a. attribute, record, file.

b. record, attribute, key.

1. Which of the following is NOT a financial c. file, record, attribute.
transaction? d. file, record, key.
a. purchase of products e. key, record, file.
b. cash receipts
c. update valid vendor file 8. Which is NOT an accountant’s primary role in
d. sale of inventory information systems?
a. system user
2. The following are subsystems of the Accounting b. system auditor
Information System, EXCEPT c. system designer
a. Transaction Processing System. d. system programmer
b. Human Resources System.
c. General Ledger/Financial Reporting System. 9. Which of the following is NOT an objective of all
d. Management Reporting System. information systems?
a. support for the stewardship function of
3. Which of the following is NOT a purpose of the management
Transaction Processing System? b. support for management decision making
a. managing and reporting on the status of financial c. support for the day-to-day operations of the firm
investments d. all of the above are objectives
b. converting economic events into financial
transactions 10. Which of the following best describes the activities
c. distributing essential information to operations of the materials management function?
personnel to support their daily operations a. purchasing, receiving, and inventory control
d. recording financial transactions in the accounting b. receiving, sales, distribution, and purchasing
records c. receiving, storage, purchasing, and accounts
payable
4. The objectives of the data collection activity of d. purchasing, receiving, and storage
the general model for AIS are to collect data that are: e. purchasing, storage, and distribution
a. relevant and redundant.
b. efficient and objective. 11. Which of the following best describes the activities
c. efficient and redundant. of the production function?
d. efficient and relevant. a. maintenance, inventory control, and production
planning
5. Which of the following is NOT a characteristic of b. production planning, quality control, manufacturing,
effective information? and cost accounting
a. relevance c. quality control, production planning, manufacturing,
b. accuracy and payroll
c. summarization d. maintenance, production planning, storage, and
d. precision quality control
e. manufacturing, quality control, and maintenance
6. Which of the following is NOT a database
management task? 12. Which of the following best describes the activities
a. retrieval of the accounting function?
b. storage a. inventory control, accounts payable, fixed
c. summarization assets, and payroll
d. deletion b. fixed assets, accounts payable, cash
disbursements, and cost accounting
7. When viewed from the highest to most elemental c. purchasing, cash receipts, accounts payable,
level, the data hierarchy is cash disbursements, and payroll
d. inventory control, cash receipts, accounts
payable, cash disbursements, and payroll
e. inventory control, cost accounting, 1. Which statement is NOT true?
accounts payable, cash disbursements, and a. Business activities begin with the acquisition of
payroll materials, property, and labor in exchange for
cash.
13. Which statement best describes the issue of b. The conversion cycle includes the task of
distributed data processing (DDP)? determining raw materials requirements.
a. The centralized and DDP approaches are c. Manufacturing firms have a conversion cycle but
mutually exclusive; an organization must retail firms do not.
choose one approach or the other. d. A payroll check is an example of a product
b. The philosophy and objective of the organization’s document of the payroll system.
management will determine the extent of DDP in the e. A journal voucher is actually a special source
firm. document.
c. In a minimum DDP arrangement, only data
input and output are distributed, leaving the 2. A documentation tool that depicts the physical
tasks of data control, data conversion, database flow of information relating to a particular transaction
management, and data processing to be centrally through an organization is a
managed. a. system flowchart.
d. The greatest disadvantage of a totally distributed b. program flowchart.
environment is that the distributed information c. decision table.
processing unit locations are unable to communicate d. work distribution analysis.
and coordinate their activities. e. systems survey.
e. Although hardware (such as computers,
database storage, and input/output terminals) 3. Sequential file processing will not permit
can be effectively distributed, the systems a. data to be edited on a separate computer run.
development and maintenance tasks must b. the use of a database structure.
remain centralized for better control and c. data to be edited in an offline mode.
efficiency. d. batch processing to be initiated from a terminal.
e. data to be edited on a real-time basis.
14. Which of the following is a disadvantage of
distributed data processing? 4. The production subsystem of the conversion cycle
a. End-user involvement in systems operation is includes all of the following EXCEPT
decreased. a. determining raw materials requirements.
b. Disruptions due to mainframe failures are b. make or buy decisions on component parts.
increased. c. release of raw materials into production.
c. The potential for hardware and software d. scheduling the goods to be produced.
incompatibility across the organization is
increased. 5. Which of the following files is a temporary file?
d. The time between project request and completion is a. transaction file
increased. b. master file
e. All of the above are disadvantages. c. reference file
d. none of the above

