Islamic University – Gaza Accounting Information System

Faculty of Commerce Date: 10/01/2012

Dep't of Accounting
End-Term Exam (2011/2012)
Student Name: …………………………………………….…………………………Student No.…………….……………

Question One: State whether the following statements are () or (): (10 Marks)
1. ( ) Kiting is the process where the perpetrator steal a payment from Customer A, then
apply Customer B’s payment to Customer A’s account and so on for Customer C, D,...
2. ( ) Disgruntled employees should not be allowed to continue in jobs where they could
harm the organization.
3. ( ) DFDs place a heavy emphasis on the logical aspects of a system while the flowcharts
place more emphasis on the physical characteristics of the system.
4. ( ) The primary external exchange of information in the revenue cycle is with vendors.
5. ( ) Billing the customers is the final step in the revenue cycle.
6. ( ) Threats in the sales order entry process include: sales to customers with poor credit
and theft of Inventory.
7. ( ) The three basic activities performed in the expenditure cycle are: ordering goods,
supplies, and services. Receiving and storing these items. Paying for these items.
8. ( ) Economic Order Quantity seeks to reduce inventory levels by improving the accuracy
of forecasting techniques and carefully scheduling production and purchasing around
that forecast.
9. ( ) Packing list includes an itemized detail of the package contents and does not include
customer pricing. It serves to inform about the contents of the package.
10 ( ) Employees who are terminated should be removed from sensitive jobs immediately
. and denied access to information systems.
11 ( ) Just in Time Inventory systems attempt to minimize or eliminate inventory by
. purchasing or producing only in response to actual sales.
12 ( ) Bribery, corruption, insurance fraud, check and credit card fraud and asset
. misappropriation are examples of occupational fraud.
13 ( ) The shipping process in the revenue cycle consists of three steps: taking the
. customer’s order, picking and packing the order, & shipping the order.
14 ( ) Misappropriation of assets is the wrongful use of a position, contrary to the
. responsibilities of that position, to procure a benefit.
15 ( ) Cooking the books refers to the disclosure of the accounting records to not involve in a
. misleading picture of a firm's financial position or the results of its operations.
16 ( ) The more responsible management’s philosophy and operating style, the more likely
. employees will behave responsibly.
17 ( ) Mandatory vacations or rotation of duties can prevent frauds or lead to early detection.
.
18 ( ) To make fraud less likely to occur you just need to create a culture that stresses
. integrity and commitment to ethical values and competence.
19 ( ) Developing a strong system of internal controls can help in increasing the difficulty of
. committing fraud.
20 ( ) The knowledgeable insiders are more likely to perpetrate fraud against companies.
.
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Question Two: Multiple choice: (5 Marks)
1. Threats in the process of receiving and storing goods include all the
following threats except:
a. Receiving unordered goods
b. Failing to catch errors in vendor invoices.
c. Errors in counting received goods
d. Theft of inventory

2. There are 3 types of occupational fraud:

a. Bribery, corruption, and insurance fraud.
b. Misappropriation of assets, corruption, and fraudulent statements.
c. Corruption, misappropriation of assets, check and credit card fraud.
d. Fraudulent statements, bribery, and insurance fraud.

3. The following statements are true except:

a. Financial statement fraud involves misstating the financial condition of an entity
by intentionally misstating amounts or disclosures in order to deceive users.
b. To reduce the possibility of fraudulent financial reporting, it is important to
identify and understand the factors that lead to fraudulent financial reporting.
c. Designing and implementing internal controls can provide an absolute assurance
that fraudulent financial reporting is prevented.
d. To be considered fraudulent, an act must involve knowledge that the statement
was false when it was uttered.

4. Fraudsters usually falsifies the financial statements to:

a. Meet cash flow needs.
b. Show the position of the company.
c. Disclosure the losses and problems in the financial statements.
d. All the previous choices.

5. These three factors have come to be known as the fraud triangle:

a. Pressure, benefits, and rationalization.
b. Opportunity, benefits, and pressure.
c. Pressure, rationalization, and opportunity.
d. Attitude, needs, and pressure.

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Question Three: Answer the following questions: (15 Marks)
1. What is the revenue cycle? What are the basic business activities performed in the
revenue cycle? (4 marks)

2. How to safeguard information and physical assets? (2 marks)

3. What are the similarities and the differences between Material Requirements Planning
(MRP) and Just in Time Inventory (JIT) methods? (6 marks)

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4. List the Characteristics that make information useful? (3 marks)

Question 4: Draw the following cycles including all the needed labels: (10 marks)
1. The revenue cycle: (5 marks)

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2. The expenditure cycle: (5 marks)

Question 5: Draw the Data Flow Diagrams and the flowcharts based on the following
information:
1. The registrar’s office of a small college receives paper enrollment forms from students. They
sort these records alphabetically and then update the student’s record file to show the new
classes. They also prepare class lists from the same data. The sorted enrollment forms are

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 forwarded to the bursar’s office for billing purposes. Class lists are mailed to faculty
members. Draw the previous description by using DFD and Flowchart. (10 marks)

2. Now change the story so that students enter enrollment data online. The registrar’s office
sends a tape file of the enrollment data to the bursar’s office and continues to send paper
class lists to faculty. Draw this description by using DFD and Flowchart. (10 marks)

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Good Luck