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Chapter-4-Note-Đã G P
Chapter-4-Note-Đã G P
Chapter 4 - note
1 Explain the importance and advantages of databases, as well as the difference between
database systems and file-based legacy systems.
1
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5) Which is probably the most immediate and significant effect of database technology on
accounting?
A) Replacement of the double entry-system.
B) Change in the nature of financial reporting.
C) Elimination of traditional records such as journals and ledgers.
D) Quicker access to and greater use of accounting information in decision-making.
Answer: D
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Reflective Thinking
6) Emma Kolb is a system analyst at a manufacturing company located in the Midwest. She has
been asked to analyze the company's accounting information system and to recommend cost-
effective improvements. After noting that the production and sales departments use database
systems that are entirely separated, she recommends that they be combined. Implementation of
her recommendation would benefit the company by contributing to data
A) independence.
B) integration.
C) redundancy.
D) qualifications.
Answer: B
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Reflective Thinking
2
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7) Emma Kolb is a system analyst at a manufacturing company located in the Midwest. She has
been asked to analyze the company's accounting information system and to recommend cost-
effective improvements. After noting that the same production files have been saved and stored
independently on several databases, she recommends that they be stored only once.
Implementation of her recommendation would benefit the company by contributing to
A) data independence.
B) data integration.
C) reduce data redundancy.
D) increase data sharing.
Answer: C
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Reflective Thinking
8) Emma Kolb is a system analyst at a manufacturing company located in the Midwest. She has
been asked to analyze the company's accounting information system and to recommend cost-
effective improvements. After noting that the several key managers do not have access to the
production and sales information, she recommends that they should be uploaded to the
company's internal network and be made available for search. Implementation of her
recommendation would benefit the company by contributing to
A) data independence.
B) data integration.
C) reduce data redundancy.
D) increase data sharing.
Answer: D
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Reflective Thinking
9) Merlin Frodo has been doing custom piercings and tattoos for over thirty years. His home and
place of business is a garage in the harbor district of Seattle, Washington. He keeps meticulous
records of every job he has ever completed. These have been entered into a computerized
accounting information system that his accountant refers to as a "data warehouse." Merlin is
considering adding scarification to his service offerings and has asked his accountant to identify
past customers who might be likely candidates for this service. Merlin wants his accountant to
engage in
A) customer auditing.
B) customer resource management.
C) data mining.
D) enterprise resource planning.
Answer: C
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Reflective Thinking
3
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10) Mara Kay is a system analyst for a national department store. She was tasked to identify
previously unknown relationships in the company's sales data that can be used in future
promotions. What technique would Mara most likely use?
A) Customer auditing
B) Customer resource management
C) Data exploring
D) Data mining
Answer: D
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Reflective Thinking
11) Describe a major advantage of database systems over file-oriented transaction processing
systems.
Answer: Database systems separate logical and physical views. This separation is referred to as
program-data independence. Such separation facilitates developing new applications because
programmers can concentrate on coding the application logic (what the program will do) and do
not need to focus on how and where the various data items are stored or accessed. In the file-
oriented transaction systems, programmers need to know physical location and layout of records
which adds another layer of complexity to programming.
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Reflective Thinking
12) Explain the difference between file-oriented transaction processing systems and relational
database systems. Discuss the advantages and disadvantages of each system.
Answer: In file-oriented approaches, different users (or departments, units, etc.) maintain their
own data and use different application programs. This results in a significant increase in number
of master files stored by an organization. The various disadvantages of file-oriented organization
include data redundancy, data inconsistencies, lack of data integration, a large number of data
files, substantial program-data dependence, lack of compatibility, and lack of data sharing. The
database approach views data as an organizational resource that should be used and managed for
the entire organization. The program that manages and controls the data and the interfaces
between data and application programs is called the database management system (DBMS). The
various advantages of database approach include the following: minimal data redundancy, fewer
data inconsistencies, data integration, data sharing, reporting flexibility, central management of
data, cross-functional analysis, and data independence.
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Reflective Thinking
4
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13) Describe what you think will be the main impact of database technology in your career.
Answer: Answers to this question could cover a wide range. Most likely the following items will
be discussed or mentioned:
— the probable demise of the double-entry system as the need for such redundancy is much less
in a database system.
— financial reporting may become more of accessing a database of corporate data in the format
desired by the user than relying on financial reports prepared by accountants.
— accountants will no longer need to be the filter for accounting data as users will be able to do
this themselves, thus the accountants may become more decision makers and managers.
— the whole notion of internal controls will become more important in the future if the
accountants' role changes in relation to financial reporting.
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Challenging
AACSB: Reflective Thinking
5
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16) The use of a data warehouse in strategic decision making is often referred to as
A) business intelligence.
B) managerial accounting.
C) data analysis.
D) analytical modeling.
Answer: A
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
17) The technique of using queries to investigate hypothesized relationships among data is called
A) business intelligence.
B) online analytical processing.
C) data analysis.
D) data mining.
Answer: B
Concept: Databases and files
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
2 Explain database systems, including logical and physical views, schemas, the data dictionary,
and DBMS languages.
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4) The document that shows the items stored in a file, including the order and length of the data
fields and the type of data stored is called
A) a data layout.
B) a logical layout.
C) a physical layout.
D) a record layout.
Answer: D
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
5) What acts as an interface between the database and the various application programs?
A) data warehouse
B) database administrator
C) database system
D) database management system
Answer: D
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
6) The combination of the database, the DBMS, and the application programs that access the
database through the DBMS is referred to as the
A) data warehouse.
B) database administrator.
C) database system.
D) database management system.
Answer: C
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
7
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8) The ________ handles the link between the way data are physically stored and each user's
logical view of that data.
