Accounting Information Systems 8th

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

Chapter 8—General Ledger, Financial Reporting, and Management Reporting

Systems

TRUE/FALSE

1. The most common means of making entries in the general ledger is via the journal voucher.

ANS: T PTS: 1

2. Individuals with access authority to general ledger accounts should not prepare journal
vouchers.

ANS: T PTS: 1

3. The journal voucher is the document that authorizes entries to be made to the general ledger.

ANS: T PTS: 1

4. Each account in the chart of accounts has a separate record in the general ledger master file.

ANS: T PTS: 1

5. The responsibility center file is primarily used by the Financial Reporting System.

ANS: F PTS: 1

6. Management reporting is often called discretionary reporting because it is not mandated as is

financial reporting.

ANS: T PTS: 1

7. Primary recipients of financial statement information are internal management.

ANS: F PTS: 1

8. The Management Reporting System is a nondiscretionary system.

ANS: F PTS: 1

9. When evaluating decision alternatives, one option is to take no action.

ANS: T PTS: 1

10. In most cases intangible decision criteria can be quantified.

ANS: F PTS: 1
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 Accounting Information Systems, 8e—Test Bank, Chapter 8

11. One benefit of the Management Reporting System is that it can alert management to delays in
project implementation.

ANS: T PTS: 1

12. Responsibility refers to an individual’s obligation to achieve desired results.

ANS: T PTS: 1

13. A firm with a wide span of control tends to have relatively more layers of management.

ANS: F PTS: 1

14. The control function entails evaluating a process against a standard and, if necessary, taking
corrective action.

ANS: T PTS: 1

15. Standards are the basis for evaluating actual performance.

ANS: T PTS: 1

16. A report is said to have information content if it eliminates uncertainty associated with a
problem facing the decision maker.

ANS: F PTS: 1

17. An inventory out-of-stock report is an example of a programmed, on-demand report.

ANS: T PTS: 1

18. A principle of responsibility accounting is that managers are responsible for controllable and
uncontrollable costs.

ANS: F PTS: 1

19. The manager of a cost center is responsible for cost control and revenue generation.

ANS: F PTS: 1

20. Designing an effective management reporting system does not require an understanding of the
information managers need to deal with the problems they face.

ANS: F PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

21. The formalization of tasks principle suggests that management should structure the firm
around the unique skills sets of key individuals.

ANS: F PTS: 1

22. If a manager delegates responsibility to a subordinate, he or she must also grant the
subordinate authority to make decisions.

ANS: T PTS: 1

23. Operational control involves motivating managers at all levels to use resources, including
materials, personnel, and financial assets, as productively as possible.

ANS: F PTS: 1

24. XBRL taxonomies are classification schemes that are compliant with the XBRL
specifications to accomplish a specific information exchange.

ANS: T PTS: 1

25. An income statement is an example of an XBRL instance document.

ANS: T PTS: 1

MULTIPLE CHOICE

1. Which statement is not true/

a. The journal voucher is the only source of input into the general ledger.
b. A journal voucher can be used to represent summaries of similar transactions or a single
unique transaction.
c. Journal vouchers are not used to make adjusting entries and closing entries in the general
ledger.
d. Journal vouchers offer a degree of control against unauthorized general ledger entries.

ANS: C PTS: 1

2. Entries into the General Ledger System (GLS) can be made using information from
a. the general journal
b. a journal voucher which represents a summary of similar transactions
c. a journal voucher which represents a single, unusual transaction
d. all of the above

ANS: D PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

3. Which statement is not correct? The general ledger master file

a. is based on the firm’s chart of account
b. contains a record for control accounts
c. is an output of the Financial Reporting System (FRS)
d. supplies information for management decision making

ANS: C PTS: 1

4. What type of data is found in the general ledger master file?

a. a chronological record of all transactions
b. the balance of each account in the chart of accounts
c. budget records for each account in the chart of accounts
d. subsidiary details supporting a control account

ANS: B PTS: 1

5. Which report is not an output of the Financial Reporting System (FRS)?

a. variance analysis report
b. statement of cash flows
c. tax return
d. comparative balance sheet

