Test Bank for Accounting Information Systems 9th Edition By Ulric Gelinas Richard Dull Patrick Wheeler |All Chapters |Latest A+

Test Bank for Accounting Information Systems 9th Edition By Ulric Gelinas Richard Dull Patrick Wheeler |All Chapters |Latest A+ Test Bank for Accounting Information Systems 9e Ulric Gelinas Richard Dull Patrick Wheeler Answers At The End Of Each Chapter Chapter 1--Introduction to Accounting Information Systems Student: 1. The three themes of the text are operating systems, e-business, and internal control. True False 2. In an assurance service the accountant will provide the original information used for decision making. True False 3. Information systems reliability and electronic commerce have been identified by the AICPA as potential assurance services. True False 4. E-business is the application of electronic networks to undertake business processes among the functional areas in an organization. True False 5. The role of the accountant has evolved to include non-financial information and information technology. True False 6. Enterprise systems integrate an organization's business processes and information from all of an organization's functional areas. True False 7. An information system consists of an integrated set of computer-based and manual components established to provide information to users. True False 8. Internal control is a process that provides complete assurance that the organization is meeting its objectives, such as efficiency and effectiveness of operations and reliable reporting. True False 9. The Sarbanes-Oxley Act of 2002 has dramatically changed the daily work of financial accountants and auditors. True False 10. According to the Sarbanes-Oxley Act of 2002, management must identify, document, and evaluate significant internal controls. True False 11. According to the Sarbanes-Oxley Act of 2002 and PCAOB Auditing Standard No. 5, management must audit and report on auditors' assertions about the organizations' systems of internal controls. True False 12. According to the Sarbanes-Oxley Act's Section 409, material changes in the organization's financial condition must be disclosed to the public on a rapid and current basis. True False 13. The Sarbanes-Oxley Act's Section 404 creates changes in both how companies document and evaluate internal control and how auditors audit and report on internal control. True False 14. Sarbanes-Oxley Section 404 compliance is a major line of business for the biggest accounting firms. True False 15. The Sarbanes Oxley Act of 2002 applies to publicly traded companies and not-for-profit entities. True False 16. Historically the purpose of an accounting information system is to collect, process, and report financial aspects of business events. True False 17. The MIS is a subsystem of the AIS. True False 18. Sales/marketing information system is traditionally part of the AIS. True False 19. Billing/accounts receivable is traditionally part of the AIS. True False 20. Production and personnel are part of the operations process. True False 21. The management process includes marketing and sales. True False 22. Information that is capable of making a difference in a decision-making situation, by reducing uncertainty or increasing knowledge for that particular decision, has the quality of relevance. True False 23. Information about a customer's credit history that is received after the decision to grant additional credit lacks completeness. True False 24. The consistency principle is violated when a firm uses straight-line depreciation one year and changes to declining balance depreciation the next year. True False 25. Accuracy is the correspondence or agreement between the information and the actual events or objects that the information represents. True False 26. To be reliable information must be relevant. True False 27. The most important information for tactical management involves information about the organization's environment. True False 28. Deciding how much credit to grant to a customer is a structured decision. True False 29. Strategic management requires more detailed information than operations management. True False 30. The three steps in decision making take place in the sequence of (1) intelligence (2) design (3) choice. True False 31. Strategic managers use more information from outside the organization than do operations managers. True False 32. Operations management requires information that is more accurate and timely than strategic management. True False 33. What controls will be necessary is a question that an accountant answers in the design of the AIS. True False 34. As a designer of an AIS the accountant will test a new system's controls. True False 35. As a user of an AIS an accountant must know how systems are developed. True False 36. The three themes of the text book include all of the following except: A. enterprise systems B. risk assessment C. e-business D. internal control 37. Efficiency and effectiveness of operations are goals of: A. enterprise systems B. risk assessment C. e-business D. internal control 38. A set of interdependent elements that together accomplish specific objectives is a A. system B. subsystem C. database D. accounting information system 39. A system can be further divided into A. input data B. subsystems C. databases D. enterprise systems 40. A system that consists of an integrated set of computer-based and manual components established to collect, store, and manage data and to provide output information to users is a(n) A. output B. ERP C. database D. information system 41. An information system: A. is composed of only the computer-based information resources of an organization B. may consist of both computer-based and manual components C. is different from a data processing system because it uses computers D. is not generally used for transaction processing 42. The AICPA has identified all but which of the following as assurance services? A. risk assessment B. information systems reliability C. electronic commerce D. consulting 43. The sequence of components in the functional model of an information system is A. Output, Input, Processing, Users B. Input, Processing, Output, Users C. Processing, Input, Users, Output D. Users, Processing, Input, Output 44. Historically, the relationship between an information system and an accounting information system has been: A. the AIS is a part of the IS B. the IS is a part of the AIS C. the IS and the AIS are one in the same D. the IS and AIS are unrelated 45. The text takes the following view of the relationship between an IS and an AIS: A. the AIS is part of the IS B. the IS is part of the AIS C. the IS and the AIS are one in the same D. the AIS is the primary system and the IS the subsystem 46. A man-made system that generally consists of an integrated set of computer-based components and manual components established to collect, store, and manage data and to provide output information to users. A. information system B. output system C. business event system D. database system 47. The suggests that technology improves information available for decision making A. AICPA B. Sarbanes-Oxley Act of 2002 C. Occupational Outlook Handbook D. Accounting Information System 48. A man-made system consisting of people, equipment, organization, policies and procedures with the objective of accomplishing the work of the organization. A. operations process B. management process C. information process D. planning process 49. A man-made system consisting of people, authority, organization, policies and procedures whose objective is to accomplish the work of planning and controlling the operations of the organization. A. operations process B. management process C. information process D. planning process 50. The three logical components of a business process include all of the following except: A. management process B. operations process C. information process D. organization process 51. Which of the following statements