SOLUTION Manual for y y
Accounting Information Systems 9th
y y y y
Edition by Hall y y
CHAPTER 2 y
INTRODUCTION TO TRANSACTION PROCESSING
y y y
REVIEWyQUESTIONS
1. Theyexpenditureycycle,yconversionycycle,yandyrevenueycycle.
2. Purchases/accountsypayableysystem,ycashydisbursementsysystem,yfixedyassetsy
system,yandypayrollysystem.
3. Theyphysicalycomponentyincludesytheyacquisitionyofygoods,ywhileytheyfinancialyco
mponentyincludesytheyrecognitionyofyayliabilityyowedytoytheysupplieryandytheytransf
eryofytheypaymentytoytheysupplier.
4. Productionysystemyandycostyaccountingysystem.
5. Salesyorderyprocessingysystemyandycashyreceiptsysystem.
6. Sourceydocuments,yproductydocuments,yandyturnaroundydocuments.
7. Specialyjournalsyandytheygeneralyjournal.
, Chaptery2yPagey37
8. Aygeneraly journaly isy usedy toy recordy nonrecurringy andy infrequenty transactions.
Oftentimes,ygeneralyjournalsyareyreplacedywithyayjournalyvoucherysystem.yTheyjo
urnalyvoucheryisyusedytoyrecordyaysingleynonrecurringyandyinfrequentytransaction,
yandyityisyusedyasyayspecialysourceydocumentyforytheytransaction.
Theytotalyofyjournalyvouchersyprocessedyisyequivalentytoytheygeneralyjournal.
9. Generalyledgeryandysubsidiaryyledger.
10. Aytrailythatyallowsytheyauditorytoybeginywithyaysummaryytotalyfoundyonytheyfinancialyst
atementsyandytrackyitybackytoytheyindividualytransactionsythatymake
upythisytotal.yConversely,yanyauditoryshouldybeyableytoytrackytransactionsytoytheiryfi
nalyimpactyonytheyfinancialystatements.
11. Theyconfirmationyprocessyentailsyselectingycustomersyandycontactingythemytoyde
termineywhetherytheytransactionsyrecordedyinytheyfinancialystatementsyactuallyytoo
kyplaceyandyareyvalid.
12. Masteryfiles,ytransactionyfiles,yreferenceyfiles,yandyarchiveyfiles.
13. Mastery filesy correspondy toy generaly ledgery accountsy andy subsidiaryy ledgers.
Examplesyincludeyaccountsyreceivableyandycustomerysubsidiaryyaccounts,yacco
untsypayableyandyvendorysubsidiaryyaccounts,yinventory,yetc.yTransactionyfilesyc
orrespondytoygeneralyandyspecialyjournals.yExamplesyincludeytheygeneralyjournal
,ysalesyjournals,ycashyreceiptsyjournals,ypayrollyjournals,yetc.yReferenceyfilesyincl
udeylistsyofyvendors,ydelinquentycustomers,ytaxytables,ysalesytaxyrates,ydiscountyr
ates,ylistsyofycustomersygrantedyspecificydiscounts,yetc.yArchiveyfilesyareytypicallyy
composedyofyrecordsythatyhaveybeenyprocessedybutyareyretainedyforytheiryhistory.
yExamplesyincludeypayrollytransactions,ysalesytransactions,yetc.
, Chaptery2yPagey38
14. Theydigitalyauditytrail,ylikeytheypaperytrail,yallowsyusytoytraceytransactionsyfromytheyfi
nancialystatementybalanceybackytoytheyactualytransactionysoyweymay:y(1)ycompar
eybalances,y(2)yperformyreconciliations,y(3)yselectyandytraceysamplesyofyentries,ya
ndy(4)yidentify,ypull,yandyverifyyspecificytransactions.
15. Cardinalityyreflectsynormalybusinessyrulesyasywellyasyorganizationalypolicy.yForyin
stance,ythey1:1ycardinalityyinytheyfirstyexampleyinyFigurey2-
16ysuggestsythatyeachysalespersonyinytheyorganizationyisyassignedyoneyautomobil
e.yIfyinsteady theyorganization’sypolicyywereytoyassignyaysingleyautomobileytoyoneyo
rymoreysalespeopleythatyshareyit,ythisypolicyywouldybeyreflectedybyyay1:Myrelations
hip.
16. Entityyrelationshipydiagramsyrepresentytheyrelationshipybetweenyentitiesy(resourc
es,yevents,yandyagents)yinyaysystem.yDataflowydiagramsyrepresentytheylogicalyele
mentsy(i.e.ywhatyisybeingydone)yofyaysystemybyyillustratingyprocesses,ydataysource
s,ydatayflows,yandyentities.ySystemyflowchartsyrepresentytheyphysicalyelementsybei
ngyusedy(i.e.,yhowytheytasksyareybeingyconducted)ybyyillustratingytheyrelationshipyb
etweenyinputysources,yprogram,yandyoutputyproducts.ySystemyflowchartsycanyals
oyrepresentybothytheylogicalyandyphysicalyelementsyofymanualysystemsyandyalsoyill
ustrateytheypreparationyandyhandlingyofydocuments.