6. A documentation tool used to represent the logical

elements of a system is a(n)
a. programming flowchart.
b. entity relationship diagram.
c. system flowchart.
d. data flow diagram.
 b. pointers are used to indicate the location of all
7. Which of the following is NOT an advantage of records.
real-time processing files over batch processing? c. pointers are used to indicate location of a record
a. shorter transaction processing time d. all locations on the disk are used for record
b. reduction of inventory stocks storage.
c. improved customer service
d. all are advantages 13. An advantage of a physical address pointer is that
a. it points directly to the actual disk storage location.
8. Which statement is NOT correct? b. it is easily recovered if it is inadvertently lost.
a. Legacy systems may process financially significant c. it remains unchanged when disks are reorganized.
transactions. d. all of the above are advantages of the physical
b. Some legacy systems use database technology. address pointer.
c. Mainframes are exclusive to legacy systems,
while modern systems use only the client server 14. Which of the following is NOT true of a turnaround
model. document?
d. All the above are true. a. They may reduce the number of errors made
by external parties.
9. Which statement is NOT correct? b. They are commonly used by utility companies
a. Indexed random files are dispersed throughout (gas, power, water).
the storage device without regard for physical c. They are documents used by internal parties only.
proximity with related records. d. They are both input and output documents.
b. Indexed random files use disk storage space
efficiently. 15. Which of the following is NOT a true statement?
c. Indexed random files are efficient when a. Transactions are recorded on source documents
processing a large portion of a file at one time. and are posted to journals.
d. Indexed random files are easy to maintain in terms b. Transactions are recorded in journals and are
of adding records. posted to ledgers.
c. Infrequent transactions are recorded in the
10. Which statement is NOT correct? The indexed general journal.
sequential access method d. Frequent transactions are recorded in special
a. is used for very large files that need both direct journals.
access and batch processing.
b. may use an overflow area for records. 16. Which of the following is true of the relationship
c. provides an exact physical address for each between subsidiary ledgers and general ledger
record. accounts?
d. is appropriate for files that require few insertions or a. The two contain different and unrelated data.
deletions. b. All general ledger accounts have subsidiaries.
c. The relationship between the two provides an audit
11. Which statement is true about a hashing trail from the financial statements to the source
structure? documents.
a. The same address could be calculated for two d. The total of subsidiary ledger accounts usually
records. exceeds the total in the related general ledger
b. Storage space is used efficiently. account.
c. Records cannot be accessed rapidly.
d. A separate index is required. 17. Real-time systems might be appropriate for all of
the following EXCEPT
a. airline reservations.
b. payroll.
12. In a hashing structure c. point-of-sale transactions.
a. two records can be stored at the same address. d. air traffic control systems.
e. all of these applications typically utilize real time
processing.
1. Management can expect various benefits to follow
18. Is the system flowchart symbol for: from implementing a system of strong internal control.
a. on-page connector. Which of the following benefits is least likely to occur?
b. off-page connector. a. reduction of cost of an external audit
c. home base. b. prevention of employee collusion to commit fraud
d. manual operation. c. availability of reliable data for decision-making
e. document. purposes
d. some assurance of compliance with the Foreign
19. A chart of accounts would best be coded using Corrupt Practices Act of 1977
a(n) ______________ coding scheme. e. some assurance that important documents and
a. alphabetic records are protected
b. mnemonic
c. block 2. Which of the following situations is NOT a
d. sequential segregation of duties violation?
a. The treasurer has the authority to sign checks
20. Which of the following statements is NOT true? but gives the signature block to the assistant
a. Sorting records that are coded alphabetically treasurer to run the check-signing machine.
tends to be more difficult for users than sorting b. The warehouse clerk, who has custodial
numeric sequences. responsibility over inventory in the warehouse,
b. Mnemonic coding requires the user to memorize selects the vendor and authorizes purchases
codes. when inventories are low.
c. Sequential codes carry no information content c. The sales manager has the responsibility to
beyond their order in the sequence. approve credit and the authority to write off
d. Mnemonic codes are limited in their ability to accounts.
represent items within a class. d. The department time clerk is given the undistributed
payroll checks to mail to absent
21. A coding scheme in the form of acronyms and employees.
other combinations that convey meaning is a(n) e. The accounting clerk who shares the recordkeeping
a. sequential code. responsibility for the accounts receivable subsidiary
b. block code. ledger performs the monthly reconciliation of the
c. alphabetic code. subsidiary ledger and the control account.
d. mnemonic code.
3. The underlying assumption of reasonable
assurance regarding implementation of internal
control means that
a. auditor is reasonably assured that fraud has not
occurred in the period.
b. auditors are reasonably assured that employee
carelessness can weaken an internal control
structure.
c. implementation of the control procedure should not
have a significant adverse effect on
efficiency or profitability.
d. management assertions about control effectiveness
should provide auditors with reasonable assurance.
e. a control applies reasonably well to all forms of
computer technology.
4. To conceal the theft of cash receipts from a. ethics
customers in payment of their accounts, which of the b. justifiable reliance
following journal entries should the bookkeeper c. situational pressure
make? d. opportunity
DR CR
a. Miscellaneous Expense Cash 10. The fraud scheme that is similar to the ‘‘borrowing
b. Petty Cash Cash from Peter to pay Paul’’ scheme is
c. Cash Accounts Receivable a. expense account fraud.
d. Sales Returns Accounts Receivable b. bribery.
e. None of the above c. lapping.
d. transaction fraud.
5. Which of the following controls would best prevent
the lapping of accounts receivable?
a. Segregate duties so that the clerk responsible
for recording in the accounts receivable subsidiary
ledger has no access to the general ledger.
b. Request that customers review their monthly 1. Which document is NOT prepared by the sales
