Unit 3 - Module 6

Question 1

Relationship of GLS to Other Information Subsystems

Answer 1

Question 2

general ledger master file

Answer 2

Principal file in the GLS database. This file is based on the organization’s published chart of accounts.

Question 3

general ledger history file

Answer 3

has the same format as the GL master. Its primary purpose is to provide historical financial data for comparative financial reports.

Question 4

journal voucher file

Answer 4

is the total collection of the journal vouchers processed in the current period. This file provides a record of all general ledger transactions and replaces the traditional general journal.

Question 5

journal voucher history file

Answer 5

File that contains journal vouchers for past periods.

Question 6

responsibility center file

Answer 6

contains the revenues, expenditures, and other resource utilization data for each responsibility center in the organization. The MRS draws upon these data for input in the preparation of responsibility reports for management.

Question 7

budget master file

Answer 7

contains budgeted amounts for revenues, expenditures, and other resources for responsibility centers. These data, in conjunction with the responsibility center file, are the basis for responsibility accounting, which is discussed later in the chapter.

Question 8

sophisticated users

Answer 8

Users of financial reports who understand the conventions and accounting principles that are applied and that the statements have information content that is useful.

Question 9

Financial Reporting Process

Answer 9

1. Capture the transaction.
2. Record in special journal.
3. Post to subsidiary ledger.
4. Post to subsidiary ledger.
5. Post to general ledger.
6. Prepare the unadjusted trial balance.
7. Prepare the unadjusted trial balance.
8. Make adjusting entries.
9. Journalize and post adjusting entries.
10. Prepare the adjusted trial balance.
11. Prepare the financial statements.
12. Journalize and post the closing entries.
13. Prepare the postclosing trial balance.

Question 10

Real-Time General Ledger and Financial Reporting System

Answer 10

Question 11

The potential risks to the FRS include the following:

Answer 11

-A defective audit trail.
-Unauthorized access to the general ledger.
-GL accounts that are out of balance with subsidiary accounts.
-Incorrect GL account balances because of unauthorized or incorrect journal vouchers.

Question 12

small data analytics

Answer 12

It characterizes techniques that employ data that are in a format and of a volume that allows them to be analyzed and acted upon by traditional technologies.

Question 13

big data analytics

Answer 13

Its current rendition is characterized and defined by three Vs: extreme volumes of data, the rapid velocity at which the data must be processed, and the wide variety of structured and unstructured data types that need to be integrated.

Question 14

data warehouse

Answer 14

Database constructed for quick searching, retrieval, ad hoc queries, and ease of use.

Question 15

data mining

Answer 15

Process of selecting, exploring, and modeling large amounts of data to uncover relationships and global patterns that exist in large databases but are hidden among the vast amount of facts.

Question 16

verification model

Answer 16

Drill-down technique to either verify or reject a user’s hypothesis.

Question 17

discovery model

Answer 17

Model that uses data mining to discover previously unknown but important information that is hidden within the data.

Question 18

Volume

Answer 18

It refers to terabytes, petabytes, and even exabytes of data.

Question 19

Velocity

Answer 19

It refers to the speed at which big data must be analyzed.

Question 20

variety

Answer 20

It is the primary driver of volume.

Question 21

Prescriptive analytics

Answer 21

It tells the user what actions should be taken in response to specific questions.

Question 22

Predictive analytics

Answer 22

It encompasses a variety of statistical techniques that draw upon current and past data to calculate the statistical likelihood of future scenarios occurring.

Question 23

Descriptive analytics

Answer 23

It is a mathematical process that describes real-world events and the relationships between factors responsible for them.

Question 24

Diagnostic analytics

Answer 24

These techniques view past performance to determine why something happened the way it did.

Question 25

What type of data is found in the general ledger master file?

balances for each account in the chart of accounts
subsidiary details supporting a control account
budget records for each account in the chart of accounts
a chronological record of all transactions

Answer 25

budget records for each account in the chart of accounts

The correct answer is “balances for each account in the chart of accounts.” Balances for each account in the chart of accounts are found in the general ledger master file. The text describes the general ledger file as the information hub for the accounting system. Each record in the general ledger master file corresponds with one of the accounts in the chart of accounts. Each record is either a GL Master account (i.e., Sales) or a control account (i.e. Accounts Receivables control)

Question 26

Which report is an output of the financial reporting system (FRS)?

comparative balance sheet
variance analysis report
item master report
customer report

Answer 26

comparative balance sheet

The correct answer is “comparative balance sheet.” A comparative balance sheet is an output of the financial reporting system. The law requires that corporations generate a series of financial reports – Income Statement, Balance Sheet, Statement of Cash Flows, Tax Returns, and others. This requirement is met by the financial reporting system.

Question 27

A characteristic of the management reporting system (MRS) is

-that it operates in conformity with generally accepted accounting principles.
-that it focuses on internal decision-making information.
-that it implements SEC requirements.
-that it is a legal requirement that the MRS be installed and functioning properly.

Answer 27

-that it focuses on internal decision-making information.

The correct answer is “that it focuses on internal decision-making information.” The management reporting system (MRS) focuses on internal decision-making information. The MRS is the source for reports that managers will use to analyze business performance such as variance analysis, production efficiency, sales, and purchases.

Question 28

Big data analytics are characterized by

volume, velocity, and variety of data.
verification, variance, and variety of data.
velocity, volume, and verification of data.
volume, variance, and velocity of data.

Answer 28

volume, velocity, and variety of data.

The correct answer is “volume, velocity, and variety of data.” Big data analytics are characterized by volume, velocity, and variety of data. These are referred to as the three Vs: extreme volumes of data (megabytes, terabytes, petabytes, etc.), the rapid velocity at which the data must be processed (particularly in applications involving machine learning and artificial intelligence), and the wide variety of structured and unstructured data types that need to be integrated (audio, video, external web data, social media, the financial reporting system, the management reporting system).

Question 29

What function does prescriptive analytics serve?

-It is a mathematical process that describes real world events and the relationships between factors responsible for them.
-It tells the user what actions should be taken in response to specific questions.
-It views past performance to determine why something happened the way it did.
-They are data warehousing processes.

Answer 29

-It tells the user what actions should be taken in response to specific questions.

The correct answer is “It tells the user what actions should be taken in response to specific questions.” Prescriptive analytics tells the user what actions should be taken in response to specific questions. For example, some companies use predictive analytics to optimize trade promotions. Prescriptive analytics helps them determine which campaigns to run and for which products.