ACCOUNTING SYSTEMS- PRINCIPLES AND DEVELOPMENT

1. Which of the following is not necessary in formulating a good systems design?

a. Simplicity
b. Reliability
c. Flexibility
d. Not Given
D
2. A good accounting system should provide an effective accounting control which should include
a. Reliable Personnel
b. Fixing Responsibility
c. Physical safeguards
d. All of the above
D
3. Accounting system provides information for internal and external reporting except
a. To managers for use in planning and controlling routine operation
b. To stockholders, government, and other outside parties
c. To managers for use in market research and legal planning
d. To managers for use in strategic planning that is, making special decisions and the
formulating of overall policies and long-range plans.
C
4. The processing of accounting data that involves variety of transactions and large volume is best
done, without sacrificing economy, by using
a. Manual Accounting system
b. Mechanical accounting system
c. EDP accounting system
d. Answer not given
B
5. The central processing unit in an EDP system does not include
a. Primary storage
b. Peripheral Equipment
c. Control unit
d. Arithmetic/logic unit
D
6. Which of the following is not a component of an accounting system?
a. Business forms and documents
b. Equipment used by which tasks are carried out
c. People who implement the system
d. Answer not given
D
7. Which of the following is not an advantage in the use of flowchart?
a. The information provided by flowcharts about the content and appropriateness of forms and
records is not limited
b. They enable you to visualize the system components and their interrelationships
c. They are especially useful in evaluating EDP controls
d. They avoid a detailed study of written procedures.
A
8. Which of the following activities would be least likely to strengthen a companys accounting
control?
a. Separating accounting from other financial operations
b. Maintaining insurance for fire and thef
c. Fixing responsibility for the performance of employee duties
d. Carefully selecting and training employees
B
9. Effective accounting control over the payroll should include procedures that segregate the duties
of making salary payments to employees and
a. Controlling unemployment insurance claims
b. Maintaining employee personnel records
c. Approving employee fringe benefits
d. Hiring new employees
D
10. Which of the following acts is not performed by a CPA accounting system?
a. Formulation of the chart of accounts
b. Design of business and accounting forms
c. Supervision of application of system and procedures recommended
d. Preparation of an accounting manual
C
11. The program flowcharting symbol representing a decision is a
a. Triangle
b. Rectangle
c. Circle
d. Diamond
D
12. An orderly arrangements of procedures, personnel, written records, equipment and devices
utilized for the systematic collection, processing and reporting of financial and other information
essential to the efficient conduct and evaluation of the activities of an enterprise is a/an
a. Accounting system
b. Accounting Cycle
c. Accounting process
d. Management Information system
D
13. What is the computer process called when data processing is performed concurrently with a
particular activity and the results are available soon enough to influence the particular course of
action being taken or the decision being made?
a. Real-time processing
b. Batch Processing
c. Random access processing
d. Integrated data processing
D
14. It would be appropriate for the payroll accounting department to be responsible for which of the
following functions?
a. Approval of employee time records
b. Maintenance of records of employment, discharges, and pay increases
c. Preparation of periodic government reports as to employees earnings and withholding
taxes.
d. Answer not given
A
15. The following flowcharting symbol indicates that
a. A master file has been created by a manual operation
b. A master file has been created by computer operation
c. A document has been generated by a computer operation
d. A document has been generated by a manual operation
C
16. The most efficient and least costly method of dumping information for purposes of maintaining a
backup file is from disk to
a. Dump
b. Cards
c. Print out
d. Tape
D
17. Which of the following is an example of application controls in electronic data processing?
a. Input controls
b. Hardware controls
c. Documentation procedures
d. Controls over access to equipment and data files
A
18. Which of the following employees in a companys electronic data processing department should
be responsible for designing new or improved data processing procedures?