statements and report any unrecorded cash department?
payments. a. packing slip
c. Require customers to send payments directly b. shipping notice
to the company’s bank. c. bill of lading
d. Request that customers make checks payable d. stock release
to the company.
2. Which document triggers the update of the
6. Providing timely information about transactions in inventory subsidiary ledger?
sufficient detail to permit proper classification and a. bill of lading
financial reporting is an example of: b. stock release
a. the control environment. c. sales order
b. risk assessment. d. shipping notice
c. information and communication.
d. monitoring. 3. Which function should the billing department
NOT perform?
7. Ensuring that all material transactions processed by a. record the sales in the sales journal
the information system are valid and in accordance b. send the ledger copy of the sales order to
with management’s objectives is an example of accounts receivable
a. transaction authorization. c. send the stock release document and the shipping
b. supervision. notice to the billing department as proof
c. accounting records. of shipment
d. independent verification. d. send the stock release document to inventory
control
4. When will a credit check approval most likely
8. Which of the following is often called a require specific authorization by the credit
compensating control? department?
a. transaction authorization a. when verifying that the current transaction does not
b. supervision exceed the customer’s credit limit
c. accounting records b. when verifying that the current transaction is with a
d. independent verification valid customer
c. when a valid customer places a materially large
9. Which of the following is NOT an element of the order
fraud triangle? d. when a valid customer returns goods
5. Which type of control is considered a compensating
control?
a. segregation of duties 1. Which document helps to ensure that the receiving
b. access control clerks actually count the number of goods received?
c. supervision a. packing list
b. blind copy of purchase order
d. accounting records
c. shipping notice
d. invoice
6. Which of the following is NOT an independent
verification control? 2. When the goods are received and the receiving
a. The shipping department verifies that the goods report has been prepared, which ledger may be
sent from the warehouse are correct in type and updated?
quantity. a. standard cost inventory ledger
b. inventory subsidiary ledger
b. General ledger clerks reconcile journal vouchers
c. general ledger
that were independently prepared in various d. accounts payable subsidiary ledger
departments.
c. The use of prenumbered sales orders. 3. Which statement is NOT correct for an
d. The billing department reconciles the shipping expenditure system with proper internal controls?
notice with the sales invoice to ensure that customers a. Cash disbursements maintain the check register.
are billed for only the quantities shipped. b. Accounts payable maintains the accounts payable
subsidiary ledger.
c. Accounts payable is responsible for paying
7. Which function or department below records the invoices.
decrease in inventory due to a sale? d. Accounts payable is responsible for authorizing
a. warehouse invoices.
b. sales department
c. billing department 4. Which duties should be segregated?
a. matching purchase requisitions, receiving
d. inventory control
reports, and invoices and authorizing payment
b. authorizing payment and maintaining the check
8. Which situation indicates a weak internal control register
structure? c. writing checks and maintaining the check
a. the AR clerk authorizes the write off of bad debts register
b. the record-keeping clerk maintains both AR and AP d. authorizing payment and maintaining the
subsidiary ledgers accounts payable subsidiary ledger
c. the inventory control clerk authorizes inventory
purchases 5. Which documents would an auditor most
d. the AR clerk prepares customer statements every likely choose to examine closely to ascertain
month that all expenditures incurred during the accounting
period have been recorded as a liability?
a. invoices
9. The bill of lading is prepared by the b. purchase orders
a. sales clerk. c. purchase requisitions
b. warehouse clerk. d. receiving reports
c. shipping clerk.
d. billing clerk. 6. Which task must still require human intervention
in an automated purchases/cash disbursements
10. Which of following functions should be system?
segregated? a. determination of inventory requirements
a. opening the mail and recording cash receipts in the b. preparation of a purchase order
journal c. preparation of a receiving report
b. authorizing credit and determining reorder d. preparation of a check register
quantities
c. shipping goods and preparing the bill of lading
d. providing information on inventory levels and
reconciling the bank statement
7. Which one of the following departments does not CHAPTER 6
have a copy of the purchase order?
a. the purchasing department 1. The document that captures the total amount of
b. the receiving department
time that individual workers spend on each production
c. accounts payable
d. general ledger job is called a
a. time card.
8. Which document typically triggers the process of b. job ticket.
recording a liability? c. personnel action form.
a. purchase requisition d. labor distribution form.
b. purchase order
c. receiving report
d. supplier’s invoice 2. An important reconciliation in the payroll system
is when
9. Which of the following tasks should the cash a. the general ledger department compares the labor
disbursement clerk NOT perform? distribution summary from cost accounting to the
a. review the supporting documents for completeness disbursement voucher from accounts payable.
and accuracy b. the personnel department compares the number
b. prepare checks
of employees authorized to receive a pay check
c. approve the liability
d. mark the supporting documents paid to the number of pay checks prepared.
c. the production department compares the number
10. Which of the following is true? of hours reported on job tickets to the number of hours
a. The cash disbursement function is part of reported on time cards.
accounts payable. d. the payroll department compares the labor
b. Cash disbursements is an independen distribution summary to the hours reported on time
accounting function.
cards.
c. Cash disbursements is a treasury function.
d. The cash disbursement function is part of the
general ledger department. 3. Which internal control is not an important part of
the payroll system?
a. supervisors verify the accuracy of employee time
cards
b. paychecks are distributed by an independent
paymaster
c. the accounts payable department verifies the
accuracy of the payroll register before transferring
payroll funds to the general checking account
d. the general ledger department reconciles the
labor distribution summary and the payroll
disbursement voucher