A) database management software (DBMS)
B) database manager
C) data warehouse
D) data dictionary
Answer: A
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
10) The schema that provides an organization-wide view of the entire database is known as the
A) external-level schema.
B) internal-level schema.
C) conceptual-level schema.
D) logical view of the database.
Answer: C
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
8
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12) A low-level view of the database that describes how the data are actually stored and accessed
is the
A) conceptual-level schema.
B) subschema.
C) internal-level schema.
D) external-level schema.
Answer: C
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
13) Record layouts, definitions, addresses, and indexes will be stored at the ________ level
schema.
A) external
B) conceptual
C) internal
D) meta
Answer: C
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
14) The ________ contains information about the structure of the database.
A) data definition language
B) data dictionary
C) data warehouse
D) database management system
Answer: B
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
9
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15) Which of the following would not be found in a data dictionary entry for a data item?
A) records containing a specific data item
B) physical location of the data
C) source of the data item
D) field type
Answer: B
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
17) Reports produced using the data dictionary could include all of the following except a list of
A) programs where a data item is used.
B) synonyms for the data items in a particular file.
C) outputs where a data element is used.
D) the schemas included in a database.
Answer: D
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
10
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19) Which statement below concerning the database management system (DBMS) is false?
A) The DBMS automatically creates application software for users, based on data dictionary
parameters.
B) The DBMS automatically maintains the data dictionary.
C) Users' requests for information are transmitted to the DBMS through application software.
D) The DBMS uses special languages to perform specific functions.
Answer: A
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Challenging
AACSB: Analytical Thinking
20) Which would not generally be considered a data dictionary output report?
A) a list of cash balances in the organization's bank accounts
B) a list of all programs in which a data element is used
C) a list of all synonyms for the data elements in a particular file
D) a list of all data elements used by a particular user
Answer: A
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
21) Creating an empty table in a relational database requires use of the ________, and populating
that table requires the use of ________.
A) DDL; DML
B) DQL; SQL
C) DDL; DQL
D) DML; DDA
Answer: A
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
22) Describe the differences between the data definition language (DDL), data manipulation
language (DML), and the data query language (DQL).
Answer: The data definition language (DDL) builds the data dictionary, creates the database,
describes logical views for each user, and specifies record or field security constraints. The data
manipulation language (DML) changes database content, including data element creations,
updates, insertions, and deletions. The data query language (DQL) is a high-level, English-like
language that contains powerful, easy-to-use commands that enable users to retrieve, sort, order,
and display data.
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
11
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23) When the human resources manager wants to gather data about salary and start date by
employees and by departments, the manager would use which language?
A) Data Manipulation Language
B) Data Query Language
C) Data Report Language
D) Data Definition Language
Answer: B
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
24) When the human resources manager wants to add a new employee to the sales department,
the manager would use which language?
A) Data Manipulation Language
B) Data Query Language
C) Data Report Language
D) Data Definition Language
Answer: A
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
25) When the human resources manager wants to build a data dictionary, the manager would use
which language?
A) Data Manipulation Language
B) Data Query Language
C) Data Report Language
D) Data Definition Language
Answer: D
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
12
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26) If a national sales tax were implemented, which language would be used to add a new field
in the sales table to track the sales tax due?
A) Data Definition Language
B) Data Manipulation Language
C) Data Query Language
D) Data Update Language
Answer: A
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
27) ________ is a feature in many database systems that simplifies the creation of reports by
allowing users to specify the data elements desired and the format of the output.
A) Report printer
B) Report creator
C) Report generator
D) Report writer
Answer: D
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
13
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29) Mary Lamb is an insurance sales representative. Her company has provided her with a laptop
computer that uses wireless connectivity to access the accounting information system from
virtually anywhere in the country. She, and other sales reps, have access to view customer and
insurance product information. All sales reps also have access that allows them to enter and
cancel customer orders. The permissions for Mary define a ________ in the company's database
management system.
A) conceptual-level schema
B) subschema
C) data dictionary
D) physical view
Answer: B
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Reflective Thinking
30) Mary Lamb is an insurance sales representative. Her company has provided her with a laptop
computer that uses wireless connectivity to access the accounting information system from
virtually anywhere in the country. She has access to view customer and insurance product
information. She also has access that allows her to enter and cancel customer orders. The
permissions for Mary (and other sales reps) define a ________ in the company's database
management system.
A) conceptual-level schema
B) data dictionary
C) external-level schema
D) physical view
Answer: C
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Reflective Thinking
31) Describe the different schemas involved in a database structure. What is the role of
accountants in development of schemas?
Answer: A schema describes the logical structure of a database. There are three levels of
schemas. First, the conceptual-level schema is an organization-wide view of the entire database
listing all data elements and relationships between them. Second, an external-level schema is a
set of individual user views of portions of the database, each of which is referred to as a
subschema. Finally, an internal-level schema provides a low-level view of the database which
includes descriptions about pointers, indexes, record lengths, etc. Accountants are primarily
involved in the development of conceptual- and external-level schemas; however, database
knowledgeable accountants may participate in developing an internal -level schema.
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Reflective Thinking
14
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33) Discuss the ways in which a well-designed DBMS will facilitate the three basic functions of
creating, changing, and querying data.
Answer: A DBMS will use data definition, data manipulation, and data query languages in order
to perform the three basic, essential data functions. Data definition is achieved using DDL (data
definition language); data manipulation is achieved using DML (data manipulation language)
which includes operations such as updating, inserting, and deleting portions of the database.
DQL (data query language) is used to retrieve, sort, order, and present subsets of data in response
to user queries. A DBMS will probably also include a report writer, which is a language that
simplifies report creation.
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
34) List the four DBMS "languages" and describe who uses each and for what purpose.
