SAINT JOSEPH COLLEGE

FINAL EXAM
COMPUTER 4
Name:
Section:

I.

Date:
ID No.:

Multiple choice. Select the best answer for each of the following questions. Shade only one
answer. AVOID ERASURES. Answers with erasures may render INVALID.
1. The premier buyer and seller of vintage action figures in the San Francisco Bay area is
Vini Vidi Geeky. Since 1996, the owner, Glamdring Elfrhrall, has leveraged computer
technology to provide a superior level of customer service. In particular, the stores
database system was designed to make detailed information about each individual
action figures characteristics easily accessible. Price information and condition are also
provided for each inventory item. In this database, each action figure would appear as a
(an)

o Entity
o Field

o Attribute
o Record

2. Which of the following is NOT a transaction cycle?

o Expenditure
o General ledger and

o Human Resources
o Revenue

reporting
3. Which of the following is a true statement?

o Organization culture directly influences business strategy, but not AIS.

o AIS directly influences information technology, but not business strategy.
o Business strategy directly influences AIS, but not information technology.
o Information technology directly influences organizational culture, but not
business strategy.
4. Changing an employees hourly wage rate would be recorded in which file?

o Payroll master file

o Employment master file
o Payroll transaction file

o Employee transaction
file

5. A student manually prepared a homework assignment and then turns it in to her

teacher. Which of the following diagrams represents this activity?

o
o
o
o
6. Many modern accounting software packages offer separate transaction cycle modules.
What is the reason for this?

o The nature of a given transaction cycle is the same irrespective of the type of
organization.

o A properly designed AIS does not use the concept of separate business
transaction cycles to process transactions.

o Most businesses do not need the revenue cycle module as part of their AIS.
1

o Every organization does not need to implement all of the available transaction
cycle modules.
7. An ERP system might facilitate the purchase of direct materials by all of the following
EXCEPT

o Selecting the best supplier by comparing bids.

o Preparing a purchase order when inventory falls to reorder point
o Routing a purchase order to a purchasing agent for approval.
o Communicating a purchase order to a supplier.
8. In a data flow diagram of the customer payment process, update receivables will
appear above or in

o None of these.
o Two horizontal lines.

o A circle.
o A square.

9. Boy Lili is in charge of the mail room at SJC. Every Friday morning he receives a report
via email that summarizes the number of outgoing and incoming pieces of mail by
source and destination department. Every Friday afternoon, Boy deletes the report
without reading it because it has no bearing on mail room operations. Which of the
following characteristics of useful information is absent in the situation described
above?

o Relevant
o Reliable

o Complete
o Timely

10. A chart of accounts is an example of

o Group codes.
o Sequence codes.

o Mnemonic codes.
o Block codes.

11. The primary objective of accounting is to

o Implement strong internal controls.

o Ensure the profitability of an organization.
o Prepare financial statements.
o Provide useful information to decision makers.
12. Who of the following would not be involved in the revenue cycle?

o Accounts payable clerk

o Credit manager

o Cashier
o Customer

13. The value of information can best be defined as

o How relevant it is.

o The extent to which it maximizes the value chain.
o The benefits produced by possessing and using the information minus the cost
of producing it.

o How useful it is to decision makers.

14. When the sum of all entries in the subsidiary ledger equals the balance in the
corresponding general ledger account, it is assumed that

o The recording processes were accurate.

o Adjusting entries are not required.
o All source documents were recorded.
o No errors exist in the subsidiary ledger.
15. Which statement below regarding the AIS is false?

o The AIS was often just one of the information system used by an organization to
collect and process financial and nonfinancial data.

o The AIS must be able to provide managers with detailed and operational
information about the organizations performance.
2

o Traditionally, most AIS have been designed so that both financial and
operational data are stored in a manner that facilitates their integration in
reports.

o Both traditional financial measure and operational data are required for proper
and complete evaluation of performance.
16. A manual AIS begins with the capture of information from source documents. These
source documents could vary from scraps of paper to notepads or even blackboards.
However, transaction data are most easily and effectively captured if the source
documents are well designed. Which of the following is not an element of a welldesigned source document?

o Prenumber documents
o Use preprinted data to the maximum extent possible
o Group logically related information
o Minimize the use of coded and checkoffs
o Use multiple-part forms to facilitate proper distribution of the data
17. Specific types of duties must be kept separate in order to achieve good internal control.
Which of the following must not be performed by the individual responsible for
receiving cash from the customers?

