Acct 384

Accounting 384 Final

Spring 2009 (250 points)

Final Spring 2009

Page 0

Name ______________________________
Section _____________________________

Please note: By taking the exam at this time, I believe you agree to the following ethical conduct:
1. You will not discuss the exam with any person until after Friday, May 8th, since some people will not take the exam
until Friday.
2. If you are taking this exam on Monday, May 4th or Tuesday, May 5th, you did not solicit information about the exam
from anyone.
3. Anyone completing the exam on Monday, May 4th, or Tuesday, May 5th may use item two as your reason for refusing
to discuss the exam, i.e., you are helping the students who take the exam on Friday, May 8th, avoid the situation of
responding that they did receive assistance.
Good luck as you finish your degree at ISU!! Enjoy your break and keep in touch!!!

Accounting 384 Final

Spring 2009 (250 points)

Name ______________________________
Section _____________________________

Multiple Choice (4 points each * 30 questions = 120 total points)

Identify the choice that best completes the statement or answers the question.
1.

An accounting information system in part consists of

A)
People, hardware and programs.
B)
Information, programs and computers.
C)
People, procedures, data, software and information technology infrastructure.
D)
Internal controls and accounting records.

2.

When two knowledgeable people acting independently each produce the same information, this
information is said to be
A) Complete
B) Relevant
C) Reliable
D) Verifiable

3.

The business owners obtain financing from outside investors, which results in an inflow of cash into the
company. This transaction is considered to be part of which cycle?
A)
the revenue cycle
B)
the payroll cycle
C)
the production cycle
D)
the financing cycle

4.

All transaction cycles feed information directly into the

A)
financial statements.
B)
governmental reports.
C)
general ledger and reporting system.
D)
financing operations.

5.

The narratives, diagrams, charts, and other written materials that explain how a system works are
collectively called
A)
documentation.
B)
data flows.
C)
flowcharts.
D)
schema.

6.

SAS No. 94 requires that independent auditors be able to

A)
draw computerized flowcharts.
B)
prepare flowcharts and decision tables before conducting an audit.
C)
understand a client's system of internal controls before conducting an audit.
D)
prepare and understand any type of system documentation.

7.

Separating the logical and physical views in a database allows the programmers to concentrate on
coding the application logic
A)
by identifying physical location and layouts of various data items.
B)
since they do not have to focus on the physical location and layouts of various data items.
C)
by consolidating all data in one database.
D)
by providing pointers to data items regardless of physical location.

8.

The DBMS language that is used to build, initialize, and describe logical views for users is called the
A) DDL.
B) DML.
C) DQL.
D) DBA.

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________ of 32 possible points

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9.

Intentional or reckless conduct that results in materially misleading financial statements is called
A)
financial fraud.
B)
misstatement fraud.
C)
fraudulent financial reporting.
D)
audit failure fraud.

10.

There are three characteristics associated with most fraud. The characteristic that often takes more time
and effort and leaves behind more evidence than other types of fraud is called
A)
theft.
B)
conversion.
C)
concealment.
D)
embezzlement.

11.

Which of the following is accomplished by corrective controls?

A)
identify the cause of the problem
B)
correct the resulting errors
C)
modify the system to prevent future occurrences of the problem
D)
All of the above are accomplished by corrective controls.

12.

Verifying the identity of the person or device attempting to access the system is
A)
Authentication
B)
Authorization
C)
Identification
D)
Threat monitoring

13.

Which of the following is an example of a detective control?

A)
Physical access controls
B)
Encryption
C)
Log analysis
D)
Emergency response teams

14.

This determines if all required data items have been entered.

A)
Completeness check
B)
Field check
C)
Limit check
D)
Range check

15.

Which characteristics below is not a characteristic of auditing?

A)
evidence collection
B)
establishing audit criteria
C)
objectivity
D)
systems development

16.

During the sales order entry process, a ________ is performed to compare the quantity ordered with the
standard amounts normally ordered.
A)
completeness test
B)
redundant data check
C)
field check
D)
reasonableness test

17.

The maximum allowable account balance for a given customer is called the
A)
credit checkpoint.
B)
credit limit.
C)
reorder point.
D)
backorder point.

18.

There are three basic activities in the expenditure cycle. One of the basic activities is the receiving and
storage of goods, supplies, and services. What is the counterpart of this activity in the revenue cycle?
A)
the sales order entry process
B)
the shipping function
C)
the cash collection activity
D)
the cash payments activity

19.