Answer: DDL is the data definition language used by the DBA (database administrator) to
create, initialize, describe logical views, and specify security limits. The DML is the data
manipulation used by application programmers who embed these action commands into
applications to access data in the database. The DQL is the data query language used by IT
professionals and users to interrogate the database by retrieving and presenting data in novel
ways often on an ad hoc basis. The report writer is a language used by IT professionals and users
that simplifies report creation so reports can be created according to user-specified format.
Concept: Database systems
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
15
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3 Describe what a relational database is, how it organizes data, and how to create a set of well-
structured relational database tables.
2) A row in a table that contains data about a specific item in a database table is call
A) a data model.
B) an attribute.
C) a tuple.
D) a relational record.
Answer: C
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
3) An attribute in a table that serves as a unique identifier in another table and is used to link the
two tables is a
A) foreign key.
B) primary key.
C) relational key.
D) linkage key.
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
16
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5) The ________ occurs when more than one occurrence of a specific data item in a database
exists.
A) inconsistency anomaly
B) insert anomaly
C) delete anomaly
D) update anomaly
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
6) Inability to add new data to a database without violating the basic integrity of the database is
referred to as the
A) update anomaly.
B) insert anomaly.
C) integrity anomaly.
D) delete anomaly.
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
7) A relational database in which vendor data is not maintained independently of purchase order
data will most likely result in
A) an update anomaly.
B) an insert anomaly.
C) a delete anomaly.
D) an integrity anomaly.
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
17
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8) The problem of losing desired information from a database when an unwanted record is
purged from the database is referred to as the ________ anomaly.
A) purge
B) erase
C) delete
D) integrity
Answer: C
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
18
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13) Describe the difference between update anomaly, insert anomaly, and delete anomaly.
Provide an example for each of the anomaly.
Answer: Update anomaly is an improper database organization where a non-primary key item is
stored multiple times; updating the item in one location and not the others causes data
inconsistencies.
Insert anomaly is an improper database organization that results in the inability to add records to
a database. Delete anomaly is an improper organization of a database that results in the loss of all
information about an entity when a row is deleted. Students' answers will vary depending on the
examples that they use for each of the anomaly.
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Reflective Thinking
14) Identify one potential drawback in the design and implementation of database systems for
accounting.
A) Double-entry accounting relies on redundancy as part of the accounting process, but well-
designed database systems reduce and attempt to eliminate redundancy.
B) Relational DBMS query languages will allow financial reports to be prepared to cover
whatever time periods managers want to examine.
C) Relational DBMS provide the capability of integrating financial and operational data.
D) Relational DBMS can accommodate multiple views of the same underlying data; therefore,
tables storing information about assets can include data about both historical and replacement
costs.
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
19
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15) Abby Burke has created custom statues made out of scrap metal for over ten years. Abby has
kept detailed records of every statue she has ever created. For every sale, she obtains the
customer's name and address, a description of the statue, and a picture of the statue sold to the
customer. Her unique style has recently attracted the attention of several celebrities. Ready to
take her business to the next level, Abby has hired you to construct an accounting information
system, which she wants modeled after her paper records. As you look over her records, you
realize that sometimes the same customer is recorded by a slightly different name. For example,
Mike Mulligan bought a horse statue, M. Mulligan bought a bear statue, and Mike M. all seem to
be the same person. This is an example of what type of problem in the existing records?
A) entity integrity
B) referential integrity
C) update anomaly
D) insert anomaly
Answer: C
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
16) Abby Burke has created custom statues made out of scrap metal for over ten years. Abby has
kept detailed records of every statue she has ever created. For every sale, she obtains the
customer's name and address, a description of the statue, and a picture of the statue sold to the
customer. Her unique style has recently attracted the attention of several celebrities. Ready to
take her business to the next level, Abby has hired you to construct an accounting information
system, which she wants modeled after her paper records. As you look over her records, you
realize that some customers bought multiple statues at the same time. For example, Yasmeen
Ghuari bought a Tin Man Status, a flying horseman statue, and a terrier statue. You realize that in
these cases, a single written record will have to be translated into multiple sales records. This is
an example of what type of problem in the existing records?
A) entity integrity
B) referential integrity
C) update anomaly
D) insert anomaly
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
20
Copyright © 2018 Pearson Education, Inc.
17) Abby Burke has created custom statues made out of scrap metal for over ten years. Abby has
kept detailed records of every statue she has ever created. For every sale, she obtains the
customer's name and address, a description of the statue, and a picture of the statue sold to the
customer. Her unique style has recently attracted the attention of several celebrities. Ready to
take her business to the next level, Abby has hired you to construct an accounting information
system, which she wants modeled after her paper records. As you look over her records, you
notice that some customer last names have different first names in different records. For
example, R. Framington Farnsworth, Bob Farnsworth, and Sam Farnsworth all seem to be the
same person. You explain to Abby that every customer must be identified by a unique customer
number in the AIS. You are referring to the
A) entity integrity rule.
B) referential integrity rule.
C) update anomaly.
D) insert anomaly.
Answer: A
Concept: Relational databases
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Reflective Thinking
18) Explain the types of attributes that tables possess in a relational database.
Answer: Primary key — the attribute, or combination of attributes, that uniquely identify a
specific row in a table. Foreign key — an attribute appearing in one table that is a primary key in
another table. Nonkey attributes found in tables — For example, an inventory table may contain
information about the description, quantity on hand, and list price of each item a company sells.
Concept: Relational databases
Objective: Learning Objective 4
Difficulty: Easy
AACSB: Analytical Thinking
19) Explain the two advantages semantic data modeling has over normalization when designing
a relational database.
Answer: Semantic data modeling takes advantage of a system designer's knowledge about the
business policies and practices of an organization. This is of great benefit in the design of
transaction processing databases. Also, since the database model is created around the policies
and practices of an organization, communications with the future database users is facilitated.