17. Cardinalityyrefersytoytheynumericalymappingybetweenyentityyinstances,yandyityisyay
matteryofyorganizationypolicy.yTheyrelationshipycanybeyone-to-
one,yonetomany,yorymany-to-many.
, Chaptery2yPagey39
18. Any entityy relationshipy (ER)y diagramy isy ay documentationy techniquey usedy toyre
presentytheyrelationshipybetweenyentities.yOneycommonyuseyforyERydiagramsyisyt
oymodelyanyorganization’sydatabase,ywhichyweyexamineyinydetailyinyChaptery9.
19. Entitiesyareyphysicalyresourcesy(automobiles,ycash,yoryinventory),yeventsy(orderi
ngyinventory,yreceivingycash,yshippingygoods),yandyagentsy(salesperson,ycustom
er,yoryvendor)yaboutywhichytheyorganizationywishesytoycaptureydata.
20. Batchyprocessingyoccursywhenysimilarytransactionsyareyaccumulatedyoverytimeya
ndyprocessedytogether.yReal-
timeyprocessingycapturesyeachyeventyorytransactionyandyprocessesyitybeforeyeng
agingyinyanotherytransaction.yIfytransactionsyareyindependentyofyoneyanother,ysuc
hyasytheyprocessingyofydailyycashyreceipts,ythenybatchyprocessingyisyappropriate.y
Ifytransactionsyareydependentyonyoneyanother,ysuchyasycreditysales,yticketysales,ye
tc.,ythenyrealtimeyprocessingyisymoreyappropriate.
21. Ayflat-fileymodelyisyoneyinywhichyindividualydatayfilesyareynotyrelatedytoyotheryfiles.
Endyusersyinythisyenvironmentyownytheirydatayfilesyratherythanyshareythemywithyot
heryusers.yDatayprocessingyisythusyperformedybyystandaloney applicationsyrathery
thanyintegratedysystems.
22. No.yAyDFDyshowsywhichytasksyareybeingyperformed,ybutynotywhoyperformsy them.
Itydepictsytheylogicalysystem.
23. Yes,yAyflowchartydepictsytheyphysicalysystemyandyillustratesywhatytypeyofyandywh
ereyaytaskyisyperformedyandywhoyisyperformingyit.
Accounting Information Systems 9th
y y y y
Edition by Hall y y
CHAPTER 2 y
INTRODUCTION TO TRANSACTION PROCESSING
y y y
REVIEWyQUESTIONS
1. Theyexpenditureycycle,yconversionycycle,yandyrevenueycycle.
2. Purchases/accountsypayableysystem,ycashydisbursementsysystem,yfixedyassetsy
system,yandypayrollysystem.
3. Theyphysicalycomponentyincludesytheyacquisitionyofygoods,ywhileytheyfinancialyco
mponentyincludesytheyrecognitionyofyayliabilityyowedytoytheysupplieryandytheytransf
eryofytheypaymentytoytheysupplier.
4. Productionysystemyandycostyaccountingysystem.
5. Salesyorderyprocessingysystemyandycashyreceiptsysystem.
6. Sourceydocuments,yproductydocuments,yandyturnaroundydocuments.
7. Specialyjournalsyandytheygeneralyjournal.
, Chaptery2yPagey37
8. Aygeneraly journaly isy usedy toy recordy nonrecurringy andy infrequenty transactions.
Oftentimes,ygeneralyjournalsyareyreplacedywithyayjournalyvoucherysystem.yTheyjo
urnalyvoucheryisyusedytoyrecordyaysingleynonrecurringyandyinfrequentytransaction,
yandyityisyusedyasyayspecialysourceydocumentyforytheytransaction.
Theytotalyofyjournalyvouchersyprocessedyisyequivalentytoytheygeneralyjournal.
9. Generalyledgeryandysubsidiaryyledger.
10. Aytrailythatyallowsytheyauditorytoybeginywithyaysummaryytotalyfoundyonytheyfinancialyst
atementsyandytrackyitybackytoytheyindividualytransactionsythatymake
upythisytotal.yConversely,yanyauditoryshouldybeyableytoytrackytransactionsytoytheiryfi
nalyimpactyonytheyfinancialystatements.
11. Theyconfirmationyprocessyentailsyselectingycustomersyandycontactingythemytoyde
termineywhetherytheytransactionsyrecordedyinytheyfinancialystatementsyactuallyytoo
kyplaceyandyareyvalid.