ANS: A PTS: 1

6. Which steps in the Financial Accounting Process are in the correct sequence?
a. record the transaction, post to the ledger, prepare the adjusted trial balance, enter
adjusting entries, prepare financial statements
b. record the transaction, prepare the unadjusted trial balance, record adjusting
journal entries, record closing entries, prepare financial statements
c. record the transaction, post to the ledger, record adjusting entries, prepare the
unadjusted trial balance, prepare financial statements
d. record the transaction, post to the ledger, prepare the adjusted trial balance, prepare
financial statements, record closing entries

ANS: D PTS: 1

7. Which statement is not correct?

a. the post-closing trial balance reports the ending balance of each account in the
general ledger
b. one purpose of preparing the unadjusted trial balance is to ensure that debits equal
credits
c. financial statements are prepared based on the unadjusted trial balance
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 Accounting Information Systems, 8e—Test Bank, Chapter 8

d. the unadjusted trial balance reports control account balances but omits subsidiary
ledger detail

ANS: C PTS: 1

8. What account appears on the post closing trial balance?

a. income summary
b. machinery
c. rent expense
d. interest income

ANS: B PTS: 1

9. Financial statements are prepared from the

a. trial balance
b. adjusted trial balance
c. general ledger
d. general journal

ANS: B PTS: 1

10. Risk exposures in the General Ledger and Financial Reporting Systems include all of the
following except
a. loss of the audit trail
b. unauthorized access to the general ledger
c. loss of physical assets
d. general ledger account out of balance with the subsidiary account

ANS: C PTS: 1

11. Which situation indicates an internal control risk in the General Ledger/Financial Reporting
Systems (GL/FRS)?
a. the employee who maintains the cash journal computes depreciation expense
b. the cash receipts journal voucher is approved by the Treasurer
c. the cash receipts journal vouchers are prenumbered and stored in a locked safe
d. the employee who maintains the cash receipts journal records transactions in the
accounts receivable subsidiary ledger

ANS: D PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

12. With a limited work force and a desire to maintain strong internal control, which combination
of duties performed by a single individual presents the least risk exposure?
a. maintaining the inventory ledger and recording the inventory journal voucher in
the general ledger
b. recording the inventory journal voucher in the general ledger and maintaining
custody of inventory
c. maintaining the cash disbursements journal and recording direct labor costs
applied to specific jobs
d. preparing the accounts payable journal voucher and recording it in the general
ledger

ANS: C PTS: 1

13. Which best describes a batch process General Ledger System (GLS)
a. paper documents are eliminated
b. the general ledger master file is updated each night
c. there is a time lag between transaction processing and posting to the general ledger
d. no direct access or querying of the General Ledger is possible

ANS: C PTS: 1

14. An advantage of a batch General Ledger System (GLS) is that

a. separation between authorization and transaction processing is strictly enforced
b. the general ledger master file is recreated with each update
c. updates and reconciliation of transactions occur as a step within the transaction
cycle
d. errors and out-of-balance conditions are identified at the end of the month

ANS: C PTS: 1

15. XBRL
a. is the basic protocol that permits communication between Internet sites.
b. controls Web browsers that access the Web.
c. is the document format used to produce Web pages.
d. was designed to provide the financial community with a standardized method for
preparing
e. is a low-level encryption scheme used to secure transmissions in higher-level
(HTTP) format.

ANS: D PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

16. An XBRL taxonomy:

a. is the document format used to produce web pages.
b. is the final product (report).
c. is a classification scheme.
d. is a tag stored in each database record.
e. none of the above is true.

ANS: C PTS: 1

17. A characteristic of the Management Reporting System (MRS) is

a. the MRS operates in conformity with generally accepted accounting principles
b. it is a legal requirement that the MRS be installed and functioning properly
c. the MRS is developed by implementing SEC requirements
d. the MRS focuses on internal decision-making information

ANS: D PTS: 1

18. Which statement is not true?

a. authority refers to an individual’s obligation to achieve desired results
b. if an employee is given the responsibility for a task, that employee should be given
authority to make decisions within the limits of that task
c. the level of detail provided to an employee is a function of the employee’s position
with the firm
d. all of the above are true

ANS: A PTS: 1

19. Which statement is not true? The manager’s span of control

a. is narrow for routine and repetitive tasks
b. is related to the number of layers of management
c. affects the amount of detail provided to a manager
d. can affect employee morale and motivation

ANS: A PTS: 1

20. Short-range planning involves

a. setting goals and objectives of the firm
b. planning the production schedule for the next quarter
c. planning the growth of the firm
d. deciding on the degree of diversification among the firm’s products