When goods are being ordered from a vendor, which electronic files are either read or updated?
A)
inventory, vendors, and accounts payable
B)
vendors and accounts payable
C)
open purchase orders and accounts payable
D)
inventory, vendors, and open purchase orders
________ of 44 possible points

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20.

Which area provides information to the system about hiring, terminations, and pay rate changes?
A)
payroll
B)
timekeeping
C)
purchasing
D)
human resources

21.

Payroll is one AIS application that is processed in ________ mode.

A) sequential
B) batch
C) real time
D) safe

22.

The general ledger and reporting system is designed to provide information for which of the following
user groups?
A)
internal users
B)
external users
C)
inquiry processing by internal or external users
D)
all of the above

23.

Adjusting entries that reflect events that have already occurred but for which no cash flow has taken
place and not previously entered into the accounts are called
A)
accruals.
B)
deferrals.
C)
revaluations.
D)
corrections.

24.

An entity-relationship diagram (E-R) is useful because it shows the various entities being modeled and
the important relationships among them. Anything about which the organization wants to collect and
store information is called
A)
a data model.
B)
an entity.
C)
a schema.
D)
a tuple.

25.

Events are generally linked to at least two

A) Agents
B) Entities

C) Events

D) Resources

26.

The primary key for M:N relationship tables

A)
Is a single attribute
B)
Always consists of two attributes
C)
Is the primary key of the most important entity linked to that relationship
D)
Is impossible to determine

27.

Which table is most likely to have a concatenated key?

A)
customer
B)
sales
C)
customer-sales
D)
none of the above

28.

One step in the systems development life cycle (SDLC) identifies the requirements users would like to
see in the new system. This step is called
A)
conceptual design.
B)
implementation and conversion.
C)
physical design.
D)
systems analysis.

________ of 36 possible points

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29.

Since the introduction of the computer, there has been an astronomical demand for information systems.
Such demand has resulted in many users becoming involved in the hands-on development, control, and
employment of information systems. What term is used to refer to this phenomenon?
A)
amateur user computing (AUC)
B)
competitive intra-organization systems development approach (CIOSDA)
C)
end-user computing (EUC)
D)
novice information systems development (NISD)

30.

A company wishes to introduce and test a new AIS at a branch location before company-wide adoption.
This approach is called
A)
direct conversion.
B)
parallel conversion.
C)
phase-in conversion.
D)
pilot conversion.

________ of 8 possible points

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31.

Final Spring 2009

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Four flow charts for selected revenue processes for Welcome Spring, Inc. have been provided for the
following descriptions: Identify the mistake(s) in each flow chart. (4 points each, 16 points total)
a.

The marketing systems updates customer master file stored on magnetic tape nightly with all
customer changes stored on magnetic disk.

Update
Customer
Master File

Customer
Changes

b.

Customer
Master
File

Sales clerks input customer orders received via postal mail into the computer and file the original
order in alphabetical order by customer.

Sales
Order

Input

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c.

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The accounting clerk manually prepares the invoice based on the sales order and shipping report.
Sales
Order

Match
Sales Order
And Shipping
Report

Invoice

Shipping
Report
Customer

d.
The sales program updates the Accounts Receivable master file stored on magnetic disk with
cash receipts transaction file stored on magnetic disk and generates a Summary Accounts Receivable
report (in paper format) that is forwarded to the CEO.

Cash
Receipts
Tran file

Update
Cash Receipt
Master File

Accounts
Receivable
Master
file

Summary Accounts
Receivable Report

CEO

________ of 16 possible points

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32. Cyclone Garden Shop Inc. sells cardinal and gold flowers to its customers throughout the Midwest. Each
spring, Cyclone Garden Shop prepares a request for bid for cardinal and gold roses to be delivered
during Iowa State graduation week. The Purchasing Department sends the request to several vendors and
selects the vendor with the lowest price. Next, the Purchasing Department prepares a purchase order for
these roses requesting that all roses be delivered before graduation and forwards it via email to the
vendor. Last year, Cyclone Garden Shop used Hawkeye Beauty Flowers Supply as its vendor.
Unfortunately, Hawkeye Beauty Flowers Supply delivered the roses two weeks late.
When the roses are received, the Warehouse Department inspects the flowers, notes the receipt date, and
prepares a receiving report. The flowers are then forwarded to the appropriate retail locations within
Ames. The accounting department matches the receiving report to the invoice before each cash
disbursement. The cash disbursements are mailed to vendors weekly. The expenditure cycle generates
Flower Inventory reports and Cash Disbursement reports weekly which are forwarded to Cy Cyclone,
President of Cyclone Garden Shop.
REQUIRED:
a.