4. The department responsible for approving pay

rate changes is
a. payroll
b. treasurer
c. personnel
d. cash disbursements

5. Which function should distribute paychecks?

a. personnel
b. timekeeping
c. paymaster
d. payroll
6. Which transaction is not processed in the fixed
asset system?
a. purchase of building 1. Which of the following is not an advantageous
b. repair of equipment reason to reduce inventories?
c. purchase of raw materials a. Inventories provide a competitive advantage.
d. sale of company van b. Inventories can invite overproduction.
c. Inventories are expensive to maintain.
7. Depreciation d. Inventories may conceal problems.
a. is calculated by the department that uses the e. All of these are good reasons to reduce
fixed asset. inventories.
b. allocates the cost of the asset over its useful life.
c. is recorded weekly. 2. The fundamental EOQ model
d. results in book value approximating fair market a. provides for fluctuating lead times during reorder
value. cycles.
b. is relatively insensitive to errors in demand,
8. Depreciation records include all of the following procurement costs, and carrying costs.
information about fixed assets EXCEPT the c. focuses on the trade-off between production
a. economic benefit of purchasing the asset. costs and carrying costs.
b. cost of the asset. d. is stochastic in nature.
c. depreciation method being used. e. is best used in conjunction with a periodic
d. location of the asset. inventory system.

9. Which control is not a part of the fixed asset 3. Refer to the equation for the EOQ in the text.
system? Car Country, a local Ford dealer, sells 1,280
a. formal analysis of the purchase request small SUVs each year. Keeping a car on the lot
b. review of the assumptions used in the capital costs Car Country $200 per month, so the company
budgeting model prefers to order as few SUVs as is economically
c. development of an economic order quantity feasible. However, each time an order is
model placed, the company incurs total costs of $300.
d. estimates of anticipated cost savings Of this $300, $240 is fixed and $60 is variable.

10. Objectives of the fixed asset system do NOT Determine the company’s economic order
include quantity.
a. authorizing the acquisition of fixed assets. a. 8
b. recording depreciation expense. b. 16
c. computing gain and/or loss on the disposal of c. 18
fixed assets. d. 56
d. maintaining a record of the fair market value of e. 62
all fixed assets.
Questions 4 through 6 are based on the diagram
11. Which of the following is NOT a characteristic of below, which represents the EOQ model.
the fixed asset system?
a. acquisitions are routine transactions requiring 4. Which line segment represents the reorder lead
general authorization time?
b. retirements are reported on an authorized disposal a. AB
report form b. AE
c. acquisition cost is allocated over the expected c. AF
life of the asset d. BC
d. transfer of fixed assets among departments is e. AC
recorded in the fixed asset subsidiary ledger
5. Which line segment identifies the quantity of safety d. The financial orientation of standard costing
stock maintained? may promote bad decisions.
a. AB e. All of the above are problems with standard
b. AE costing.
c. AC
d. BC 10. Which one of the following statements is true?
e. EF a. ERP evolved directly from MRP.
b. ERP evolved into MRP and MRP evolved into
6. Which line segment represents the length of MRP II.
time to consume the total quantity of materials c. MRP II evolved from MRP and MRP II evolved
ordered? into ERP.
a. DE d. None of the above is true.
b. BC
c. AC
d. AE
e. AD

7. Which of the following is NOT a principle of lean

manufacturing?
a. Products are pushed from the production end
to the customer.
b. All activities that do not add value and maximize
the use of scarce resources must be eliminated.
c. Achieve high inventory turnover rate.
d. A lean manufacturing firm must have established
and cooperative relationships with vendors.
e. All of the above are lean manufacturing
principles.