The result is that the system will more closely meet the needs of the intended users.
Concept: Relational databases
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
21
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22) What are the basic requirements when logically designing a relational database model?
Answer: Every row in every table must have a unique key known as a primary key. Tables may
also have a key known as a foreign key; such a key will have a value corresponding to the
primary key in another table. Each column in a table must be single-valued (the same data type)
and describes an attribute of the entity identified by the primary key; neither column nor row
order is significant in the relational model. Keep in mind that the relational model is a logical
model, and the physical model may have a different structure to it to facilitate the storage and
access to data.
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
22
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26) Describe the reason why it is acceptable to have null foreign key, but it is unacceptable to
have a null primary key. Use the concept of entity integrity rule and referential integrity rule in
your answer.
Answer: A primary key cannot uniquely identify a row in a table if it is null (blank). A nonnull
primary key ensures that every row in a table represents something and that it can be identified.
This is referred to as the entity integrity rule. Foreign keys link rows in one table to rows in
another table. This constraint, called the referential integrity rule, ensures database consistency.
Foreign keys can contain null values.
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Reflective Thinking
23
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27) In a relational database, requiring that every record in a table have a unique identifier is
called the
A) entity integrity rule.
B) referential integrity rule.
C) unique primary key rule.
D) foreign key rule.
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
28) The database requirement that foreign keys must be null or have a value corresponding to the
value of a primary key in another table is formally called the
A) entity integrity rule.
B) referential integrity rule.
C) unique primary key rule.
D) foreign key rule.
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
29) In a well-structured database, the constraint that ensures the consistency of the data is known
as the
A) entity integrity rule.
B) referential integrity rule.
C) unique primary key rule.
D) foreign key rule.
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
24
Copyright © 2018 Pearson Education, Inc.
30) Identify the statement below that is false with regards to basic requirements of a relational
database model.
A) Primary keys can be null.
B) Foreign keys, if not null, must have values that correspond to the value of a primary key in
another table.
C) All non-key attributes in a table should describe a characteristic about the object identified by
the primary key.
D) Every column in a row must be single-valued.
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
32) In the database design approach known as normalization, the first assumption made about
data is
A) there is no redundancy in the data.
B) the delete anomaly will not apply since all customer records will be maintained indefinitely.
C) everything is initially stored in one large table.
D) the data will not be maintained in 3NF tables.
Answer: C
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
25
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33) The database design method in which a designer uses knowledge about business processes to
create a diagram of the elements to be included in the database is called
A) normalization.
B) decentralization.
C) geometric data modeling.
D) semantic data modeling.
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
26
Copyright © 2018 Pearson Education, Inc.
36) Pat Owen is chair of the National Grizzly Society, which maintains a database of all grizzly
bears within the United States. One table will store the name, birth date, and other characteristics
of all of the grizzly bears that have been registered. Each grizzly bear is uniquely identified by a
registration number. A second table will contain data that link each grizzly bear to its male and
female parents by means of their registration numbers. The primary key in the first table is
A) name.
B) birth date.
C) the primary key in the second table.
D) a foreign key in the second table.
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
37) Pat Owen is chair of the National Grizzly Society, which maintains a database of all grizzly
bears within the United States. One table will store the name, birth date, and other characteristics
of all of the grizzly bears that have been registered. Each grizzly bear is uniquely identified by a
registration number. A second table will contain data that link each grizzly bear to its male and
female parents by means of their registration numbers. The primary key in the second table is
A) name.
B) birth date.
C) the same as the primary key in the first table.
D) a combination of primary keys in the first table.
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Reflective Thinking
38) Pat Owen is chair of the National Grizzly Society, which maintains a database of all grizzly
bears within the United States. One table will store the name, birth date, and other characteristics
of all of the grizzly bears that have been registered. Each grizzly bear is uniquely identified by a
registration number. A second table will contain data that link each grizzly bear to its male and
female parents by means of their registration numbers. The entities described by the second table
are
A) grizzly bears.
B) parental relationships.
C) registration numbers.
D) names.
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
27
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39) Tom Wilson is chairman of the Rare Car Club, where he maintains a database of registered
rare cars and their history. One table will store the model, make, vehicle identification number,
and other characteristics of all of the registered rare cars. Each rare car is uniquely identified by a
registration number. A second table will contain data that link each rare car to its most recent
estimated fair market value by means of their registration numbers. The entities described by the
first table are
A) rare cars.
B) estimated fair market value.
C) registration numbers.
D) vehicle identification numbers.
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
40) Tom Wilson is chairman of the Rare Car Club, where he maintains a database of registered
rare cars and their history. One table will store the model, make, vehicle identification number,
and other characteristics of all of the registered rare cars. Each rare car is uniquely identified by a
registration number. A second table will contain data that link each rare car to its most recent
estimated fair market value by means of their registration numbers. The primary key in the first
table is
A) vehicle identification number.
B) registration number.
C) model.
D) make.
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
28
Copyright © 2018 Pearson Education, Inc.
41) Abby Burke has created custom statues made out of scrap metal for over ten years. Abby has
kept detailed records of every statue she has ever created. For every sale, she obtains the
customer's name and address, a description of the statue, and a picture of the statue sold to the
customer. Her unique style has recently attracted the attention of several celebrities. Ready to
take her business to the next level, Abby has hired you to construct an accounting information
system, which she wants modeled after her paper records. You begin development of the
relational database that will form the core of the AIS by envisioning the record stored in a single
table with a column that represents each attribute. You then begin to break this table down into
smaller tables. This process is called
A) integration.
B) optimization.
C) minimization.
D) normalization.
