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Terms Definitions
Data processing cycle The operation performed on data to generate meaningful and relevant data
What are the 4 steps in processing cycle? (1)Data Input (2)Data Storage (3)Data Processing (4)Information output
What are three facets of the data collected? (1)Each activity of interest (2)The resources affected by each activity (3)The people who participate in each activity
Source documents The paper data for each activity, ex: sales order, delivery tickets, etc.
Turn around documents Are company "output" sent to an external party, who adds data to it, and then sends back to the company as an "input document". ex: utility bill
Source data automation Are devices that capture transaction data in machine-readable form at the time and place of their origin. Ex: ATM, POS scanner, bar codes scanners.
What are the three steps in Data input stage? (1) Capture transaction data and enter them into the system.
(2) Make sure the data captured are accurate and complete. (use well-designed turn around document, data entry screens, pre-numbered documents)
(3) Make sure the company policies are follow.
General Ledger Contains summary-level data for every asset, liability, equity, revenue and expense account. They are Control Account.
Subsidiary Ledger Contains details for any general ledger account with specific names of many individual sub-accounts. ex: AR, Inventory, fixed assets, AP.
Coding Is the systematic assignment of numbers or letters to items to classify and organize them.
Sequence codes Items are number consecutively to account for all items. Ex: pre-numbered checks, invoice and purchase orders.
Block codes Blocks of number reserved for specific categories of data.
Group codes two or more subgroups of digits used to code items, often used in conjunction with block codes
Mnemonic codes Letters and numbers are interspersed in identify an item.
What are the 4 guidelines in better coding system? +Be consistent with its intended use +Allow for growth +Be as simple as possible to minimize cost, facilitate memorization, interpretation and ensure employee acceptance. + Be consistent with organizational structure and across the company's divisions.
Chart of account Is an example of coding, it is a list of numbers assigned to each general ledger account.
General journal is use to record infrequent transactions (loan payment, end-of-period adjusting entries)
Specialized journal Is used to record large numbers of repetitive transactions (sales, cash payment, cash receipts, etc)
Audit Trail Is a traceable path of transaction thru a data processing system from point of origin to final products and vice versa. It is used to check the accuracy and validity of ledger postings.
Entity Is something about which information is stored: employees, inventory items, customers. Each entity has a same set of attributes
Attributes Characteristics of interest: pay rates, addresses, etc.
Field Where data are stored
Record The field containing entity attributes
File Is a group of related records
Master file Stores cumulative information about the organization . Master file is permanent. Individual master file may change frequently.
A transaction file Contains record of individual business transactions that occurs during a period of time. They are not permanent and may not be needed beyond current fiscal period.
Data base A set of interrelated, centrally coordinated files.
What are 4 different types of data processing? CRUD (1)Creating (2)Reading (3)Updating (4)Deleting
Batch processing Updating done periodically
Online, real-time processing Update transaction as it occurs
Online batching processing The combination of the two approaches: Batching processing and Online-real time processing
What are the 3 forms that information is usually represented? (1) A document (2) A report and (3) A query response
(1) A Document A records of transaction and other data.
(2) Reports (1) Are used by employees to control operational activities (2) By manager to make decisions and to formulate business strategies.
(3) Data query Is used to provide the information needed to deal with problems and questions that need quick actions or answer.
ERP - Enterprise Resource Planning System Collect, process and store data for external and operational use. It is an central data base to share information across the business activities .
What advantages does ERP provides? (1) Provide wide, single-view organization's data. Break down barriers between departments and streamline the flow of information
(2) Data input are captured once. Downloading data from one system to another is no longer needed. (3) Management gains greater visibility and greater monitoring capability
(4) Better access control (5) A procedures and reports are standardized across the company
(6) Customer service improved (7) Real orders are received in real time
What are ERP disadvantages? (1)Cost (2)Time=> high risk of project failure (3)Change to business process (4)Complexity (5) Resistance
Which of the following is NOT a step in the data processing cycle?
a. data collection
b. data input
c. data storage
d. data processing
a. data collection (Data collection is a part of data input and is therefore not a step in the data processing cycle.)
All of the information (name, GPA, major, etc.) about a particular student is stored in the same ______.
a. file
b. record
c. attribute
d. field
b. record (A record should include all information maintained by the system about a particular entity, such as a student.)
Which of the following is most likely to be a general ledger control account?
a. accounts receivable
b. petty cash
c. prepaid rent
d. retained earnings
a. accounts receivable (Accounts receivable is typically made up of many individual customer accounts maintained in a subsidiary ledger. The total of all individual customer accounts in the subsidiary ledger is maintained in the accounts receivable control account in the general ledger.)
Which of the following documents is most likely to be used in the expenditure cycle?
a. sales orders
b. credit memo
c. receiving report
d. job time ticket
c. receiving report (A receiving report is an expenditure cycle document that is used to record the receipt of goods from suppliers. Companies pay their suppliers based on the goods received and recorded on the receiving report.)
Which of the following is LEAST likely to be a specialized journal?
a. sales journal
b. cash receipts journal
c. prepaid insurance journal
d. cash disbursements journal
c. prepaid insurance journal (A specialized journal is used to record large numbers of repetitive transactions, and most companies have very few prepaid insurance transactions.)
How does the chart of accounts list general ledger accounts?
a. alphabetical order
b. chronological order
c. size order
d. the order in which they appear in financial statements
d. the order in which they appear in financial statements
Which of the following is NOT an advantage of an ERP system?
a. better access control
b. standardization of procedures and reports
c. improved monitoring capabilities
d. simplicity and reduced costs
d. simplicity and reduced costs (ERP systems are quite complex and costly; they do not offer the advantages of simplicity and reduced costs.)
Records of company data sent to an external party and then returned to the system as input are called ______.
a. turnaround documents
b. source data automation documents
c. source documents
d. external input documents
a. turnaround documents
Recording and processing information about a transaction at the time it takes place is referred to as which of the following?
a. batch processing
b. online, real-time processing
c. captured transaction processing
d. chart of accounts processing
b. online, real-time processing (Online, real-time processing involves processing transactions as they occur.)
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