is true? A. The information process facilitates operations by maintaining data such as inventory and customer data. B. The information process provides the means by which management monitors the operations process. C. Management designs the operations and information processes. D. All of the statements are true. 52. Which of the following statements is false? A. Management designs the operations and information processes and establishes these processes with people, equipment, and policies. B. Information process users include operations personnel, management, and people outside the organization. C. Operations related and accounting related processes are designed by those external to the organization. D. None of the statements are true. 53. is (are) data presented in a form that is useful to decision makers. A. activities B. information C. objectives D. goals 54. are facts and figures in raw form. A. data B. information C. objectives D. goals 55. All of the following are components of relevance except: A. feedback value B. predictive value C. verifiability D. timeliness 56. All of the following are components of reliability except: A. validity B. accuracy C. verifiability D. feedback value 57. The Sarbanes-Oxley Act of 2002 dramatically changed the daily work of financial accountants and auditors because it A. expanded the scope of the audit beyond financial information B. required that organizations work with their auditors to design systems of internal control C. required that external auditors report on the effectiveness of an organizations system of internal control D. expanded the opportunities for auditors to engage in consulting activities with their audit clients 58. Internal control is a process designed to provide absolute assurance regarding achieving objectives in which of the following? A. efficiency and effectiveness of operations B. reliability of reporting C. compliance with applicable laws and regulations D. none of the above 59. improves the decision maker's capacity to predict, confirm, or correct earlier expectations A. understandability B. predictive value and feedback value C. neutrality D. comparability 60. The information quality that enables users to identify similarities and differences in two pieces of information is A. understandability B. predictive value and feedback value C. neutrality D. comparability 61. The correspondence or agreement between the information and the actual events or objects that the information represents is known as A. accuracy B. completeness C. neutrality D. comparability 62. The degree to which information includes data about every relevant object or event necessary to make a decision is A. accuracy B. completeness C. neutrality D. comparability 63. The ability of more than one individual to come to the same measurement is known as A. accuracy B. completeness C. verifiability D. comparability 64. A primary reason that the FASB requires that GAAP be consistently applied from one period to the next is A. accuracy B. completeness C. neutrality D. comparability 65. If information arrives too late to impact a decision then there is a problem with A. timeliness B. relevance C. completeness D. neutrality 66. Which of the following is NOT one of the three steps in decision making as described in the text A. action B. intelligence C. design D. choice 67. Regarding management problem structure and information requirements, which of the following represents the vertical information flows from lowest to highest? A. strategic management, tactical management, operations management, operations and business event processing B. operations and business event processing, strategic management, tactical management, operations management C. tactical management, operations management, strategic management, operations and business event processing D. operations and business event processing, operations management, tactical management, strategic management 68. Which of the following statements is true? A. With a more structured decision, there is a need for less accurate information. B. With a more structured decision, there is a need for summarized data. C. With a more structured decision, there is a need for well defined, more accurate data. D. With a less structured decision, there is a need for well defined more accurate data. 69. Which of the following is an unstructured decision? A. how much inventory to reorder B. how fast an assembly line should operate C. when scheduled maintenance should be performed D. which research and development projects should be undertaken 70. At which level of the organization are decisions most unstructured? A. operations and business event processing level B. strategic management level C. operations management level D. tactical management level 71. requires information to assess the environment and to project future events and conditions. A. strategic management B. tactical management C. operations management D. operations and business event processing 72. requires information that focuses on the day to day management of the business. A. strategic management B. tactical management C. operations management D. operations and business event processing 73. The central repository for all the data related to the enterprise's business activities and resources. A. information system B. management information system C. enterprise database D. strategic planning 74. E-business does not include A. business processes between individuals and organizations B. electronic networks C. ERP systems D. interaction between back-office and front-office processes 75. Enterprise systems A. integrate back-office and front-office processes B. can include ERP systems C. have become fairly easy to implement D. facilitate business processes between organizations 76. Which of the following statements is false? A. Strategic planning is relatively unstructured. B. Strategic planning uses much information from outside the firm. C. Tactical management focuses on relevant operations units and uses some external information. D. Tactical management uses the most detailed and accurate information. 77. Generally, which of the following is NOT one of the three roles an accountant typically fills in relation to the AIS? A. designer B. programmer C. user D. auditor 78. Which of the following questions might the accountant answer in the design of the AIS? A. what will be recorded B. what controls are necessary C. what reports will be produced D. all of the above 79. Which of the following is an element of the operations process? A. production B. planning C. controlling D. decision making 80. Which of the following is one of the three most prominent management activities? A. production B. finance C. marketing D. planning 81. Accounting is an activity of the A. management process B. operations process C. information process D. organization process 82. Decision-making is an activity of the A. management process B. operations process C. information process D. organization process 83. , , and are the three themes of the textbook. 84. The Act of 2002 changed the daily work of financial accountants, auditors, and others. 85. A(n) is a set of independent elements that together accomplish specific objectives. 86. The component parts of any system are known as . 87. Software packages that can be used for the core systems necessary to support enterprise systems are called . 88. is the application of electronic networks (including the Internet) to undertake business processes between individuals and organizations. 89. is a process¾effected by an entity's board of directors, management, and other personnel¾designed to provide reasonable assurance regarding achieving objectives in the following categories: efficiency and effectiveness of operations, reliability of reporting, and compliance with applicable laws and regulations. 90. The units of the Big Four public accounting firms have accounted for a significant percentage of the firm's business and, prior to the Sarbanes-Oxley Act of 2002, were growing faster than the accounting, auditing, and tax portions of their businesses. 