o Preparing trial balances

o Authorizing the receipt of goods
o Updating shipping records for goods sold
o Writing off uncollectible customer accounts
o Managing the purchases journal
18. Which of the following must not be performed by the person responsible for custody of
inventory?

o Receiving cash from customers

o Paying cash to vendors
o Preparing a trial balance
o Authorization to move inventory to shipping
o Authorization to write off bad debt
19. Peter Myra and Associated operate a decorative stone and brick wholesale operation.
Much of their inventory is stored outdoors. They have decided to put up a fence to
safeguard their inventory. This would be considered a__________.

o Detective control
o Prescriptive control
o Preventative control

o Corrective control
o None of these

20. Threats to an accounting information system come from many sources. The four
primary types of threats have been identified. Which of the following is not one of the
four types?

o Intentional acts (computer crimes)

o Unintentional acts
o Natural and political disasters
o Software errors and equipment malfunctions
o None of the above
21. Within the component of control activities, one would encounter:

o Organizational structure.
o Human resources policies and practices.
3

o Segregation of duties
o Estimates of exposure.
o Managements philosophy.
o All of the above.
22. One element of a good system of internal control involves segregation of duties. Which
of the following sets of duties could be assigned to a single individual?

o Writing checks, receiving checks in the mail, and handling cash

o Writing checks, performing a bank reconciliation, and handling cash
o Approving purchase orders, preparing receiving report, and updating inventory
ledger

o Updating the accounts receivable subsidiary ledgers, updating accounts payable

subsidiary ledgers, and approving write-off of uncollectible accounts

o None of the above be assigned to a single individual

23. When proper segregation of duties has been performed, fraud is less likely to occur.
However segregation of duties can be thwarted through________.

o Reconciliation
o Machine failure
o Collusion

o Confidence
o Exposure
o None of the above

24. What is a hash total?

o The number of documents processed

o The sum of a dollar field
o The number of lines of data entered
o The grand total of all rows and all columns processed
o None of the above
25. Risk assessment evaluated threats to the organization and its data. This assessment
involves a cost-benefit analysis of any control procedure. Suppose that Mara Mako was
evaluating three control procedures to combat the risk of improper approval of vendor
invoices. Mara calculates the exposure at P800, 000. Option A is no control procedure.
This leaves a probability of 10% and can be implemented at no cost. Option B costs P20,
000 and leaves a probability of 6%. Option C costs P28, 000 and leaves a probability of
4%. Implementing both B and C leaves a probability of 2%. What should Mara do?

o Implement option a
o Implement option b
o Implement option c
o Implement option b and c
o None of the above
26. A(n)________is a list of authorized user ID numbers and passwords along with the files
and programs to which each user ID has permission.

o Authenticator
o Access control matrix
o Authentication scheme

o Roll back
o None of the above

27. Maintaining a facility that is ready for quick installation of computer equipment for
emergency use is called maintaining a____________.

o Backup plan
o Hot site
o Cold site

o Warm site
o None of the above
4

28. A check that determines if data entered into field of a record are of the proper type is a
_______check.

o Field
o Capacity
o Validity

o Sign
o Echo
o None of these

29. A check that retrieves and displays information related to a particular data input in
order for the data entry clerk to determine if the correct input has been entered is a
_________.

o Sign check
o Validity check
o Completeness check

o Closed-loop verification
o None of the above

30. Which of the following is not a control that helps preserve the accuracy and
completeness of data processing and stored data?

o Control account reconciliation

o File conversion controls
o Exception reporting
o Data currency checks
o External data reconciliation
o All of the above help preserve the accuracy and completeness of data
processing and stored data.
31. Which identification device evaluates physical characteristics?

o Possession

o Knowledge

identification

identification

o Biometric identification

o None of the above

32. What is the basic document created in the billing process?

o Picking ticket
o Sales invoice
o Packing slip

o Bill of lading
o None of the above

33. If a company sells to customers on account, the company has to send statements to
customers requesting payment. The format of the bill and the method of applying
payments to purchases depend on the method chosen for maintaining accounts
receivable. If a company applies payments made by customers to specific purchases,
then the company must be using the_________method.

o Cycle
o Postpurchase
o Balance forward

o Open invoice
o None of the above
o Monthly statement

34. Which document is used by warehouse personnel to assemble the goods for shipment?

o Sales order
o Invoice
o Freight bill

o Picking ticket
o Bill of lading
o None of the above

35. The act of arranging with the bank to receive and deposit customer payments, along
with reporting remittances to the company, constitutes a ___________.