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Reflective Thinking
42) Helen Fume is a recruiter with The Ladders in Nome, Alaska. The Ladders success is largely
attributable to its accounting information system. When a client is hired by an employer, Helen
creates a record that identifies the employment relationship. Helen follows up on placements by
surveying both employers and clients about the employment experience and then entering the
results into the AIS. Clients are uniquely identified by social security number. In records that
contain client survey data, the social security number is likely to be
A) the primary key.
B) a foreign key.
C) combined with other data fields to form a primary key.
D) null.
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
29
Copyright © 2018 Pearson Education, Inc.
43) Which of the following would not be one of the well-structured tables in a well-designed
relational database used to generate this sales invoice?
A) Customer Order
B) Customer
C) Sales
D) Sales Order
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Reflective Thinking
30
Copyright © 2018 Pearson Education, Inc.
44) Which of the following would not be true about the well-structured tables in a well-designed
relational database used to generate this sales invoice?
31
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45) Seacrest Bedding is changing from a file-oriented system to a relational database system.
Identify and design at least three tables that would be needed to capture data for a sales
transaction. Each table should include a primary key, three non-key attributes, and foreign keys
as necessary. Make up data values for two records within each table.
Answer: Customer table; ID (primary key), name, street address, city, state, zip code, phone
number, credit limit, salesperson ID (foreign key)
Salesperson table; ID (primary key), name, street address, city, state, zip code, phone number,
hire date, commission rate, base salary
Sales table; sales invoice number (primary key), date, amount, sales tax, shipping charge,
shipping method, customer ID (foreign key), salesperson ID (foreign key)
Inventory table; item ID (primary key), description, size, color, warehouse location, list price,
quantity on hand
Sales-Inventory table; sales invoice number and item ID (concatenated primary key), quantity
sold, sales price, extended amount
Students should also make up data values for two separate records for each table.
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Application of Knowledge
46) Kitchen World is changing its inventory system from a file-oriented system to a relational
database system. Identify and design at least three tables that would be needed to capture data for
Kitchen World's inventory. Each table should include a primary key, three non-key attributes, and
foreign keys as necessary. Make up data values for two records within each table.
Answer: Inventory table; item ID (primary key), description, size, color, warehouse location,
quantity on hand
Price table; ID (primary key), list price, discount, item ID (foreign key)
Sales table; sales invoice number (primary key), date, amount, sales tax, shipping charge,
shipping method
Sales-Inventory table; sales invoice number and item ID (concatenated primary key), quantity
sold, sales price, extended amount
Students should also make up data values for two separate records for each table.
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Application of Knowledge
32
Copyright © 2018 Pearson Education, Inc.
47) Which of the following elements link rows in one table to rows in another table?
A) Primary keys
B) Foreign keys
C) Semantic keys
D) Link keys
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
48) Suppose a relational database contained two linked tables. Which of the following items is
not necessarily present in the database?
A) Two primary keys
B) Two foreign keys
C) At least one column
D) One foreign key
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Analytical Thinking
49) Suppose a relational database contained two linked tables. Assuming the organization wants
the database to be normalized, which of the following items represents a problem to
normalization?
A) The database contains only one primary key.
B) The database contains two foreign keys.
C) The database contains two primary keys.
D) The database contains only one foreign key.
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Analytical Thinking
50) What are the two ways to query a database using Microsoft Access?
Answer: The two ways to query a database using Microsoft Access is by using either (1) the
Design view or (2) the Wizard.
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
33
Copyright © 2018 Pearson Education, Inc.
51) Which one of the following results corresponds to the query below?
A)
B)
C)
34
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D)
Answer: C
Concept: Relational databases
Objective: Learning Objective 6
Difficulty: Easy
AACSB: Analytical Thinking
35
Copyright © 2018 Pearson Education, Inc.
52) Which one of the following results corresponds to the query below?
A)
B)
C)
D)
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
36
Copyright © 2018 Pearson Education, Inc.
53) Which one of the following results corresponds to the query below?
A)
B)
C)
D)
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Reflective Thinking
37
Copyright © 2018 Pearson Education, Inc.
55) Using the database depicted above, how many primary keys are in the database?
A) 0
B) 3
C) 4
D) 5
Answer: C
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
56) Using the database depicted above, how many foreign keys are in the database?
A) 0
B) 3
C) 4
D) 5
Answer: B
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
38
Copyright © 2018 Pearson Education, Inc.
57) Using the database depicted above, "Item #" is best described as
A) an attribute.
B) a primary key.
C) a foreign key.
D) A, B, and C
Answer: D
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
58) Using the database depicted above, "Unit Price" is best described as
A) an attribute.
B) a primary key.
C) a foreign key.
D) A, B, and C
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
59) Using the database depicted above, in the Sales table, "Customer #" is best described as
A) an attribute.
B) a primary key.
C) a foreign key.
D) A, B, and C
Answer: A
Concept: Relational databases
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
39
Copyright © 2018 Pearson Education, Inc.
40
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Chapter 19
1 Describe the process for producing various managerial reports, the threats to that process, and
how tools like responsibility accounting and the balanced scorecard can help mitigate those
threats.
1) Which of the following statements about REA modeling and REA diagrams is false?
A) REA is an acronym for Resources, Entities, and Agents.
B) REA data modeling does not include traditional accounting elements such as ledgers, chart of
accounts, debits and credits.
C) REA data modeling could be referred to as an events-based model.
D) REA diagrams must include at least two activities, which together represent a give-get
economic exchange.
Answer: A
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
2) The REA data model approach facilitates efficient operations by all the following except
A) standardizing source document format.
B) identifying non-value-added activities.
C) storing financial and nonfinancial data in the same database.
D) organizing data to simplify data retrieval and analysis.
Answer: A
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
3) The process of defining a database so that it faithfully represents all aspects of the
organization including its interactions with the external environment is called
A) data modeling.
B) data designing.
C) data development.
D) data definition.