12. Masteryfiles,ytransactionyfiles,yreferenceyfiles,yandyarchiveyfiles.
13. Mastery filesy correspondy toy generaly ledgery accountsy andy subsidiaryy ledgers.
Examplesyincludeyaccountsyreceivableyandycustomerysubsidiaryyaccounts,yacco
untsypayableyandyvendorysubsidiaryyaccounts,yinventory,yetc.yTransactionyfilesyc
orrespondytoygeneralyandyspecialyjournals.yExamplesyincludeytheygeneralyjournal
,ysalesyjournals,ycashyreceiptsyjournals,ypayrollyjournals,yetc.yReferenceyfilesyincl
udeylistsyofyvendors,ydelinquentycustomers,ytaxytables,ysalesytaxyrates,ydiscountyr
ates,ylistsyofycustomersygrantedyspecificydiscounts,yetc.yArchiveyfilesyareytypicallyy
composedyofyrecordsythatyhaveybeenyprocessedybutyareyretainedyforytheiryhistory.
yExamplesyincludeypayrollytransactions,ysalesytransactions,yetc.
, Chaptery2yPagey38
14. Theydigitalyauditytrail,ylikeytheypaperytrail,yallowsyusytoytraceytransactionsyfromytheyfi
nancialystatementybalanceybackytoytheyactualytransactionysoyweymay:y(1)ycompar
eybalances,y(2)yperformyreconciliations,y(3)yselectyandytraceysamplesyofyentries,ya
ndy(4)yidentify,ypull,yandyverifyyspecificytransactions.
15. Cardinalityyreflectsynormalybusinessyrulesyasywellyasyorganizationalypolicy.yForyin
stance,ythey1:1ycardinalityyinytheyfirstyexampleyinyFigurey2-
16ysuggestsythatyeachysalespersonyinytheyorganizationyisyassignedyoneyautomobil
e.yIfyinsteady theyorganization’sypolicyywereytoyassignyaysingleyautomobileytoyoneyo
rymoreysalespeopleythatyshareyit,ythisypolicyywouldybeyreflectedybyyay1:Myrelations
hip.
16. Entityyrelationshipydiagramsyrepresentytheyrelationshipybetweenyentitiesy(resourc
es,yevents,yandyagents)yinyaysystem.yDataflowydiagramsyrepresentytheylogicalyele
mentsy(i.e.ywhatyisybeingydone)yofyaysystemybyyillustratingyprocesses,ydataysource
s,ydatayflows,yandyentities.ySystemyflowchartsyrepresentytheyphysicalyelementsybei
ngyusedy(i.e.,yhowytheytasksyareybeingyconducted)ybyyillustratingytheyrelationshipyb
etweenyinputysources,yprogram,yandyoutputyproducts.ySystemyflowchartsycanyals
oyrepresentybothytheylogicalyandyphysicalyelementsyofymanualysystemsyandyalsoyill
ustrateytheypreparationyandyhandlingyofydocuments.
17. Cardinalityyrefersytoytheynumericalymappingybetweenyentityyinstances,yandyityisyay
matteryofyorganizationypolicy.yTheyrelationshipycanybeyone-to-
one,yonetomany,yorymany-to-many.
, Chaptery2yPagey39
18. Any entityy relationshipy (ER)y diagramy isy ay documentationy techniquey usedy toyre
presentytheyrelationshipybetweenyentities.yOneycommonyuseyforyERydiagramsyisyt
oymodelyanyorganization’sydatabase,ywhichyweyexamineyinydetailyinyChaptery9.
19. Entitiesyareyphysicalyresourcesy(automobiles,ycash,yoryinventory),yeventsy(orderi
ngyinventory,yreceivingycash,yshippingygoods),yandyagentsy(salesperson,ycustom
er,yoryvendor)yaboutywhichytheyorganizationywishesytoycaptureydata.
20. Batchyprocessingyoccursywhenysimilarytransactionsyareyaccumulatedyoverytimeya
ndyprocessedytogether.yReal-
timeyprocessingycapturesyeachyeventyorytransactionyandyprocessesyitybeforeyeng
agingyinyanotherytransaction.yIfytransactionsyareyindependentyofyoneyanother,ysuc
hyasytheyprocessingyofydailyycashyreceipts,ythenybatchyprocessingyisyappropriate.y
Ifytransactionsyareydependentyonyoneyanother,ysuchyasycreditysales,yticketysales,ye
tc.,ythenyrealtimeyprocessingyisymoreyappropriate.
21. Ayflat-fileymodelyisyoneyinywhichyindividualydatayfilesyareynotyrelatedytoyotheryfiles.
Endyusersyinythisyenvironmentyownytheirydatayfilesyratherythanyshareythemywithyot
heryusers.yDatayprocessingyisythusyperformedybyystandaloney applicationsyrathery
thanyintegratedysystems.
22. No.yAyDFDyshowsywhichytasksyareybeingyperformed,ybutynotywhoyperformsy them.
Itydepictsytheylogicalysystem.
23. Yes,yAyflowchartydepictsytheyphysicalysystemyandyillustratesywhatytypeyofyandywh
ereyaytaskyisyperformedyandywhoyisyperformingyit.