91. To provide non-audit services the accountant will be required to have core competencies that include "interpretation of converging information" (able to interpret and provide a broader context using financial and nonfinancial information) and ''technology adept'' (able to use and leverage technology in ways that add value to clients, customers, and employers). 92. Three of the five proposed core services of the are assurance and information integrity, management consulting and performance measurement, and technology services. 93. Historically, the accountant has performed a(n) function to determine the reliability of financial information presented in printed financial statements. 94. A(n) system generally consists of both computerized and manual components that operate to collect, store, and manage data and to provide output information to users. 95. The is a man-made system consisting of the people, equipment, organization, policies, and procedures whose objective is to accomplish the work of the organization. 96. To present the results of their endeavors effectively, accountants must possess strong . 97. decisions are those for which all three decision phases (intelligence, design, and choice) are relatively routine or repetitive. 98. A(n) is designed to collect, process, and report information related to financial transactions. 99. Input, processing, , and users are included in a functional model of an information system. 100. The highest level of management activity and the one with the broadest scope is management. 101. In the management hierarchy, the level that lies between strategic management and operations management is called management. 102. Facts or figures in raw form are referred to as . 103. The quality of information concerns the provision of information through the optimal (most productive and economical) use of resources. 104. The quality of information deals with information being relevant and pertinent to the business process as well as being delivered in a timely, correct, consistent, and usable manner. 105. Information that is capable of making a difference in a decision of a user is said to possess the quality of . 106. Information that is available before it loses its capacity to influence a user's decision possesses the quality of . 107. Information that improves a decision makers ability to predict, confirm, or correct earlier expectations has the quality known as . 108. The quality of information when there is a high degree of consensus about the information among independent measurers using the same measurement methods is referred to as . 109. Information that is not biased is said to possess . 110. The quality of information that enables users to identify similarities and differences in two pieces of information is referred to as . 111. GAAP is applied when we can compare financial statements and related information from one period to the next. 112. Section of the Sarbanes-Oxley Act of 2002 requires auditors to report on about the effectiveness of the organizations' systems of internal control. 113. Section of the Sarbanes-Oxley Act of 2002 requires management to identify, document and evaluate significant internal controls. 114. Section of the Sarbanes-Oxley Act of 2002 requires disclosure to the public on a rapid and current basis of material changes in an organization's financial condition. 115. The is a man-made system consisting of the people, authority, organization, policies, and procedures whose objective is to plan and control the operations of the organization 116. is data presented in a form that is useful in a decision-making activity. 117. Information about actual authorized events and objects has . 118. is the correspondence or agreement between the information and the actual events or objects that the information represents. 119. is the degree to which information includes data about every relevant object or event necessary to make a decision and includes that information only once. 120. Describe the activities performed and information used by each of the following levels in the management structure: a. Strategic management b. Tactical management c. Operations management 121. Describe the three roles that an accountant can play in the AIS? 122. Discuss five of the ten items that comprise the components of the study of AIS in this text. Chapter 1--Introduction to Accounting Information Systems Key 1. FALSE 2. FALSE 3. TRUE 4. FALSE 5. TRUE 6. TRUE 7. TRUE 8. FALSE 9. TRUE 10. TRUE 11. FALSE 12. TRUE 13. TRUE 14. TRUE 15. FALSE 16. TRUE 17. FALSE 18. FALSE 19. TRUE 20. TRUE 21. FALSE 22. TRUE 23. FALSE 24. TRUE 25. TRUE 26. FALSE 27. FALSE 28. TRUE 29. FALSE 30. TRUE 31. TRUE 32. TRUE 33. TRUE 34. FALSE 35. FALSE 36. B 37. D 38. A 39. B 40. D 41. B 42. D 43. B 44. A 45. C 46. A 47. C 48. A 49. B 50. D 51. D 52. C 53. B 54. A 55. C 56. D 57. C 58. D 59. B 60. D 61. A 62. B 63. C 64. D 65. A 66. A 67. D 68. C 69. D 70. B 71. A 72. C 73. C 74. C 75. B 76. D 77. B 78. D 79. A 80. D 81. B 82. A 83. Enterprise systems, e-business, internal control or Enterprise systems, internal control, e-business or internal control, Enterprise systems, e-business or internal control, e-business, Enterprise systems or e-bu 84. Sarbanes-Oxley 85. system 86. subsystems 87. enterprise resource planning (ERP) systems or enterprise resource planning systems or ERP systems 88. E-business 89. Internal control 90. business consulting 91. assurance 92. CPA Vision Project 93. attest 94. information or management information 95. operations process 96. oral and written communication skills 97. Structured 98. accounting information system (AIS) or accounting information system or AIS 99. output 100. strategic 101. tactical 102. data 103. Efficiency 104. Effectiveness 105. relevance 106. timeliness 107. feedback value or predictive value 108. verifiability 109. neutrality or freedom from bias 110. comparability 111. consistently 112. 404 113. 404 114. 409 115. management process 116. information 117. validity 118. accuracy 119. completeness 120. Suggested answer: a. Strategic management requires information to assess the environment and to project future events and conditions. Such information is even more summarized, broader in scope, and comes from outside the organization more than does the information used by tactical management. To be useful to division managers, chief financial officers (CFOs), and chief executive officers (CEOs), information must relate to longer time periods, be sufficiently broad in scope, and be summarized to provide a means for judging the long-term effectiveness of management policies. External financial statements, annual sales reports, and division income statements are but a few examples of strategic-level information. b. Tactical management requires information that focuses on relevant operational units and is more summarized, broader in scope, and need not be as accurate as the information used by operations management. Some external information may be required. For example, a warehousing and distribution manager might want information about the timeliness of shipments each month. c. Information useful to operations management personnel is often an aggregate of data related to several business events. For example, a report summarizing shipments made each day might be useful to the shipping manager. At the operations management level, supervisors use this type of information to monitor the daily functioning of their operating units. The vertical information useful to operations management is a summarized and tailored version of the information that flows horizontally. 