8. All of the following are problems with traditional

accounting information EXCEPT:
a. Managers in a JIT setting require immediate
information.
b. The measurement principle tends to ignore
standards other than money.
c. Variance analysis may yield insignificant values.
d. The overhead component in a manufacturing
company is usually very large.
e. All of these are problems associated with
traditional accounting information.

9. Which of the following is NOT a problem

associated with standard cost accounting?
a. Standard costing motivates management to
produce large batches of products and build
inventory.
b. Applying standard costing leads to product
cost distortions in a lean environment.
c. Standard costing data are associated with
excessive time lags that reduce its usefulness.
 5. Which of the following is NOT a potential
exposure of the FRS?
1. Sequential access means that a. a defective audit trail
a. data are stored on magnetic tape. b. general ledger accounts that are out of balance
b. the address of the location of data is found through with subsidiary accounts
the use of either an algorithm or an index. c. unauthorized access to the check register
c. to read any record on the file, all of the preceding d. unauthorized access to the general ledger
records must first be read.
d. each record can be accessed in the same amount 6. Which task should the general ledger perform?
of time. a. update the general ledger
b. prepare journal vouchers
2. Which file has as its primary purpose to provide c. have custody of physical assets
historical financial data for comparative financial d. have record-keeping responsibility for special
reports? journals of subsidiary ledgers
a. journal voucher history file
b. budget master file 7. The Ozment Corporation uses a performance
c. responsibility file reporting system that shows online the data for each
d. general ledger history file subordinate who reports to a supervisor. The data
presented show the actual costs incurred during the
3. Which of the following statements is true? period, the budgeted costs, and all variances from
a. Journal vouchers detailing transaction activity flow budget for that subordinate’s department. The name
from various operational departments into the GLS, of this system of reporting is
where they are independently reconciled and posted a. contribution accounting.
to the journal voucher history file. b. responsibility accounting.
b. Journal vouchers summarizing transaction activity c. flexible budgeting.
flow from the accounting department into the GLS, d. program budgeting.
where they are independently reconciled and posted e. cost-benefit accounting.
to the general ledger accounts.
c. Journal vouchers summarizing transaction activity 8. Which of the following is not a characteristic of the
flow from various operational departments into the strategic planning process?
GLS, where they are independently reconciled and a. emphasis on both the short and long run
posted to the general ledger accounts. b. analysis of external economic factors
d. Journal vouchers summarizing transaction activity c. review of the attributes and behavior of the
flow from various operational departments into the organization’s competition
GLS, where they are independently reconciled and d. analysis and review of departmental process
posted to the journal voucher history file. e. analysis of consumer demand

4. Which of the following statements best describes a 9. The following are all output reports of the financial
computer-based GL/FRS? reporting system, EXCEPT
a. Most firms derive little additional benefit from a real- a. variance analysis report.
time FRS. b. statement of cash flows.
b. Batch processing is typically not appropriate for c. tax return.
transaction processing of GLS. d. comparative balance sheet.
c. The sequential file approach is an inefficient use of
technology. 10. Which of the following budgeting processes is
d. A batch system with direct access files recreates LEAST likely to motivate managers toward
the entire database each time the file is updated. organizational goals?
a. setting budget targets at attainable levels
b. participation by subordinates in the budgetary
process
c. use of management by exception 15. Which statement below best describes an
d. holding subordinates accountable for the items investment center?
they control a. The authority to make decisions affecting the
e. having top management set budget levels major determinants of profit, including the power
to choose its markets and sources of supply.
11. Which of the following would normally be b. The authority to make decisions affecting the
considered in a strategic plan? major determinants of profit, including the power to
a. setting a target of 12 percent return on sales choose its markets and sources of supply, and
b. maintaining the image of the company as the significant control over the amount of invested
industry leader capital.
c. setting a market price per share of stock c. The authority to make decisions over the most
outstanding significant costs of operations, including the power
d. distributing monthly reports for departmental to choose the sources of supply.
variance analysis d. The authority to provide specialized support to
e. tightening credit terms for customers to 2/10, other units within the organization.
n/30 e. The responsibility for developing markets for
and selling of the output of the organization.
12. At what level of management is the long-range
planning function most important?
a. at top management levels
b. at middle management levels
c. at lower management levels
d. for staff functions
e. for line functions

13. Which of the following is the basic purpose of a

responsibility accounting?
a. variance analysis
b. motivation
c. authority
d. budgeting
e. pricing