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

ANS: B PTS: 1

21. Long-range planning involves

a. planning the marketing and promotion for a product
b. presenting department heads with budgetary goals for the next year
c. preparing a work force utilization budget for the next quarter
d. deciding the optimum size of the firm

ANS: D PTS: 1

22. The level of management that makes tactical planning decisions is

a. top management
b. middle management
c. operations management
d. front-line management

ANS: B PTS: 1

23. The decision to enter a new market is an example of

a. strategic planning
b. tactical planning
c. management control
d. operational control

ANS: A PTS: 1

24. All of the following are elements of operational control decisions except
a. determining the scope of the activity
b. setting operating standards
c. evaluating performance
d. taking corrective action when necessary

ANS: A PTS: 1

25. In contrast to tactical planning decisions, management control decisions, and operational
control decisions, strategic planning decisions usually
a. are more focused
b. have a shorter time frame
c. are unstructured
d. have a high degree of certainty

ANS: C PTS: 1
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 Accounting Information Systems, 8e—Test Bank, Chapter 8

26. Which of the following management principles affects the management reporting system?
a. formalization of tasks
b. authorization
c. span of control
d. all of the above

ANS: D PTS: 1

27. All of the following are elements of problem structure except

a. certainty
b. data
c. procedures
d. objectives

ANS: A PTS: 1

28. All of the following are examples of programmed reports except

a. cash flow reports for Division B
b. year-to-date local income tax payments made by all employees living in City X
and working in City Y
c. inventory exception reports for Division G
d. equipment utilization reports for Plant M

ANS: B PTS: 1

29. A fundamental principle of responsibility accounting is that

a. managers are accountable only for items they control
b. a manager’s span of control should not exceed eight people
c. structured reports should be prepared weekly
d. the information flow is in one direction, top-down

ANS: A PTS: 1

30. Which statement is not true? Responsibility accounting

a. involves both a top-down and bottom-up flow of information
b. acknowledges that some economic events cannot be traced to any manager
c. creates a budget
d. compares actual performance with budget

ANS: B PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

31. What mechanism is used to convey to managers the standards by which their performance
will be measured?
a. the responsibility report
b. the scheduled report
c. the budget
d. all of the above

ANS: C PTS: 1

32. All of the following concepts encourage goal congruence except

a. detailed information reporting at all management levels
b. authority and responsibility
c. formalization of tasks
d. responsibility accounting

ANS: A PTS: 1

33. Which of the following statements is NOT true?

a. XML stands for eXperimental Markup Language.
b. XML is a is a meta-language for describing markup languages.
c. Unlike HTML, XML is capable of storing data in relational form.
d. Any markup language can be created using XML

ANS: A PTS: 1

34. Which file has as its primary purpose to present comparative financial reports on a historic
basis?
a. journal voucher history file
b. budget master file
c. responsibility file
d. general ledger history file

ANS: D PTS: 1

35. All of the following are characteristics of the strategic planning process except the
a. emphasis on both the short and long run.
b. review of the attributes and behavior of the organization’s competition.
c. analysis of external economic factors.
d. analysis of consumer demand.

ANS: A PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

36. Which of the following performance measures cannot result in dysfunctional behavior?
a. price variance
b. quotas
c. ROI
d. net income
e. all of the above can result in dysfunctional behavior

ANS: E PTS: 1

37. Which of the following best describes a profit center:

a. authority to make decisions affecting the major determinants of profit, including
the power to choose its markets and sources of supply.
b. authority to make decisions affecting the major determinants of profit, including
the power to choose its markets and sources of supply, and significant control over
the amount of invested capital.
c. authority to make decisions over the most significant costs of operations, including
the power to choose the sources of supply.
d. authority to provide specialized support to other units within the organization.
e. responsibility for combining the raw materials, direct labor, and other factors of
production into a final product.

ANS: A PTS: 1

38. Which of the following budgeting processes is least likely to motivate managers toward
organizational goals?
a. setting budget targets at attainable levels
b. participation by subordinates in the budgetary process
c. use of management by exception
d. holding subordinates accountable for the items they control
e. having top management set budget levels

ANS: A PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

SHORT ANSWER

1. List, in order, the steps in the Financial Accounting Process.

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

ANS:
1. Capture the transaction on source documents.
2. Record in special journals.
3. Post to subsidiary ledger.
4. Post to general ledger (using journal vouchers).
5. Prepare the unadjusted trial balance.
6. Make adjusting entries.
7. Journalize and post adjusting entries.
8. Prepare adjusted trial balance.
9. Prepare financial statements.
10. Journalize and post closing entries.
11. Prepare the post-closing trial balance.