121. The three roles the accountant can play in the AIS are designer, user and auditor. The accountant is a designer of the AIS who brings knowledge of accounting principles, auditing principles, information systems techniques, and systems development methods. The accountant is also a user of the AIS and will provide feedback on how well the system works, how easy or difficult it is to use, and on what items can be changed or improved from a user perspective. The accountant performs a number of functions within the organization such as controller, treasurer, financial analyst, all of which are users of the AIS. Accountants, as users of the system can also be effective in the design process because of the functions they perform. As internal and external auditors, accountants audit the AIS or provide assurance services about internal control or other items discussed in the chapter. Auditors are interested in the reliability of accounting data and of the reports produced by the system. They may test the system's controls, assess the system's efficiency and effectiveness, and participate in the system design process. The auditor must possess knowledge of internal controls, systems development techniques, technology and the design and operation of the AIS to be effective. 122. The 10 components of the study of AIS are depicted in Figure 1.1. A detailed description of these components may be found in the chapter. Here is a brief summary of the detailed descriptions: · Technology. Technological developments have a profound effect on information systems; enterprise systems, ERP systems, e-business, databases, and intelligent systems are but a few examples. Technology provides the foundation on which AIS and business operations rest, and knowledge of technology is critically important to your understanding of the AIS discipline. · Databases. To perform analysis, to prepare information for management decision making, and to audit a firm's financial records, an accountant must be able to access and use data from public and private databases. · Reporting. To design reports generated by an information system, the accountant must know what outputs are required or are desirable. These reports often support management decisions as well as fulfill certain reporting obligations. GAAP-based financial statements are but one example of reporting that will be considered in our study of AIS. · Control. Traditionally, accountants have been experts on controlling business processes. As a practicing accountant, you will probably spend much of your time providing such expertise. You must develop an understanding of control that is specific to the situation at hand, yet is adaptable for the future. · Business operations. Organizations engage in activities or operations, such as hiring employees, purchasing inventory, and collecting cash from customers. AIS operates in concert with these business operations. Many AIS inputs are prepared by operating departments¾the action or work centers of the organization¾and many AIS outputs are used to manage these operations. Therefore, we must analyze and manage an AIS in light of the work being performed by the organization. · Events processing. As organizations undertake their business operations, events, such as sales and purchases, occur. Data about these events must be captured and recorded to mirror and monitor the business operations. The events have operational and AIS aspects (i.e., some do not have a direct accounting impact, and some are accounting "transactions" that result in entries in the general ledger). To design and use the AIS, an accountant must know what event data are processed and how they are processed. · Management decision making. The information used for a decision must be tailored to the type of decision under consideration. Furthermore, the information is more useful if it recognizes the personal management styles and preferences of the decision maker. · Systems development and operation. The information systems that process business events and provide information for management decision making must be designed, implemented, and effectively operated. An accountant often participates in systems development projects as a user or business process owner contributing requests for certain functions or an auditor advancing controls for the new system. Choosing the data for a report, designing that report, and configuring an enterprise system are examples of systems development tasks that can be accomplished by an accountant. · Communications. To present the results of their endeavors effectively, accountants must possess strong oral and written communication skills. Throughout this course, you will be required to evaluate alternatives, to choose a solution, and to defend your choice. Technical knowledge alone won't be enough for the last task. · Accounting and auditing principles. To design and operate the accounting system, an accountant must know the proper accounting procedures and must understand the audits to which the accounting information will be subjected. Chapter 2--Enterprise Systems Student: 1. One of the primary goals of implementing an ERP system is to standardize systems across multiple locations and multiple divisions. True False 2. Large multilocation and multidivision companies are challenged to see the greatest benefits from ERP systems. True False 3. Early adopters of ERP systems were in the business of making products. True False 4. ERP systems have proved to be quite easy to install and in short periods of time. True False 5. Enterprise systems potentially integrate the business process functionality and information from all of an organization's functional areas. True False 6. With an enterprise system an organization will conduct business in a more costly manner. True False 7. An add-on software module in an enterprise system might be a customer relationship management system (CRM). True False 8. The dominant player in the large system ERP arena is Microsoft. True False 9. SAP has a primary focus on large Fortune 500 type companies. True False 10. Microsoft Dynamics and Sage Group focus on small and mid market sized companies. True False 11. Customer relationship management (CRM) software builds and maintains an organization's customer-related database. True False 12. Customer relationship management (CRM) software aggregates, manages, and retains data across the entire organization for the identification, acquisition, and retention of vendors to maximize the benefits of those relationships. True False 13. If you have made a Web purchase such as with A you have experienced some of the functionality of a CRM system where the vendor keeps track of your name, address, and purchases. True False 14. Customer relationship management (CRM) functionality includes procurement and contract management. True False 15. Customer self service (CSS) software is often an extension of CRM software. True False 16. Supply chain management (SCM) software helps plan and execute steps such as demand planning, acquiring inventory, manufacturing, distributing, and selling the product. True False 17. Supplier relationship management (SRM) software manages the interactions with the organization's that supply the goods and services to an enterprise. True False 18. Middleware is a software product that connects two or more separate applications or software modules. True False 19. Enterpriseware might be used to stitch together a number of legacy systems, an enterprise system, best-of-breed applications, and Web-based applications. True False 20. An Application Programming Interface (API) is a means for connecting to a system or application provided by the developer of that application. True False 21. Microsoft Dynamics Snap line of tools is an example of an Application Programming Interface. True False 22. Enterprise application integration (EAI) links together two or more systems and allows them to work together. True False 23. Product life-cycle management (PLM) software manages product data from design through manufacture, and disposal. True False 24. Enterprise Services Bus (ESB) is a type of communications-broker software that uses standardized protocols to let event-driven