skateboards. Inventory is updated in real time by the AIS. If Catarina wishes to keep detailed information about the purchase price of each skateboard in a place outside of the general ledger, it might use a

Answer 23

Transaction file

Question 24

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

Answer 24

Revenue cycle

Question 25

One way ERP vendors help to make the configuration process easier for their customers is to

Answer 25

develop built-in configuration tools to address most of their customers’ needs for system changes.

Question 26

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

Answer 26

Purchase to pay

Question 27

The quality assurance department at a large manufacturing business enters data into the AIS that is used to produce a weekly report that summarizes the proportion of defective units in each product line. This is an example of

Answer 27

Internal non financial information

Question 28

The Cape Fear Rocket Club heads out to the dunes of Cape Fear, Oregon every August to pierce the sky with their fiery projectiles. An enterprising seller of t-shirts has devised a series of designs that capture the spirit of the event in silk-screened splendor. His employees can be found on many of the major intersections selling his products out of the backs of pickup trucks. What is the best way for this business to ensure that sales data entry is efficient and accurate?

Answer 28

Sequently numbered forms

Question 29

The efficiency of recording numerous business transactions can be best improved by the use of

Answer 29

Specialised journals

Question 30

What does a specialized journal do

Answer 30

simplifies the process of recording large numbers of repetitive transactions.

Question 31

In an ERP system, the module used to record marketing data is called

Answer 31

Customer relationship management

Question 32

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

Answer 32

Order to cash

Question 33

Documents that are sent to customers or suppliers and then sent back to the company in the course of a business transaction are known as

Answer 33

Turnaround documents