Answer: A
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
1
Copyright © 2021 Pearson Education, Inc.
4) In which stage(s) of the database design process does data modeling occur?
A) During the systems analysis stage.
B) During the design stage.
C) During both the systems analysis and design stages.
D) After the design stage.
Answer: C
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
6) ________ consists of translating the internal-level schema into the actual database structures
that will be
implemented in the new system.
A) Systems analysis
B) Conceptual design
C) Physical design
D) Implementation and conversion
Answer: C
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
7) ________ includes all the activities associated with transferring data from existing systems to
the new database AIS, testing the new system, and training employees how to use it.
A) Systems analysis
B) Conceptual design
C) Physical design
D) Implementation and conversion
Answer: D
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
2
Copyright © 2021 Pearson Education, Inc.
10) Explain specifically what is meant by the following statement: "Accountants can and should
participate in all stages of the database design process."
Answer: Accountants are in a unique position within a business organization. They are
intimately acquainted with the many business transactions that occur in an organization and they
are knowledgeable about the policies and practices of the business itself as well as the
environment within which it operates. The knowledge base and skill set of the accountant should
be put to good use in the development of database design to the fullest extent possible (although
some accountants may not possess AIS coding and development skill sets). Consider that during
the planning stage accountants provide some of the information used to evaluate the feasibility of
the proposed project and they participate in making the decision itself. Accountants can identify
user information needs and develop logical schema during the requirement analysis and design
stages. Accountants can also help test the accuracy of the new database and application programs
during the implementation stage of development. Accountants can also act as "subject matter
experts" since they are knowledgeable users of the new system. They can also serve as managers
of the system once it is up and running.
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
3
Copyright © 2021 Pearson Education, Inc.
11) In which stage(s) of the database design process is the completed data model used?
A) only in the systems analysis stage
B) only in the conceptual design stage
C) in both the systems analysis and design stages
D) neither the systems analysis nor the design stages
Answer: D
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Moderate
AACSB: Analytical Thinking
12) In which stage(s) of the database design process should accountants participate?
A) the systems analysis stage
B) the conceptual design stage
C) the implementation and conversion stage
D) in all of the stages above
Answer: D
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Easy
AACSB: Analytical Thinking
13) With regards to the database design process, accountants may provide the greatest value to
their organization by participating in
A) implementation and conversion.
B) data modeling.
C) database operation and maintenance.
D) system auditing.
Answer: B
Concept: Database design process
Objective: Learning Objective 1
Difficulty: Challenging
AACSB: Analytical Thinking
1) A(n) ________ diagram graphically depicts a database's contents by showing entities and
relationships.
A) data flow
B) flowchart
C) entity-relationship
D) REA
Answer: C
Concept: Entity-relationship diagrams
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
4
Copyright © 2021 Pearson Education, Inc.
4) An entity-relationship diagram
A) can represent the contents of any database.
B) is only used in conjunction with REA models.
C) can show a limited number of entities and relationships.
D) is used only to design new databases.
Answer: A
Concept: Entity-relationship diagrams
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
5) Besides modeling entities as rectangles, there are no industry standards for entity-relationship
diagrams.
Answer: TRUE
Concept: Entity-relationship diagrams
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
5
Copyright © 2021 Pearson Education, Inc.
9) A graphical depiction of a database's contents showing the various entities being modeled and
the important relationships among them is called a(n)
A) REA diagram.
B) data diagram.
C) ERP diagram.
D) ER diagram.
Answer: D
Concept: Entity-relationship diagrams
Objective: Learning Objective 2
Difficulty: Moderate
AACSB: Analytical Thinking
10) E-R diagrams can be used to represent the contents of any kind of database.
Answer: TRUE
Concept: Entity-relationship diagrams
Objective: Learning Objective 2
Difficulty: Easy
AACSB: Analytical Thinking
6
Copyright © 2021 Pearson Education, Inc.
2) Which of the following is not one of the rules in creating an REA data model?
A) Each event is linked to at least one resource that it affects.
B) Each event is linked to at least one other event.
C) Each event is linked to at least two participating agents.
D) All of the above are important rules.
Answer: D
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Easy
AACSB: Analytical Thinking
7
Copyright © 2021 Pearson Education, Inc.
4) Relationships that affect the quantity of a resource are sometimes referred to as ________
relationships.
A) commitment
B) exchange
C) stockflow
D) duality
Answer: C
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
9) Identify the item below that would be classified as a resource by the REA data model.
A) An IOU from a customer.
B) The customer.
C) A customer sale.
D) A loan from a vendor.
Answer: A
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
10) Identify the item below that would be classified as an event by the REA data model.
A) An IOU from a customer.
B) The customer.
C) A customer sale.
D) A loan from a vendor.
Answer: C
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
11) Identify the item below that would be classified as an agent by the REA data model.
A) An IOU from a customer.
B) The customer.
C) A customer sale.
D) A loan from a vendor.
Answer: B
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
9
Copyright © 2021 Pearson Education, Inc.
12) What is the minimum number of agents that must participate in each REA event?
A) 0
B) 2
C) 1
D) 3
Answer: C
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
13) What is the minimum number of external agents that must participate in each REA event?
A) 0
B) 2
C) 1
D) 3
Answer: A
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Moderate
AACSB: Analytical Thinking
14) Assume that you are looking at a REA diagram that depicts only one event. Which of the
following must be on the REA diagram?
A) An external agent.
B) An internal agent.
C) both A and B
D) neither A nor B
Answer: B
Concept: The REA data model
Objective: Learning Objective 3
Difficulty: Challenging
AACSB: Analytical Thinking
10
Copyright © 2021 Pearson Education, Inc.
2) Identify the notation below that is not used to represent cardinality information.
A) UML.
B) (Min, Max).
C) DFD.