applications communicate in a less-expensive manner than can the tightly-coupled, synchronous enterprise application integration (EAI) platforms. True False 25. DreamWeaver is a Web services platform from SAP that can be used to build applications that integrate business processes and databases from a number of sources within and between organizations. True False 26. Business process management (BPM) provides a comprehensive method for integrating manual and automated internal processes, applications, and systems, as well as integration to external partners and services. True False 27. With a best-of-breed approach an organization can minimize the number of different software modules employed to implement an enterprise system. True False 28. Event driven-architecture (EDA) is an approach to designing and building enterprise systems in which business events trigger messages to be sent by middleware between independent software modules that are completely unaware of each other. True False 29. In event driven architecture (EDA) the business unit "pushes" the event to the recipient rather than waiting for the recipient to request or "pull", the event. True False 30. The value chain is a chain of activities performed by the organization to transform outputs into inputs valued by the customer. True False 31. An organization creates a competitive advantage by creating less value for its customers than does its competition. True False 32. Supporting activities of the value chain include activities directly involved with marketing, producing, selling, and delivering the product or service to the customer. True False 33. Primary activities of the value chain provide infrastructure such as procurement, information technology, human resources, and accounting. True False 34. The value chain works to separate the functional activities or silos of the organization. True False 35. Dell's value chain takes raw materials, manufactures computers and other products, and delivers them to customers in a timely manner at an attractive price. True False 36. The activities in the value chain, the value activities, are business processes that convert inputs to valued outputs. True False 37. In a disaggregated information system, the customer will be notified immediately whether the item is on the shelf and not committed to another customer. True False 38. Telling the customer when they will receive an item is known as available to promise (ATP). True False 39. A character is a basic unit of data such as a letter, number, or special character. True False 40. A field is a collection of related characters that comprise an attribute, such as a customer number or name. True False 41. A record is a collection of related data fields pertaining to a particular entity or event. True False 42. The credit limit within a customer record always provides unlimited authorization to accept a customer order. True False 43. Segregation of duties includes separating the sales and credit departments. True False 44. Generally, when processing a customer order, one does not need to know the total price of the goods before credit authorization can be made. True False 45. In an enterprise system, once a customer order is completed, the purchasing function can be immediately informed that the merchandise has been sold and may need to be replenished. True False 46. It is best to combine authorization of data-maintenance activities with authorization of business event processing activities. True False 47. An enterprise systems centralized database can make data, such as inventory data, visible throughout the organization. True False 48. The correct sequence of the three steps in the sales and distribution process are (1) order entry (2) shipment process and (3) billing process. True False 49. The correct sequence of the three steps in the materials management process is (1) record vendor invoice (2) create purchase order (3) receive the goods. True False 50. The bottom line is that without integrated information systems organizations have difficulty being managed on a day-to-day basis and being successful in the long run. True False 51. The financial accounting module integrates with the sales and distribution and materials management modules. True False 52. The purchase-to-pay process includes the events surrounding the sale of goods to a customer, the recognition of revenue, and the collection of the customer payment. True False 53. The order-to-cash process includes events surrounding the purchase of goods from a vendor, the recognition of those costs, and the payment to the vendor. True False 54. With the installation of an enterprise system an organization should experience all of the following except A. improved customer service B. empowerment of decentralized operations C. improved budgeting D. reduced personnel 55. Core applications of an ERP are A. financial accounting B. materials management C. sales and distribution D. all of the above 56. Which of the following is usually not part of an ERP's core applications? A. legacy systems B. financial accounting C. material management D. sales and distribution 57. The enterprise system might facilitate the purchase of office equipment by all of the following except A. providing an electronic order form (a purchase requisition) B. assisting the vendor with the selection of the appropriate purchase order C. routing the order to appropriate authorities for specific approval D. making data available for management analysis 58. The most dominant player in the ERP market for large companies is A. Oracle B. Sage C. SAP D. Microsoft 59. Which statement about ERP installation is least accurate? A. For the ERP to be successful, process reengineering is normally required. B. A problem with ERPs is that some important business processes may not be supported. C. When a business is diversified, little is gained from ERP installation. D. Only required modules need be installed. 60. Which statement is true? A. ERPs are infinitely scalable. B. Performance problems usually stem from technical problems, not business process reengineering. C. The better ERP can handle any problems an organization can have. D. ERP systems can be modified using add-on software. 61. Software that builds and maintains an organization's customer-related database is known as A. customer relationship management (CRM) software B. customer self service (CSS) software C. sales force automation (SFA) software D. supply chain management (SCM) software 62. Software that allows an organization's customers to complete inquiry without the aid of the organization's employees is known as A. customer relationship management (CRM) software B. customer self service (CSS) software C. sales force automation (SFA) software D. supply chain management (SCM) software 63. Software that automates sales tasks such as order processing and tracking is known as A. customer relationship management (CRM) software B. customer self service (CSS) software C. sales force automation (SFA) software D. supply chain management (SCM) software 64. Software that helps execute steps such as demand planning, acquiring inventory, manufacturing, distribution, and sales is known as A. customer relationship management (CRM) software B. customer self service (CSS) software C. supplier relationship management (SRM) software D. supply chain management (SCM) software 65. Software that manages the interactions with the organization's that supply the goods and services to an enterprise is known as A. customer relationship management (CRM) software B. customer self service (CSS) software C. supplier relationship management (SRM) software D. supply chain management (SCM) software 66. Software that manages the product, beginning with the design of the product, continuing through manufacture and culminating in the disposal of the product, is known as A. product lifecycle management (PLM) software B. product relationship management (PRM) software C. product self