PTS: 1

2. List two duties that the general ledger clerk should not perform.

ANS:
make entries in special journals or subsidiary ledgers;
prepare journal vouchers; maintain custody of physical assets

PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

3. Explain the purpose and contents of the general ledger master file.

ANS:
The general ledger master file is the main file on the general ledger database. It is based on the
firm’s chart of accounts. Each record is either a general ledger account (e.g., sales) or a
control account (e.g., the accounts payable control) for one of the subsidiary ledgers. The
general ledger master file contains the following for each account: the account number,
description, account class (e.g., asset), the normal balance (debit or credit), beginning balance,
total debits for period, total credits for period, and current balance.

PTS: 1

4. What is XML?

ANS:
XML (eXtensible Markup Language) is a meta-language for describing markup languages.
The term extensible means that any markup language can be created using XML. This
includes the creation of markup languages capable of storing data in relational form, where
tags (formatting commands) are mapped to data values.

PTS: 1

5. Why do many firms no longer use a general journal? What has taken its place?

ANS:
Many firms have replaced a traditional general journal with a journal voucher system. Each
entry is documented on a prenumbered journal voucher which contains additional
information, such as authorization, which enhances control. A voucher may contain
information on a number of related transactions.

PTS: 1

6. What are the major exposures in the general ledger/financial reporting system?

ANS:
The primary exposures are: a defective or lost audit trail, unauthorized access, GL accounts
out of balance with subsidiary ledger accounts, and incorrect account balances due to
unauthorized or incorrect entries.

PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

7. Why is the audit trail necessary?

ANS:
The audit trail is needed for several reasons: to provide the ability to answer inquiries from
customers and suppliers, to reconstruct files if lost, to provide historical data to auditors, to
satisfy government regulations, and for error control.

PTS: 1

8. The _______________________________ principle suggests that management should

structure the firm around the work it performs rather than around individuals with unique
skills.

ANS:
formalization of tasks

PTS: 1

9. Employees who are responsible for a task must have the __________________________ to
make decisions within the limits of the responsibility delegated.

ANS:
authority

PTS: 1

10. __________________________ refers to the number of subordinates directly under a

manager’s control.

ANS:
Span of control

PTS: 1

11. The difference between the actual performance and the standard is called the
__________________________.

ANS:
variance

PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

12. How does the Management by Exception principle affect the Management Reporting System?

ANS:
Reports should focus on differences between actual and expected numbers in key factors that
are symptomatic of potential problems. Reports that provide unnecessary details about
routine, in control items should be avoided.

PTS: 1

13. For reports to be useful they must have information content. Describe a reporting objective
which gives reports information content.

ANS:
Reports must reduce the level of uncertainty associated with a problem facing the decision
maker, and must influence the behavior of the decision maker in a positive way.

PTS: 1

14. What is information overload? How does it affect decision-making?

ANS:
Information overload refers to a situation in which a manager receives more information than
can be assimilated. A natural response to this is to ignore information or select only some. In
addition, intuition can displace logic.

PTS: 1

15. Explain the phrase “span of control.” What are the implications for the management reporting
system of this principle?

ANS:
A manager’s span of control is the number of subordinates he/she supervises directly. The
broader a manager’s span of control, the more autonomy his/her subordinates enjoy–the less
involved the manager is in their specific tasks. This impacts the MRS in terms of the level of
detail a manager requires. If the span is wide, less detail; if narrow, more.

PTS: 1

16. Explain the three types of responsibility centers.

ANS:
Cost centers are organizational units with responsibility for cost management.
Profit centers have responsibility for both cost management and revenue generation.
Investment centers have responsibility for cost management, revenue generation, and also the
investment and use of assets.

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

PTS: 1

17. Describe at least three characteristics of strategic planning decisions and their information
requirements.

ANS:
have long time frames–create a need for information that supports forecasting,
require summarized information–not encumbered by detail,
tend to be nonrecurring–thus having little historical data in support
involve a lot of uncertainty–i.e., are unstructured decisions
are broad in scope–thus requiring broad based information
often require significant external information–generated beyond the information system itself.