14. Which statement below best describes a profit

center?
a. The authority to make decisions affecting the
major determinants of profit, including the power to
choose its markets and sources of supply.
b. The authority to make decisions affecting the major
determinants of profit, including the power to choose
its markets, sources of supply, and significant control
over the amount of invested capital.
c. The authority to make decisions over the most
significant costs of operations, including the power to
choose the sources of supply.
d. The authority to provide specialized support to
other units within the organization.
e. The responsibility for combining the raw materials,
direct labor, and other factors of production into a final
product.
 5. The installation of a database management system
is likely to have the least impact on
1. The data attributes that a particular user has a. data redundancy.
permission to access are defined by the b. entity-wide sharing of common data.
a. operating system view. c. exclusive ownership of data.
b. systems design view. d. the logic needed to solve a problem in an application
c. database schema. program.
d. user view. e. the internal controls over data access.
e. application program.
6. The functions of a database administrator are a
2. The database approach has several unique database planning, data input preparation, and database
characteristics not found in traditional (flat-file) design.
systems. Which of the following statements does not b. data input preparation, database design, and database
apply to the database model? operation.
a. Database systems have data independence; c. database design, database operation, and equipment
that is, the data and the programs are maintained operations.
separately except during processing. d. database design, database implementation, and
b. Database systems contain a data-definition database planning.
language that helps describe each schema and e. database operations, database maintenance, and data
subschema. input preparation.
c. The database administrator is the part of the
software package that instructs the operating 7. A relational database system contains the following
aspects of the program when data are retrieved. inventory data: part number, description, quantity on
d. A primary goal of database systems is to minimize hand, and reorder point. These individual items are called
data redundancy. a. attributes.
e. Database systems provide increased accessibility b. relations.
to data and flexibility in its usage. c. associations.
d. occurrences.
3. One of the first steps in the creation of a relational
database is to 8. Which of the following is a characteristic of a relational
a. integrate accounting and nonfinancial data. database system?
b. plan for increased secondary storage capacity. a. All data within the system are shared by all users to
c. order data-mining software that will facilitate facilitate integration.
data retrieval. b. Database processing follows explicit links that are
d. create a data model of the key entities in the contained within the records.
system. c. User views limit access to the database.
e. construct the physical user view using SQL. d. Transaction processing and data warehousing systems
share a common database.
4. Database currency is achieved by
a. implementing partitioned databases at remote sites. 9. Partitioned databases are most effective when
b. employing data-cleansing techniques. a. users in the system need to share common data.
c. ensuring that the database is secure from b. primary users of the data are clearly identifiable.
accidental entry. c. read-only access is needed at each site.
d. an external auditor’s reconciliation of reports from d. all of the above.
multiple sites.
e. a database lockout that prevents multiple 10. Database entities
simultaneous access. a. may contain zero or many occurrences.
b. are represented as verbs in an ER diagram.
c. may represent both physical assets and intangible
phenomena.
d. are often defined by common attributes that c. program development.
also define other entities. d. database access.
e. are unique to a specific user view. e. all of these are typical DBMS features.

11. A transitive dependency 16. Which of the following is least likely to be an

a. is a database condition that is resolved through attribute of an employee table in a normalized
special monitoring software. database?
b. is a name given to one of the three anomalies a. employee name
that result from unnormalized database tables. b. employee address
c. can exist only in a table with a composite c. employee number
primary key. d. employee supervisor’s name
d. cannot exist in tables that are normalized at e. all of these would be attributes of the employee
the 2NF level. table in a normalized database.
e. is none of the above.
17. The advantages to using a partitioned database
12. A partial dependency approach include all of the following EXCEPT
a. is the result of simultaneous user requests for a. the possibility for the deadlock phenomenon is
the same data in a partitioned database environment reduced.
b. is a name given to one of the three anomalies b. user control is increased.
that result from unnormalized database tables. c. transaction processing time is decreased.
c. can exist only in a table with a composite primary d. the potential for wide-scale disaster is reduced.
key. e. these are all advantages of partitioned databases.
d. may exist in tables that are normalized at the 2NF
level. 18. Of the following, select the attribute that would be
e. is none of the above. the best primary key in an inventory table.
a. ITEM NAME
13. Repeating group data b. ITEM LOCATION
a. is a form of data redundancy common to c. ITEM COST
replicated databases in a distributed database d. ITEM NUMBER
environment. e. ITEM SUPPLIER
b. is a name given to one of the three anomalies
that result from unnormalized database tables.
c. can exist only in a table with a composite
primary key.
d. cannot exist in tables that are normalized at
the 2NF level.
e. is none of the above.