service (PSS) software D. supplier relationship management (SRM) software 67. Supply chain management (SCM) software A. is typically under the control of external partners in the chain. B. helps plan and execute demand planning; acquiring inventory; and manufacturing, distributing, and selling a product. C. cannot be integrated into an overall ERP. D. none of the above 68. Some third-party modules can extract data from A. legacy systems only B. ERP systems only C. both legacy systems and ERP systems D. all of the above 69. Which of the following tracks a product from design, continuing through manufacture, and culminating with the disposal of the product at the end of its life? A. supply chain management (SCM) B. value chain C. product life cycle management (PLM) D. none of the above 70. Technology that can connect together ERP systems and third party add-on modules is called A. supply chain software B. enterprise application integration (EAI) C. EDP systems D. none of the above 71. Enterprise systems support an organization by: A. facilitating the functioning of an organization's operations B. retaining records about business events C. storing data useful for decision making D. all of the above 72. In an event-driven architecture (EDA) A. business events are handled as batches of events B. a business unit "pulls" the event to the recipient C. business events are "pushed" immediately and simultaneously to all interested parties D. none of the above 73. In an event-driven architecture (EDA) A. business events are processed in batches B. the enterprise operates in real time C. the enterprise only uses modules from a single software vendor D. none of the above 74. In an event-driven architecture (EDA) A. each business event is handled individually B. real time processing reduces delays in business processing C. an event notification is sent to the middleware, also known as "publish" or "send" D. all of the above 75. The general term for software that connects third-party modules to ERP systems is known as A. DreamWeaver B. Middleware C. Microsoft D. NetWeaver 76. An approach to designing and building enterprise systems in which business events trigger messages to be sent by middleware between independent software modules that are completely unaware of each other. A. Application Programming Interface (API) B. Business Process Management (BPM) C. Enterprise Resource Planning (ERP) D. Event-driven architecture (EDA) 77. This provides a comprehensive method for integrating manual and automated internal processes, applications, and systems, as well as integration to external partners and services. A. Application Programming Interface (API) B. Business Process Management (BPM) C. Enterprise Resource Planning (ERP) D. Event-driven architecture (EDA) 78. Primary activities of the value chain include A. Accounting B. human resources C. Procurement D. Production 79. Supporting activities of the value chain include A. Accounting B. Marketing C. Production D. Sales 80. Information technology (IT) has been able to create additional value by A. reducing costs B. improving quality C. balancing the cost and timeliness of value activities D. all of the above 81. Which of the following statements is false? A. Value chain activities need to be closely coordinated. B. Primary value chain activities include marketing and sales. C. An organization's value chain is the only component of the value system. D. None of the statements are false. 82. The correct sequence of elements leading to an "available to promise" (ATP) is A. item is not committed to another customer, item is on shelf, determine pricing, check customer credit limit B. item is on shelf, determine pricing, item is not committed to another customer, check customer credit limit C. item is on shelf, item is not committed to another customer, check customer credit limit, determine pricing D. item is on shelf, item is not committed to another customer, determine pricing, check customer credit limit 83. The four Ws of capturing data do not include A. Who B. What C. Why D. When 84. A basic unit of data such as a letter, number, or special character is known as a A. Character B. Field C. Record D. none of the above 85. A collection of related characters that comprise an attribute such as a customer number or name is known as a A. Character B. Field C. Record D. none of the above 86. A collection of related data fields pertaining to a particular entity or event is known as a A. Character B. Field C. Record D. none of the above 87. The correct sequence of events for entering a customer order is A. edit order, record sales order, update inventory, notify warehouse B. record sales order, edit order, update inventory, notify warehouse C. notify warehouse, edit order, record sales order, update inventory D. edit order, notify warehouse, record sales order, update inventory 88. Steps in the sales and distribution process include all of the following except A. order entry B. shipment C. receiving D. billing 89. Steps in the materials management process include all of the following except A. creating the purchase order B. shipment C. receiving D. recording the vendor invoice 90. The module plays a central role in the SAP system by collecting business events from other modules. A. human resources B. controlling and profitability analysis C. financial accounting D. customer relationship management 91. The module of the SAP system handles internal accounting including cost center accounting, activity-based accounting, and budgeting. A. human resources B. controlling and profitability analysis C. financial accounting D. customer relationship management 92. The module of the SAP system handles payroll processing. A. human resources B. controlling and profitability analysis C. financial accounting D. customer relationship management 93. Which of the following is included in the first step in the order-to-cash process? A. sales order processing B. responding to customer inquiries C. pick and pack D. billing 94. What is the correct sequence of the order-to-cash process? A. sales order processing; pick and pack; shipping; billing; payment; responding to customer inquiries B. sales order processing; responding to customer inquiries; pick and pack; shipping; billing; payment C. sales order processing; pick and pack; billing; shipping; payment; responding to customer inquiries D. responding to customer inquiries; sales order processing; pick and pack; shipping; billing; payment 95. What is the first step in the purchase-to-pay process? A. purchase order processing B. pick and pack C. requirements determination D. goods receipt 96. What is the correct sequence of the purchase-to-pay process? A. purchase order processing; goods receipt; invoice verification; payment processing; requirements determination B. requirements determination; purchase order processing; goods receipt; invoice verification; payment processing C. purchase order processing; requirements determination; goods receipt; invoice verification; payment processing D. purchase order processing; requirements determination; invoice verification goods receipt; payment processing 97. integrate the business process functionality and information from all of an organization's functional areas, such as marketing and sales, cash receipts, purchasing, cash disbursements, human resources, production and logistics, and business reporting (including financial reporting). 98. are software packages that can be used for the core systems necessary to support enterprise systems. 99. software builds and maintains an organization's customer-related database. 100. software allows an organization's customers to complete an inquiry, perform a task (including sales), or troubleshoot problems, without the aid of an organization's employees. 101. software automates sales tasks such as order processing, contact management, inventory monitoring, order tracking, and employee performance evaluation. 