a. Flowchart editor
b. Programmer
c. Systems Analyst
d. Control-group supervisor
C
19. In an EDP system, automated equipment controls and hardware controls are designed to
a. Arrange data in a logical sequential manner of processing
b. Correct errors in the computer programs
c. Monitor and detect errors in source documents
d. Detect and control errors arising from use of equipment
D
20. Which of the following is not a basic component of an accounting system?
a. Procedures, like handling cash receipts and disbursements
b. People, like accountants and clerks
c. Administrative policies
d. Forms, like checks and journals
C
21. Accounting cycle require nine steps from origination of data up to interpretation of financial
information, but will not include
a. Posting to ledger accounts
b. Preparation of sales and cash transactions
c. Preparation of trial balance, making closing entries
d. Balancing and ruling of accounts, and preparation of financial statements
B
22. Systems engagement includes the following except for
a. The planning of a system of a new enterprise that the owners agree to implement once
recommended
b. The planning of a system for a business already in operation for which the practitioner will
help install and advise in the operation of the system
c. The complete revision of a system already in use for the practitioner will make the decision
in the installation and implementation of the system
d. The modification or improvement of a system for which recommend the practitioner will and
install
C
23. The overall system design process includes several stages from the initial review to support and
maintenance stage, which also includes
a. Systems proposal, detailed survey and preliminary design
b. Design report and detailed design
c. Systems specification and construction
d. All of the above
D
24. A management information system is designed to ensure that management possesses the
information it needs to carry out its functions through the integrated actions of
a. Data gathering, analysis and reporting functions
b. A computerized information retrieval and decision-making system
c. Statistical and analytical review functions
 d. Production, budgeting, and sales forecasting activities
A
25. To replace the human element of error detection associated with manual processing, a well-
designed automated system will introduce
a. Dual circuitry
b. Programmed limits
c. Echo checks
d. Read afer write
B
26. In a computerized system, procedure or problem-oriented language is converted to machine
language through a/an
a. Interpreter
b. Verifier
c. Compiler
d. Converter
C
27. The machine-language program that results when a symbolic-language program is translated is
called a/an
a. Processor program
b. Object program
c. Source program
d. Wired program
B
28. The machine language for a specific computer
a. May be changed by the programmer
b. Is the same as all other computer languages
c. Is determined by the engineers who designed the computer
d. Is always alphabetic
C
29. One of the major problems in the EDP system is that the same individual may perform
incompatible functions. One compensating control for this is the use of
a. Echo checks
b. A self-checking digit system
c. Computer generated hash totals
d. A computer log
D
30. Totals of amounts in computer-record data fields, which are not usually added for other
purposes but are used only for data processing control purposes, are called
a. Record totals
b. Hash Totals
c. Processing data totals
d. Field totals
 B
31. An EDP input control is designed to ensure that
a. Machine processing is accurate
b. Only authorized personnel have access to the computer area
c. Data received for processing are properly authorized and converted to machine readable
form
d. Electronic data processing has been performed as intended
C
32. Which of the following activities would most likely be performed in the electronic data
processing department?
a. Initiation of changes to master records
b. Conversion of information to machine readable-forms
c. Correction of transactional errors
d. Initiation of changes to existing applications
B
33. For control purposes, which of the following should be organizationally segregated from the
computer operation function?
a. Data conversion
b. Surveillance of CRT messages
c. System development
d. Minor maintenance according to a schedule
C
34. For a n appropriate segregation of duties, journalizing and posting transactions should be
assigned to
a. The treasurer s department
b. General Accounting
c. Payroll accounting
d. The time-keeping department
B
35. What type of the EDP system is characterized by data that are assembled from more that one
location and records and are updated immediately?
a. Microcomputer system
b. Minicomputer system
c. Batch Processing system
d. On-line-real-time system
D
36. When source documents, such as payroll time cards or sales orders, are accumulated daily;
weekly; or monthly and the input is validated to create a transaction file, this is called
a. On-line input with real-time processing
b. On-line input with batch Processing
c. Batch input and processing
d. Batch input with real-time processing
 C
37. The completeness of EDP-generated sales figures can be tested by comparing the number of
items listed on the daily sales report with the number of items billed on the actual invoices. This
process uses:
a. Check digits
b. Control totals
c. Validity tests
d. Process tracing data
B
38. If a control total were to be computed on each of the following data items, which would best be
identified as a hash total for a payroll EDP application?
a. Gross pay
b. Hours worked
c. Department number
d. Number of employees
D
39. The person responsible for designing accounting systems, developing data processing projects
and developing specifications for applications programmers is the
a. EDP Manager
b. Systems Programmer
c. Systems Analyst
d. Applications Programmers
C
40. Accounting systems must contain controls to ensure:
a. That records are checked for accuracy at various stages of the accounting cycle
b. Effective controls needed to prevent mishandling, thef or the temptation to steal
c. That efficiency is achieved and reports are produced at the earliest possible time
d. All of the above
D