o Sweet deal
o Funds transfer
o Lockbox

o Data interchange
o Dedicated deposit
o None of the above
5

36. Which of the following process in a DFD would interact with the inventory data store?

o Sales order entry

o Shipping
o Billing

o Cash Collections
o Two of the above
o Three of the above

37. Threats during the sales order entry process include:

o Incomplete or inaccurate customer orders.

o Customer failure to pay
o Wrong inventory shipped
o The billing department invoices for the wrong amount
o Answers a and b
o None of the above
38. Segregation of duties is most important when dealing with cash. Which of the following
activities violates proper segregation of duties?

o Issues a credit memo and records it to the customers account

o Opens the mail and posts the payments to the customers account
o Opens the incoming mail and sends out the customer statements
o All of the above violates proper segregation of duties
o Answer a and b violate segregation of duties.
o None of the above violate proper segregation of duties
39. The economic order quantity approach determines:

o The quantity to order.

o The quantity to keep on hand.
o The quantity at which to give price breaks.
o Two of the above.
o All of the above.
o None of the above.
40. Which of the following inventory approaches best allows for products with short life
cycles and unpredictable patterns of demand?

o EOQ
o JIT
o MRP

o Two of the above

o All of the above
o None of the above

41. Which of the following documents contains the departmental authorization for a
purchase?

o Purchase order
o Blanket purchase order
o Purchase requisition

o Receiving report
o None of the above

42. An imprest fund is

o Is money that has been set aside for impending large purchases.
o Is controlled very tightly due to the potential for large losses.
o Technically violates the principle of segregation of duties.
o Is released to vendors, only when voucher package is complete.
o Two of the above.
o Three of the above.
6

43. The receiving functions responsibilities include:

o Determining quantities of goods needed.

o Preparing a packing slip.
o Deciding whether to accept a delivery.
o Verifying the quantity and quality of goods delivered
o Two of the above
o Three of the above
44. Which of the following is a binding contract once accepted by the recipient?

o A purchase order
o A purchase requisition
o A vendor invoice

o A packing slip
o Two of the above
o None of the above

45. ISO 9000:

o Addresses product

o Addresses output

quality

volume

o Addresses process

o Two of the above

o All of the above

quality
II.

1.

Problem Solving. Show your appropriate solutions in details. Answers without appropriate
solutions are INVALID. Double underline your final answer. Write your solutions at the back ( 5pts
each)
RBM Company manufactures electric drills to the exacting specifications of various customers. During
April 2015, Job 337 for the production of 1,100 drills was completed at the following cost per unit:
Direct materials
Direct labor
Applied factory overhead
Total

P12
9
14
P35

Final inspection of Job 337 disclosed 50 defective units and 100 spoiled units. The defective drills were
reworked at a total cost of P700, and the spoiled drills were sold to a jobber for P1,700. What would be
the unit cost of the good units produced on Job 337?
Answer:
Original production of 1,100 (1,100 x 35)
P38, 500
Reworking of defective drills
700
Sale of defective units
(1,700)
Total of producing goods units
37,500

Divided by good units produce

Unit cost of the good units produced on Job 403
2.

1,000
P 37.50

RedHorse Co. manufactures products A and B from a joint process. During October, 2015, sales values at
the point of split-off were P50,000 for 4,000 units of product A and P100,000 for 12,000 units of product
B. Selling prices per unit are P25 and P14.50, respectively, for product A and for product B.
Assume that the joint cost allocated to product A by using the market value method was P35, 000. The
production cost of product B would be reported at:

Product
A
B

MV at
Split-off pt.
P 50,000
100,000

Join Costs + Further Process

Cost
P35, 000
70,000
P74, 000**

70%*
70%

*P35, 000P50, 000 = 70%

**Ultimate Market value or final sales value: P14.50 x 12,000
Less: Market value at split-off point for Product B
Further processing cost of product B
3.

= Total Cost

P144, 000

P174, 000
100,000
P 74,000

JPM Co., at normal capacity, operates at 600,000 labor hours with standard labor rate of 20 per hour.
Variable is applied at the rate of P12 per labor hour. Four units should be completed in an hour.

Last year, 1,350,000 units were produced using 300,000 labor hours. All labor hours were paid at the
standard rate, and actual overhead cost consisted of P3, 738,000 for variable items and P3, 000,000 fixed
items.
The total labor and overhead costs saved, by producing at more than standard, amounted to

Actual units produced

Divided by: Units per hour
Standard hours
Less: Actual hours
Difference in hour favorable
Multiplied by: Labor and Overhead Rate (P20+12)
Total labor and overhead costs savings

P1, 350,000
4
P 337,500
300,000
37,500
P
32
P1, 200,000