14. The database model most likely to be used in the

development of a modern (not legacy) system is
a. hierarchical
b. structured
c. relational
d. network
e. navigational

15. Typical DBMS features include all of the following

EXCEPT
a. database interface design and development.
b. backup and recovery.
 e. all of these events would be modelled

6. Which of the following associations would most

1. The concept of duality means that an REA diagram likely describe the relationship between an internal
must consist of agent and an economic event?
a. two events—one of them economic and the a. 1:M
other support. b. 1:1
b. two agents—one of them internal and the c. M:M
other external. d. 0:M
c. two resources—one increased and the other e. none of the above
decreased by the same event.
d. all of the above. 7. Which of the following tables would most likely
e. none of the above. have a composite key?
a. Take Order
2. Each economic event in an REA diagram is always b. Ship Goods
a. linked to at least two resource entities. c. Inventory-Ship Link
b. linked to two external agents. d. Cash
c. linked to two internal agents. e. none of the above
d. linked to another economic event.
e. linked to a support event. 8. Which of the following associations requires a
separate table in the database?
3. Which of the following are characteristics of a. 1:1
economic agents? b. 1:M
a. They participate in economic events, but do c. M:M
not assume control of the resources. d. all of the above
b. They participate in economic events, but not in
support events. 9. When assigning foreign keys in a 1:1 association
c. Internal agents are employees of the company a. the primary key of each table should be embedded
whose system is being modeled. as a foreign key in the related table.
d. External agents are not employees of the company b. the primary key on the 0,1 side of the relation
whose system is being modeled. should be embedded as the foreign key on the 1,1
e. All of the above describe agents. c. the primary key on the 1,1 side of the relation
should be embedded as the foreign key on the 0,1
4. Which of the following is true? side.
a. REA diagram entities are arranged in constellations d. a link table must be created to accept the foreign
by entity class. keys of both tables.
b. ER diagrams present a static picture of the e. none of the above is true.
underlying business phenomena.
c. Entity names in ER diagrams are always in the 10. When assigning foreign keys in a 1:M association
noun form. a. the primary key of each table should be embedded
d. Events entity names in REA diagrams are in the as a foreign key in the related table.
verb form. b. the primary key on the 0,M side of the relation
e. All of the above are true statements. should be embedded as the foreign key on the 1,1
side.
5. Which of the following events would be LEAST c. the primary key on the 1,1 side of the relation
likely to be modeled in an REA diagram? should be embedded as the foreign key on the 0,M
a. customer inquiries side.
b. sales to a customer d. a link table must be created to accept the foreign
c. accounts payable keys of both tables.
d. cash e. none of the above is true.
 b. Client computers are responsible for presenting
data to the user and passing user input back
1. Closed database architecture is to the server.
a. a control technique intended to prevent c. Two-tier architecture is for local area network
unauthorized access from trading partners. applications where the demand on the server is
b. a limitation inherent in traditional information restricted to a relatively small population of users.
systems that prevents data sharing. d. The database and application functions are
c. a data warehouse control that prevents unclean separated in the three-tier model.
data from entering the warehouse. e. In three-tier client-server architectures, one
d. a technique used to restrict access to data marts. tier is for user presentation, one is for database
e. a database structure that many of the leading and applications access, and the third is for Internet
ERPs use to support OLTP applications. access.