D) Maximums only.
Answer: C
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Challenging
AACSB: Analytical Thinking
3) Every citizen in the United States has one social security number, but no two citizens have the
same social security number. Thus, the cardinality that exists between social security numbers
and citizens is
A) one-to-one.
B) one-to-many.
C) many-to-many.
D) many-to-none.
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Reflective Thinking
4) Every person in the world has a birthdate, but no person has more than one birthdate. Thus,
the cardinality that exists between birthdate and people is
A) one-to-one.
B) one-to-many.
C) many-to-many.
D) many-to-none.
Answer: B
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Reflective Thinking
5) Every person in the world can have more than one friend, and each person in the world can be
a friend to more than one person. Thus, the cardinality that exists between friends and people is
A) one-to-one.
B) one-to-many.
C) many-to-many.
D) many-to-none.
Answer: C
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Reflective Thinking
11
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6) Every company can have more than one banking relationships, and each bank can have a
business relationship with more than one company. Thus, the cardinality that exists between
company and bank is
A) one-to-one.
B) one-to-many.
C) many-to-many.
D) many-to-none.
Answer: C
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Reflective Thinking
7) An REA diagram must link every event to at least one ________ and two ________.
A) resource; agents
B) agent; resources
C) transaction; entities
D) resource; relationships
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Easy
AACSB: Analytical Thinking
8) What is the standard cardinality pattern for a relationship between an event and an agent?
A) 1:1.
B) 0:1.
C) 0:N.
D) 1:N.
Answer: D
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Challenging
AACSB: Reflective Thinking
9) Each event in an REA model will in most cases have at least one ________ agent and one
________ agent involved with the event.
A) internal; resource
B) external; entity
C) internal; employee
D) internal; external
Answer: D
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Easy
AACSB: Analytical Thinking
12
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10) Which of the following statements is true about the development of an REA model?
A) Events that pertain to the entry of data are included in the REA model.
B) The objective is to model basic value-chain activities.
C) REA diagrams model individual transactions and data collections.
D) Information retrieval events are modeled as events in the REA model.
Answer: B
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
11) The first step in developing an REA diagram for a specific transaction cycle begins with
identifying
A) relevant events.
B) agents involved.
C) resources affected.
D) relationship cardinalities.
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Easy
AACSB: Analytical Thinking
12) Identify the statement below that is false with respect to cardinalities.
A) Cardinalities describe the nature of the relationship between two entities.
B) No universal standard exists for representing information about cardinalities in REA
diagrams.
C) The minimum cardinality can be zero or one.
D) The maximum cardinality can be zero, one, or many.
Answer: D
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
13
Copyright © 2021 Pearson Education, Inc.
16) Identify the most likely relationship where cardinalities have zero minimums and N
maximums.
A) Agent-event relationship.
B) Resource-event relationship.
C) Event-event relationship.
D) Agent-agent relationship.
Answer: B
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Reflective Thinking
14
Copyright © 2021 Pearson Education, Inc.
19) Which of the following graphical symbols represents a minimum cardinality of zero and a
maximum cardinality of one?
A)
B)
C)
D)
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
20) Which of the following graphical symbols represents a minimum cardinality of zero and a
maximum cardinality of many?
A)
B)
C)
D)
Answer: C
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
15
Copyright © 2021 Pearson Education, Inc.
21) Which of the following graphical symbols represents a minimum cardinality of one and a
maximum cardinality of one?
A)
B)
C)
D)
Answer: B
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
22) Which of the following graphical symbols represents a minimum cardinality of one and a
maximum cardinality of many?
A)
B)
C)
D)
Answer: D
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
16
Copyright © 2021 Pearson Education, Inc.
23) A relationship is diagrammed below using the [Min, Max] notation. Which of the diagrams
below represents the same relationship using the "crow's feet" notation?
A)
B)
C)
D)
Answer: D
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Challenging
AACSB: Analytical Thinking
17
Copyright © 2021 Pearson Education, Inc.
24) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge
purchases inventory from distributors at trade conventions. Each time Helge makes a purchase,
the company records the suppliers name, address, date, specific items purchased, price paid for
each, and the total amount spent. Helge later researches the inventory items to set the customer
price. The company assigns an inventory number to each item purchased and records the
customer price for each item. Helge buys price tags and display supplies from Alwin
Incorporated, a company that sells them at all trade conventions. All inventory and supplies
purchases are immediately paid for with cash or with checks from a bank account in Helge's
name. All cash received from sales are also deposited to the same bank account. Several times a
year Helge rents display space at dealer conventions. A deposit is always required, and the entire
fee is due the day the convention starts. Helge records the deposit and final payment, along with
the convention's name and address, in the same worksheet on which purchases of inventory and
supplies are recorded.
Consider Helge's processes regarding the purchasing inventory and supplies, renting display
space, and paying for purchased items. A well-designed REA diagram would
A) include eight unique entities.
B) include nine unique entities.
C) include seven unique entities.
D) include ten unique entities.
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Challenging
AACSB: Reflective Thinking
18
Copyright © 2021 Pearson Education, Inc.
25) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge
purchases inventory from distributors at trade conventions. Each time Helge makes a purchase,
the company records the suppliers name, address, date, specific items purchased, price paid for
each, and the total amount spent. Helge later researches the inventory items to set the customer
price. The company assigns an inventory number to each item purchased and records the
customer price for each item. Helge buys price tags and display supplies from Alwin
Incorporated, a company that sells them at all trade conventions. All inventory and supplies
purchases are immediately paid for with cash or with checks from a bank account in Helge's
name. All cash received from sales are also deposited to the same bank account. Several times a
year Helge rents display space at dealer conventions. A deposit is always required, and the entire
fee is due the day the convention starts. Helge records the deposit and final payment, along with
the convention's name and address, in the same worksheet on which purchases of inventory and
supplies are recorded.