102. software helps plan and execute the steps in an organization's supply chain including demand planning; acquiring inventory; and manufacturing, distributing, and selling the product. 103. software manages the interactions with the organizations that supply the goods and services to an enterprise. 104. software manages product data during a product's life, beginning with the design of the product, continuing through manufacture, and culminating in the disposal of the product at the end of its life. 105. is the dominant player in the ERP market for large businesses. 106. includes integration of business processes, software, standards, and hardware to link two or more systems together allowing them to act as one. 107. The approach combines modules from various vendors to create an information system that better meets an organization's needs than a standard ERP system. 108. A(n) is a means for connecting to a system or application provided by the developer of that application. 109. usually includes a design environment for modeling and documenting business processes. This is often integrated with the process engine to support iterative design and implementation efforts for maximum process agility 110. is an approach to designing and building enterprise systems in which business events trigger messages to be sent by middleware between independent software modules that are completely unaware of each other. 111. is communications-broker software that uses standardized protocols to let event-driven applications communicate in a less expensive manner than can the tightly coupled, synchronous EAI platforms. 112. Primary activities of the include activities directly involved with marketing, producing, selling, and delivering the product or service to the customer. 113. The of the value chain include functions such as moving raw materials into and around the organization, producing and delivering goods to the customer, and performing services such as installation and after-sales support. 114. The of the value chain are those that provide infrastructure and include functions such as procurement, information technology, human resources and accounting. 115. Telling the customer when the item will be received is known as . 116. A(n) is a basic unit of data such as a letter, number, or special character. 117. A(n) is a collection of related characters that comprise an attribute, such as a customer number or name. 118. A(n) is a collection of related data fields pertaining to a particular entity or event. 119. The existence of the customer record, including the , providesthe basic authorization required to accept and record the customer order. 120. The process includes the events surrounding the sale of goods to a customer, the recognition of revenue, and the collection of the customer payment. 121. The process includes events surrounding the purchase of goods from a vendor, the recognition of the cost of those goods, and the payment to the vendor 122. are older systems that may exist in an organization when a newer system, such as an ERP, is installed. 123. Business events are "pushed" immediately and simultaneously to all interested parties in architecture. 124. The four Ws of capturing data are , , , and . 125. Edit order, record sales order, update inventory, notify warehouse is the sequence of events for entering a(n) . 126. The steps in the process include creating the purchase order, receiving the goods and services, recording the vendor invoice 127. The module that handles internal accounting including cost center accounting, activity based accounting, and budgeting is . 128. The module that handles payroll processing is . 129. The first step in the order-to-cash process is . 130. The first step in the purchase-to-pay process is . 131. include any meaningful change in the state of an enterprise, such as creating a new employee record, submitting a purchase order to a vendor, receiving a payment from a customer, picking goods from a warehouse and delivering them to the shipping department, and revaluing inventory. 132. Third-party modules are connected to the ERP system using , a software product that connects two or more separate applications or software modules. 133. Define enterprise resource planning (ERP) systems and give some examples of common ERP add-on modules. 134. What are the primary activities of the value chain and what are some of the main functions included in the value chain? 135. List and describe the 6 steps in the order-to-cash process. 136. List and describe the 5 steps in the purchase-to-pay process. 137. Describe 5 of the pros of an enterprise system. 138. Describe 3 of the cons of an enterprise system. 139. Why might a firm decide to implement only certain modules in an ERP system rather than a complete implementation? 140. Why must an organization expect the implementation of an ERP to disrupt operations? 141. Describe and explain these concepts and their relationship to one another: enterprise application integration, middleware, application programming interface, event-driven architecture, enterprise services bus. Chapter 2--Enterprise Systems Key 1. TRUE 2. FALSE 3. TRUE 4. FALSE 5. TRUE 6. FALSE 7. TRUE 8. FALSE 9. TRUE 10. TRUE 11. TRUE 12. FALSE 13. TRUE 14. FALSE 15. TRUE 16. TRUE 17. TRUE 18. TRUE 19. FALSE 20. TRUE 21. TRUE 22. TRUE 23. TRUE 24. TRUE 25. FALSE 26. TRUE 27. FALSE 28. TRUE 29. TRUE 30. FALSE 31. FALSE 32. FALSE 33. FALSE 34. FALSE 35. TRUE 36. TRUE 37. FALSE 38. TRUE 39. TRUE 40. TRUE 41. TRUE 42. FALSE 43. TRUE 44. FALSE 45. TRUE 46. FALSE 47. TRUE 48. TRUE 49. FALSE 50. TRUE 51. TRUE 52. FALSE 53. FALSE 54. B 55. D 56. A 57. B 58. C 59. C 60. D 61. A 62. B 63. C 64. D 65. C 66. A 67. B 68. D 69. C 70. B 71. D 72. C 73. B 74. D 75. B 76. D 77. B 78. D 79. A 80. D 81. C 82. D 83. C 84. A 85. B 86. C 87. A 88. C 89. B 90. C 91. B 92. A 93. B 94. D 95. C 96. B 97. Enterprise systems 98. Enterprise resource planning (ERP) systems or ERP systems or Enterprise resource planning systems 99. Customer relationship management (CRM) or CRM or Customer relationship management 100. Customer self-service (CSS) or CSS or Customer self-service 101. Sales force automation (SFA) or SFA or Sales force automation 102. Supply chain management (SCM) or SCM or Supply chain management 103. Supplier relationship management (SRM) or SRM or Supplier relationship management 104. Product life-cycle management (PLM) or PLM or Product life-cycle management 105. SAP 106. Enterprise application integration (EAI) or EAI or Enterprise application integration 107. best-of-breed 108. Application Programming Interface (API) or API or Application Programming Interface 109. Business process management (BPM) or BPM or Business process management 110. Event-driven architecture (EDA) or EDA or Event-driven architecture 111. Enterprise Services Bus (ESB) or ESB or Enterprise Services Bus 112. value chain 113. primary activities 114. supporting activities 115. available to promise (ATP) or ATP or available to promise 116. character 117. field 118. record 119. credit limit 120. order-to-cash 121. purchase-to-pay 122. Legacy systems 123. event-driven 124. who, what, where, when 125. customer order or sales order 126. materials management (MM) or MM or material management or purchase-to-pay 127. controlling (CO) and profitability analysis (PA) or controlling (CO) or CO or CO/PA or controlling and profitability analysis 128. human resources (HR) or HR or human resources 129. presale activities or responding to customer inquiries 130. requirements determination 131. Business events 132. middleware 133. Enterprise resource planning (ERP) systems are software packages that can be used for the core systems necessary to support enterprise systems. ERP products are designed to offer integration of virtually all of an organization's major business functions. Examples of common ERP add-on modules include customer relationship management (CRM) software; customer self-service (CSS) software; sales force automation (SFA) software; supply chain management (SCM) software; product lifecycle management (PLM) software; and supplier relationship management (SRM) software. 