2. Each of the following is a necessary element for 6. Which statement is NOT true?
the successful warehousing of data EXCEPT a. Drill-down capability is an OLAP feature of
a. cleansing extracted data. data mining tools available to the user.
b. transforming data. b. The data warehouse should be separate from
c. modeling data. operational systems.
d. loading data. c. Denormalization of data involves dividing the
e. all of the above are necessary. data into very small tables that support detailed
analysis.
3. Which of the following is typically NOT part of an d. Some decisions supported by a data warehouse
ERP’s OLAP applications? are not fundamentally different from those that
a. decision support systems are supported by traditional databases.
b. information retrieval e. Data cleansing involves transforming data into
c. ad hoc reporting/analysis standard business terms with standard data
d. logistics values.
e. what-if analysis
7. Which statement is LEAST accurate?
4. There are a number of risks that may be associated a. Implementing an ERP system has more to do
with ERP implementation. Which of the following was with changing the way an organization does
NOT stated as a risk in the chapter? business than it does with technology.
a. A drop in firm performance after implementation b. The phased-in approach to ERP implementation
because the firm looks and works differently than it did is particularly suited to diversified organizations
while using a legacy system. whose units do not share common processes and
b. Implementing companies have found that staff data.
members, employed by ERP consulting firms, do not c. Because the primary reason for implementing
have sufficient experience in implementing new an ERP is to standardize and integrate operations,
systems. diversified organizations whose units do not share
c. Implementing firms fail to select systems that common processes and data do not benefit and tend
properly support their business activities. not to implement ERPs.
d. The selected system does not adequately meet d. To take full advantage of the ERP process,
the adopting firm’s economic growth. reengineering will need to occur.
e. ERPs are too large, complex, and generic for them e. A common reason for ERP failure is that the
to bewell integrated intomost company cultures. ERP does not support one or more important
business processes of the organization.
5. Which statement is NOT true?
a. In a typical two-tier client-server architecture, 8. SAP, one of the leading ERP producers, makes
the server handles both application and database several modules available to adopters. Which of the
duties. following is not a SAP module?
a. Business Process Support
b. Internet Development Support
c. Logistics
d. E-Commerce Support 1. Which of the following statements is correct?
e. Human Resources a. TCP/IP is the basic protocol that permits
communication between Internet sites.
9. Auditors of ERP systems b. TCP/IP controls Web browsers that access the
a. need not be concerned about segregation of Web.
duties because these systems possess strong c. TCP/IP is the document format used to produce
computer controls. Web pages.
b. focus on output controls such as independent d. TCP/IP is used to transfer text files, programs,
verification to reconcile batch totals. spread sheets, and databases across the Internet.
c. are concerned that managers fail to exercise e. TCP/IP is a low-level encryption scheme used
adequate care in assigning permissions. to secure transmissions in higher-level (HTTP)
d. do not see the data warehouse as an audit or format.
control issue at all because financial records are not
stored there. 2. Which of the following best describes a system of
e. need not review access levels granted to users computers that connects the internal users of an
because these are determined when the system organization distributed over a wide geographic
is configured and never change. area?
a. LAN
10. Which statement is most correct? b. Internet
a. SAP is more suited to service industries than c. decentralized network
manufacturing clients. d. multidrop network
b. J.D. Edwards’s ERP is designed to accept the e. intranet
best-practices modules of other vendors.
c. Oracle evolved from a human resources system. 3. Sniffer software is
d. PeopleSoft is the world’s leading supplier of a. used by malicious Web sites to sniff data from
software for information management. cookies stored on the user’s hard drive.
e. SoftBrands provides enterprise software for b. used by network administrators to analyze
the hospitality and manufacturing sectors. network traffic.
c. used by bus topology intranets to sniff for carriers
before transmitting a message to avoid data
collisions.
d. an illegal program downloaded from the Web
to sniff passwords from the encrypted data of
Internet customers.
e. illegal software for decoding encrypted messages
transmitted over a shared intranet channel.

4. Which of the following statements is true?

a. Cookies were originally intended to facilitate
advertising on the Web.
b. Cookies always contain encrypted data.
c. Cookies are text files and never contain encrypted
data.
d. Cookies contain the URLs of sites the user visits.
e. Web browsers cannot function without cookies.
5. A message that is contrived to appear to be coming collisions and prevents data loss during
from a trusted or authorized source is called transmissions.
a. a denial of service attack. d. It is more efficient than the bus or ring topologies
b. digital signature forging. because it transmits an entire file of records to the
c. Internet protocol spoofing. requesting node rather than only a single record.
d. URL masquerading. e. It is not used in conjunction with either the bus
e. a SYN-ACK packet. or ring topologies.

6. A DDos attack 10. Which of the following statements is correct?

a. is more intensive than a Dos attack because it a. A bridge is used to connect a LAN and a WAN.
emanates from single source. b. Packet switching combines the messages of
b. may take the form of either a SYN flood or smurf multiple users into a packet for transmission.
attack. At the receiving end, the packet is disassembled
c. is so named because it affects many victims into individual messages and distributed to the user.
simultaneously, which are distributed across the c. The decision to partition a database assumes
Internet. that no identifiable primary user exists in the
d. turns the target victim’s computers into zombies organization.
that are unable to access the Internet. d. Message switching is used to establish temporary
e. none of the above is correct. connections between network devices for
the duration of a communications session.
7. A ping signal is used to initiate e. A deadlock is a temporary phenomenon that
a. URL masquerading. disrupts transaction processing. It will resolve
b. digital signature forging. itself when the primary computer completes
c. Internet protocol spoofing. processing its transaction and releases the data
d. a smurf attack the other nodes need.
e. a SYN-ACK packet.

8. A digital signature
a. is the encrypted mathematical value of the
message sender’s name.
b. is derived from the digest of a document that
has been encrypted with the sender’s private key.
c. is derived from the digest of a document that has
been encrypted with the sender’s public key.
d. is the computed digest of the sender’s digital
certificate.
e. allows digital messages to be sent over an analog
telephone line.

9. Which of the following statements about the

client-server model is correct?
a. It is best suited to the token ring topology
because the random-access method this topology
uses detects data collisions.
b. It distributes both data and processing tasks to
the server node. The client-server model can
use the bus or ring topology.
c. It is most effective when used as a bus topology
because its deterministic access method avoids