PTS: 1

18. What three elements must be present for a problem to be “structured?”

ANS:
data, procedures, objectives

PTS: 1

19. How does management by exception help to alleviate information overload by a manager?

ANS:
The principle of management by exception is that managers should limit their attention to
potential problem areas rather than being involved with every activity or decision. Thus, only
situations which are not proceeding as scheduled are highlighted by the reports and analyzed
by the manager. Thus, the manager does not have to weed through multiple reports to find the
situations which need attention.

PTS: 1

20. What is a data warehouse?

ANS:
A data warehouse is a relational database management system that has been designed
specifically to meet the needs of data mining. The warehouse is a central location that
contains operational data about current events (within the past 24 hours) as well as events that
have transpired over many years.

PTS: 1

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

21. What is XBRL?

ANS:
XBRL (Extensible Business Reporting Language) is an XML-based language that was
designed to provide the financial community with a standardized method for preparing,
publishing and automatically exchanging financial information, including financial statements
of publicly held companies.

PTS: 1

22. What is the XBRL Taxonomy?

ANS:
XBRL taxonomies are classification schemes that are compliant with the XBRL
specifications, to accomplish a specific information exchange or reporting objectives.

PTS: 1

ESSAY

1. List and explain the six basic files in the general ledger database.

ANS:
The general ledger master file is the main file on the general ledger database. It is based on the
firm’s chart of accounts. Each record is either a separate general ledger account (e.g., sales) or
a control account (e.g., the accounts payable control) for one of the subsidiary ledgers.

The general ledger history file contains the same information for prior periods.

The journal voucher file contains all of the journal vouchers processed in the current period.

The journal voucher history file contains journal vouchers for past periods.

The responsibility center file contains the revenues, expenses, and other data for individual
responsibility centers.

The budget master file contains budgeted amounts for responsibility centers.

PTS: 1

2. Describe the three elements of problem structure. Contrast a structured problem to an

unstructured problem. Describe which levels of management typically deal with structured
problems and with unstructured problems.

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 Accounting Information Systems, 8e—Test Bank, Chapter 8

ANS:
Problem structure has three elements: (1) Data–the values used to represent factors that are
relevant to the problem; (2) Procedures–the sequence of steps or decision rules used in solving
the problem; and (3) Objectives–the results the decision maker desires to attain by solving the
problem.

When all three elements of problem structure are known with certainty, the problem is
structured. In unstructured problems the data requirements are uncertain, and/or the
procedures are not specified, and/or the solution objectives have not been fully developed.

In general, structured problems are handled at the operations level and partially structured
problems are handled by operations, tactical, and strategic management. Usually, strategic
management handles unstructured problems.

PTS: 1

3. Many financial reports produced by organizations are nondiscretionary–publicly traded firms

have no choice but to prepare income statements, tax returns, etc. Applications that are part of
the management reporting system are discretionary–they are optional. How does this
characteristic affect the system?

ANS:
Unlike nondiscretionary reports whose content, timing, even format are prescribed by
regulatory or authoritative bodies, discretionary reports are whatever management feels is
needed–in content, timing, format, and use. The MRS can be an important part of the firm’s
internal control system. By summarizing activities, highlighting trends, and identifying
exceptions from normal performance, reports can greatly enhance management’s
understanding of operations. These can be whatever management feels is necessary to make
good decisions. The expansion of the MRS must be guided by common sense. If too many
reports are generated, information overload results. If the cost of the system exceeds the
perceived benefits, the organization loses.

PTS: 1

4. There are two basic types of management reports–programmed and ad hoc. Describe each and
give examples.

ANS:
Programmed reports provide information to solve anticipated problems and make normal
decisions. They include scheduled reports such as daily sales reports and on-demand reports
generated by need such as inventory below reorder point (the report is generated when the
inventory level fall to reorder–the report is demanded by the system based on the previously
set inventory level). Ad hoc reports are the result of immediate need for information and may
take the form of database queries on sales of a particular item mentioned in a news report.

PTS: 1

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or posted to a publicly accessible website, in whole or in part.
 Accounting Information Systems, 8e—Test Bank, Chapter 8

5. Describe at least three attributes of an effective report.

ANS:
Effective reports tend to share several attributes:
relevance–relevant data supports the manager’s decision needs,
summarization–data should be at the appropriate level of summarization for the manager
receiving it,
exception orientation–this highlights what is not going as planned,
accuracy–is the freedom from material errors,
completeness–with no key pieces of information missing,
timeliness–information that is reasonable complete and accurate in a reasonable time frame is
more valuable than perfect information too late,
conciseness–conciseness is a counter measure to information overload.