Prepare a context data-flow diagram for current expenditure system at Cyclone Garden Shop,
Inc. (8 points).

b. List the processes to include in a zero level DFD for the current expenditure system at Cyclone
Garden Shop, Inc. (4 points).

________ of 12 possible points

Purchase Line Items
________ of 12 possible points

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Use the following expenditure information for Brices Magic Basketball Inc. to answer
questions 33 to 37.
Table
Inventory
Cash
PurchaseOrder
ReceiveGoods
CashPayment
Employee
PurchaseRequest
Vendor
Inventory-PurchaseOrder
Inventory-ReceiveGoods
33.

Attributes
ProductWeight, ReorderPoint, ProductNumber, Description, UnitCost,
UnitPrice, QuantityOnHand
BankID, Balance, AccountNumber
VendorNumber, EmployeeNumber, Terms, PurchaseOrderNumber,
OrderDate, ,
WarehouseClerkNumber, VendorNumber, AmountDue,
ReceivingReportNumber, PurchaseOrderNumber, ReceiptDate
VendorNumber, EmployeeNumber, AccountNumber, CheckNumber,
CheckDate, CheckAmount, ReceivingReportNumber
EmployeeName, DateHired, BirthDate, EmployeeNumber, Salary,
ManagerNumber
EmployeeName, RequestDate, PurchaseRequestNumber,
ProductNumber, QuantityNeeded
VendorName, Street, City, State, Zip, VendorNumber, VendorPhone
ActualPurchasePrice, OrderQuantity, ProductNumber,
PurchaseOrderNumber
QuantityReceived, ProductNumber, ReceivingReportNumber,

Identify the best primary key(s) for each table. (4 points)

Inventory
Inventory-PurchaseOrder
CashPayment
Vendor
PurchaseOrder
Inventory-ReceiveGoods
ReceiveGoods

_________________________
_________________________
_________________________
_________________________
_________________________
_________________________
_________________________

________ of 4 possible points

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34.

Draw the segment of the REA from which the tables were created from. Be sure to add the minimum
and maximum cardinalities. (12 points)

35.

Write a query to calculate the total amount of all cash paid in April 2009 (hint: April has 30 days). (7
points)

36.

Given the recently improved men and womens basketball teams, write a query to identify the total
number of brown basketballs ordered by Brices Magic Basketball Inc. from vendors in Iowa City, Iowa
in April 2009. Brices Magic Basketball Inc. plans to paint these balls cardinal and gold this summer and
have them ready to sell in local stores by fall. (hint: April has 30 days). Include vendor name in your
results. Assume inventory description is brown basketballs. (7 points)

37. Write a query to identify the cash payment date for each purchase order placed to vendors from
Zenorville, Iowa on March 1, 2009 for purple paint. (7 points). Be sure to list the purchase order
number, vendor number, and vendor name for each cash payment date. Also, assume product description
is purple paint.

________ of 33 possible points

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38.

Explain how one converts a many to many relationship on a REA diagram to the actual physical
database. (7 points)

39.

Describe two advantages of using XBRL to furnish financial statements to the Securities Exchange
Commission. (7 points)

40.

Describe two internal controls to reduce the probability that a company will hire unqualified employees.
(7 points)

41.

Briefly describe the three components of the fraud triangle. (7 points)

________ of 28 possible points

________ of 25 possible points

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43.

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Identify the business rules diagrammed in the following REA segments for the sales transaction cycle
for Cyclone Graduation Caps and Gowns Inc. (16 points)
a.

Cash
Receipt

Employee

Inventory

Sales Order

b.

________ of 8 possible points

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c.

Ship Goods

Cash
Receipt

d.

Sales Order

Ship Goods

________ of 16 possible points

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44.

Describe the resources and agents involved in the cash receipt event in the financing cycle. (7 points)

45.

Describe the difference between a sign check and field check. (7 points)

46.

Describe two of the four symbols used in DFDs. (7 points)

________ of 21 possible points