134. The primary activities of the value chain include those directly involved with marketing, selling, producing and delivering the product or service. This includes functions such as moving raw materials into and around the organization, producing and delivering the products or services to the customer, performing services such as installation and after sales support. 135. 1. Pre-sales activities including responding to customer inquiries and RFQs. 2. Sales order processing which includes capturing and recording customer orders. 3. Pick and pack which includes picking the goods from the shelf in the warehouse and packing the goods for shipment. 4. Shipping the goods to the customer which includes selecting the appropriate carrier, recording the reduction in inventory, recording cost of goods sold. 5. Billing which includes preparing the customer invoice, recording sales, and recording accounts receivable. 6. Payment which includes recording cash receipts, updating cash and accounts receivable. 136. 1. Requirements determination which includes preparing the purchase requisition. 2. Purchase order processing which includes preparing and recording purchase orders. In an enterprise system where RFQs are used, it also includes analyzing vendor quotations. 3. Goods receipt which includes comparing the amount ordered to the amount received. 4. Invoice verification which includes receiving the invoice making a three way match of the purchase order, the receipt, and the vendor invoice and recording accounts payable. 5. Payment processing which includes preparing and recording cash disbursements and updating the cash and accounts payable accounts. 137. The answer should include a description of any 5 of the following: Single database Integrated system Process orientation (versus function orientation) Standardization of business processes and data, easier to understand across the organization Faster business processes Timely information Better financial management One face to the customer Reduced inventory Improved cash management Productivity improvement, reduced personnel Full and accurate financial disclosures Improved budgeting, forecasting, and decision support Seamless integration and accessibility of information across the organization Catalyst for reengineering old, inefficient business processes 138. The answer should include a description of any 3 of the following: Centralized control versus decentralized empowerment Inability to support traditional business processes that may be best practices for that organization Loss of flexibility in rapidly adapting to desired new business processes in the post-implementation period Increased complexity of maintaining security, control, and access permissions for specific information embedded in central database The rigidity of "standardization" can impede creative thinking related to ongoing business process improvements 139. The answer should include such items as: Cost considerations Implementing additional modules one at a time or on an as needed basis with additional modules added at a later time There may be legacy systems that they do not want to change The firm may want to add on other modules from a combination of ERP vendors using enterprise application integration 140. Successful implementation of an ERP requires that many business processes be reengineered. Once done, everything is different. If the organizational culture is not responsive to the changes, many problems can arise. 141. Enterprise application integration (EAI) is an approach to connecting together multiple pieces of an enterprise system and/or connecting the enterprise systems of different organizations. Middleware is a software product that connects two or more separate applications or software modules in this approach. An Application Programming Interface (API) is a type of middleware that is a means for connecting to a system or application provided by the developer of that application. In contrast, event-driven architecture is an alternative approach to integration whereby loosely coupled applications react intelligently to changes in conditions and launch several responses rather than waiting to be called into action. Communications-broker software called Enterprise Services Bus (ESB) uses standardized protocols to let event-driven applications communicate in a less-expensive manner than can the tightly-coupled, synchronous EAI platforms. Chapter 3--Electronic Business (E-Business) Systems Student: 1. E-Business is the application of electronic networks (including the Internet) to exchange information and link business processes among organizations and individuals. True False 2. Standing data is relatively permanent portions of master data. True False 3. Adding, deleting, or replacing standing data is called transaction processing. True False 4. Master data are repositories of relatively permanent data maintained over an extended period of time. True False 5. Data maintenance refers to the recording of business event data and transactions. True False 6. Information processing includes data processing functions related to accounting events, internal operations and financial statement preparation. True False 7. Immediate mode is the data processing mode in which there is delay between data processing steps. True False 8. Processes that include distribution, manufacturing, and accounting operations are front office processes. True False 9. Periodic mode is the data processing mode in which there can be a delay between data processing steps. True False 10. Batch processing is the aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system. True False 11. A device that is not directly connected to the central computer or network is referred to as an online device. True False 12. In an online transaction entry (OLTE) system, use of data entry devices allows business event data to be entered directly into the information system at the time and place that the business event occurs. True False 13. A computer configuration in which certain equipment is directly connected to the computer is said to be online. True False 14. Online real-time (OLRT) systems gather business event data at the time of occurrence, update the master data essentially instantaneously, and provide the results arising from the business event within a very short amount of time. True False 15. Batch mode is the data processing mode in which there is little or no delay between any two data processing steps. True False 16. Client/server technology is the physical and logical division between user-oriented application programs that are run at the client (user) level and the shared data that must be available through the server (i.e. separate computer containing a database that handles centrally shared activities. True False 17. Value-added networks (VANs) are communication networks that link together several different local user machines with printers, databases, and other shared devices. True False 18. Local area networks (LANs) are communication networks that link up distributed users and local networks into an integrated communication network. True False 19. The Internet is a massive interconnection of computer networks worldwide that enables communication between dissimilar technology platforms. True False 20. Web browsers are software programs designed specifically to allow users to view the various documents and data sources available on the Internet. True False 21. Cloud computing is the use of the Internet to provide scalable services, such as software, and resources, such as data storage, to users. True False 22. SPAM is unsolicited unwanted mail. True False 23. A type of intranet, which has been extended to limited external access, is referred to as an extranet. True False 24. E-mail is the electronic transmission of nonstandardi