PTS: 1

6. What is the implication for the Management Reporting System of an organization that
implements the formalization of tasks principle?

ANS:
Information requirements are defined by a position, not by the person filling that position.
When there is a personnel change, there should be no major changes in the information
needed by the new employee; it will be essentially the same as that needed by the former
employee. Internal control is strengthened because information is provided based on the
requirements of the position (a need to know basis).

PTS: 1

7. Discuss three audit implications of XBRL

ANS:
Audit implications include:
Taxonomy Creation. Taxonomy may be generated incorrectly, resulting in an incorrect
mapping between data and taxonomy elements that could result in material misrepresentation
of financial data. Controls must be designed and in place to ensure the correct generation of
XBRL taxonomies.

Validation of Instance Documents. As noted, once the mapping is complete and tags have
been stored in the internal database, XBRL instance documents (reports) can be generated.
Independent verification procedures need to be established to validate the instance documents
to ensure that appropriate taxonomy and tags have been applied before posting to web server.

Audit Scope and Timeframe. Currently, auditors are responsible for printed financial
statements and other materials associated with the statements. What will be the impact on the
scope of auditor responsibility as a consequence of real time distribution of financial
statements across the Internet? Should auditors also be responsible for the accuracy of other
related data that accompany XBRL financial statements, such as textual reports?
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 Accounting Information Systems, 8e—Test Bank, Chapter 8

PTS: 1

8. Discuss the primary advantage of XBRL over traditional HTML as a means of on-line
reporting of financial information to users.

Online reporting of financial data has become a competitive necessity for publicly traded
organizations. Currently, most organizations accomplish this by placing their financial
statements and other financial reports on their respective Web sites as HTML (Hyper Text
Markup Language) documents. These documents can then be downloaded by users such as
the SEC, financial analysts, and other interested parties. The HTML reports, however, cannot
be conveniently processed through IT automation. Performing any analysis on the data
contained in the reports requires them to be manually entered into the user’s information
system. The solution to this problem is eXtensible BusinessReporting Language (XBRL),
which is the Internet standard specifically designed for business reporting and information
exchange. The objective of XBRL is to facilitate the publication, exchange, and processing of
financial and business information. XBRL documents can thus be downloaded, interpreted,
and analyzed using computer software with no additional manual data input necessary.

PTS: 1

9. Contrast the four decision types, strategic planning, tactical planning, management control
and operational control, by the four decision characteristics, time frame, scope, level of
details, recurrence, and certainty.

ANS:
Strategic planning decisions are 1) typically long-term in nature, 2) have a high impact on the
firm, 3) require highly summarized information, 4) typically non-recurring
problems/opportunities, and 5) uncertain in nature. Tactical planning decisions are 1) typically
medium-term in nature, 2) have a limited impact on the firm, 3) require detailed information,
4) typically are periodically recurring problems/opportunities, and 5) highly certain in nature.
Management control decisions are 1) typically medium-term in nature, 2) have a narrower
impact on the firm, 3) require moderately summarized information, 4) typically are
periodically recurring problems/opportunities, and 5) uncertain in nature. Operational control
decisions are 1) typically short-term in nature, 2) have the narrowest impact on the firm, 3)
require highly detailed information, 4) typically are periodically recurring
problems/opportunities, and 5) highly certain in nature.

PTS: 1

10. Describe the role of the journal voucher in both batch and real-time GL systems.

ANS:

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,
or posted to a publicly accessible website, in whole or in part.
 Accounting Information Systems, 8e—Test Bank, Chapter 8

In batch GL systems, transaction processing applications summarize and capture transactions

in journal vouchers where they are held, reviewed, and later posted to the GL. In such
systems, journal vouchers are the authority and the source of all GL postings. In contrast, a
real-time GL system posts each transaction directly to the general ledger and concurrently
creates a journal voucher. The journal voucher in this system does not authorize a GL entry in
the traditional sense. Rather, it provides a posting reference and audit trail, which links GL
summary account balances to specific transactions.

PTS: 1

© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,
or posted to a publicly accessible website, in whole or in part.