TRUE/FALSE
1- A reasonableness check determines if a value in one field is reasonable when considered along with data in other fields of the record
2- The black box approach to testing computer applications require a detailed knowledge of the the program logic being tested.
3- Incorrectly recording sales order number 123456 as 124356 is an ex of a transcription error
4- When using the test data method, the presence of multiple error messages indicates a flaw in the preparation of test transactions.
5- Input controls are programmed procedures that perform tests on master file data to ensure they are free from errors.
6- The integrated test facility (ITF) is an automated approach that permits auditors to test an application's logic and controls during its normal operation.
7- The two fundamental components of data structures are organization and access method.
8- When a large portion of the file is to be processed in one operation such as payroll, sequential data structures are an inefficient method of organizing a file.
9- An advantage of using an indexed random file structure is that records are easily added and deleted.
10- The hierarchical database model forces users to navigate between data elements using predefined structured paths.
11- A network model does not allow children files to have multiple parent files.
12- The physical database is an abstract representation of the database.
13- A customer name and an unpaid balance is an ex of a one-to-many relationship.
14- In the relational model, a data element is called a relation.
15- Data normalization groups data attributes into tables in accordance with specific design objectives.
16- Under the database approach, data is viewed as proprietary or owned by users.
17- VSAM file structures are most effective where rapid access to individual records is a priority need.
18- A join builds a new table by creating links.
19- The deletion anomaly is the least important of the problems affecting unnormalized databases.
20 - EAM's allow auditors to identify significant transactions for substantive testing.
21- Generalized audit software packages are used to assist the auditor in performing substantive tests.
22- GAS can be used with simple data structures but not complex structures
23- Logical database design is the foundation of the conceptual design.
24- An entity is any physical thing about which the organization wishes to capture data.
25- The packing slip is also known as the shipping notice.
26- The bill of lading is a legal contract between the buyer and the seller.
27- Another name for the stock release form is the picking ticket.
28- Warehouse stock records are the formal accounting records for inventory.
29- The purpose of the invoice is to bill the customer.
30 - In most large organizations, the journal voucher file has replaced the formal general journal.
31- The cash receipts journal is a special journal.
32- In the revenue cycle, the internal control "limit access" applies to physical assets only.
33- In real-time processing systems, routine credit authorizations are automated.
34- In a computerized accounting system, segregation of functions refers to inventory control, accounts receivable, billing, and general ledger tasks.
35- A written customer purchase order is required to trigger the sales order system.
36- Inventory control has physical custody of inventory.
37- The principal source document in the sales order system is the sales order.
38- Sales orders should be prenumbered documents.
39- Integrated accounting systems automatically transfer data between modules.
40- If a customer submits a written purchase order, there is no need to prepare a sales order.
41- Sales return involves receiving, sales, credit, and billing departments, but not accounts receivable.
42- A remittance advice is a form of turn-around document.
43- A bill of lading is a request for payment for shipping charges.
44- In point of sale systems, authorization takes the form of validation of credit card charges.
45- In non-manufacturing firms, purchasing decisions are authorized by inventory control.
46- The blind copy of the purchase order that goes to the receiving department contains no item descriptions.
47- Firms that wish to improve control over cash disbursements use a voucher system.
48- In a voucher system, the sum of all unpaid vouchers in the voucher register equals the firm's total voucher payable balance.
49- The accounts payable department reconciles the accounts payable subsidiary ledger to the control account.
50 - The use of inventory reorder points suggests the need to obtain specific authorization.
51- Proper segregation of duties requires that the responsibility approving a payment be separated from posting to the cash disbursements journal.
52- A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of the accounting year.
53- When a trading partner agreement is in place, the traditional three way match may be eliminated.
54- Authorization of purchases in a merchandising firm occurs in the inventory control department.
55- A three way match involves a purchase order, a purchase requisition, and an invoice.
56- Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the supplier's invoice.
57- An automated cash disbursements system can yield better cash management since payments are made on time.
58- Permitting warehouse staff to maintain the only inventory records violates separation of duties.
59- A purchasing system that employs electronic data interchange does not use a purchase order.
60- Inventory control should be located in the warehouse.
61- Inspection of shipments in the receiving department would be improved if the documentation showed the value of the inventory.
62- One reason for authorizing purchases is to enable efficient inventory management.
63- If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the purchase order and receiving report.
64- Supervision in receiving is intended to reduce the theft of assets.