Consider Helge's processes regarding the purchasing inventory and supplies, renting display
space, and paying for purchased items. A well-designed REA diagram would
A) reflect nine 1:N relationships.
B) reflect two M:N relationships.
C) reflect ten 1:N relationships.
D) include two 1:1 relationships.
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Challenging
AACSB: Reflective Thinking
19
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26) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge
purchases inventory from distributors at trade conventions. Each time Helge makes a purchase,
the company records the suppliers name, address, date, specific items purchased, price paid for
each, and the total amount spent. Helge later researches the inventory items to set the customer
price. The company assigns an inventory number to each item purchased and records the
customer price for each item. Helge buys price tags and display supplies from Alwin
Incorporated, a company that sells them at all trade conventions. All inventory and supplies
purchases are immediately paid for with cash or with checks from a bank account in Helge's
name. All cash received from sales are also deposited to the same bank account. Several times a
year Helge rents display space at dealer conventions. A deposit is always required, and the entire
fee is due the day the convention starts. Helge records the deposit and final payment, along with
the convention's name and address, in the same worksheet on which purchases of inventory and
supplies are recorded.
Consider Helge's processes regarding the purchasing inventory and supplies, renting display
space, and paying for purchased items. A well-designed REA diagram would
A) reflect minimum cardinalities of 1 for the relationship between Vendor and Cash
Disbursement entities.
B) reflect the same number of 0 and 1 minimum cardinalities.
C) reflect more maximum cardinalities of M than of 1.
D) reflect maximum cardinalities of M for the relationship between Inventory and Purchase
entities.
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Challenging
AACSB: Reflective Thinking
20
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27) Helge Autoparts sells new and refurbished auto parts exclusively to auto dealers. Helge
purchases inventory from distributors at trade conventions. Each time Helge makes a purchase,
the company records the suppliers name, address, date, specific items purchased, price paid for
each, and the total amount spent. Helge later researches the inventory items to set the customer
price. The company assigns an inventory number to each item purchased and records the
customer price for each item. Helge buys price tags and display supplies from Alwin
Incorporated, a company that sells them at all trade conventions. All inventory and supplies
purchases are immediately paid for with cash or with checks from a bank account in Helge's
name. All cash received from sales are also deposited to the same bank account. Several times a
year Helge rents display space at dealer conventions. A deposit is always required, and the entire
fee is due the day the convention starts. Helge records the deposit and final payment, along with
the convention's name and address, in the same worksheet on which purchases of inventory and
supplies are recorded.
Consider Helge's processes regarding the purchasing inventory and supplies, renting display
space, and paying for purchased items. In a well-designed REA diagram, what entities would
reflect economic duality?
A) Purchases and Cash Disbursements
B) Display Space Rental and Cash Disbursements
C) Inventory and Purchases
D) Cash and Cash Disbursements
Answer: A
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Challenging
AACSB: Reflective Thinking
21
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28) Prescott Dolls sells porcelain dolls exclusively at antique shows. Prescott Dolls purchases
inventory from individuals at garage sales, flea markets, antique malls, and estate sales. Each
time Dahlia Prescott (the owner) makes a purchase, she records the person's name, address, date,
specific items purchased and price paid, and total amount spent. Later at home, Dahlia cleans,
researches and prices the inventory for sale to customers. She assigns an inventory number to
each item and records the "asking" price. Dahlia buys price tags and display supplies from a
company that sells at flea market and antique shows. All inventory and supplies purchases are
immediately paid for using cash or with company checks from a bank account in Prescott Dolls'
name. Cash received from customer sales are also deposited in this account. Three times a year,
Dahlia rents a booth at antique shows. A deposit is always required, with the balance due at the
start of the show. Dahlia records the deposit and final payment, along with the show organizer's
name and address, in the same worksheet on which purchases of inventory and supplies are
recorded.
Draw an REA diagram for Prescott Dolls, related to purchasing inventory and supplies, renting
booths, and paying for all items.
Answer:
22
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30) Describe the three basic rules that apply to the REA model pattern.
Answer: Each event is linked to at least one resource that it affects. Each event is linked to at
least one other event. Each event is linked to at least two participating agents.
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Easy
AACSB: Analytical Thinking
32) Explain how an AIS system can be viewed as a set of "give-to-get" exchanges.
Answer: An AIS system can be viewed as a set of "give-to-get" exchanges because such
exchanges reflect the nature of the five transaction cycles: revenue, expenditure, human
resources, production, and financing. In each cycle the organization "gives" some resource in
exchange for another resource (the "get" part of the transaction). The goal is that the "give" part
of the exchange is of lesser value than the "get" portion, thus generating a profit for the
organization. The AIS should capture, record, and organize information relating to any
transaction that occurs within a cycle.
Concept: Developing an REA diagram
Objective: Learning Objective 4
Difficulty: Moderate
AACSB: Analytical Thinking
23
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35) A dental office employs three dentists and five dental hygienists. One of the dentists is a very
recent dental school graduate and can't yet see patients on her own until she passes boards and
obtains a license. Dentists perform all procedures personally, except for regular cleaning and x-
rays, which are performed exclusively by dental hygienists. Three of the five dental hygienists
perform only regular cleaning and x-rays. The other two hygienists each assist a specific dentist
during procedures, as well as performing regular cleaning and x-rays. One of the hygienists will
be assigned to the new dentist when she begins seeing patients. Hygienists usually 'shadow' other
hygienists and dentists for two weeks prior to seeing patients.
Patients schedule appointments directly with dentists and hygienists, depending on the type of
dental service needed. Patients do not have to choose a dentist until they need service other than
routine cleaning or x-rays. Patients are assigned to a specific dental hygienist when they schedule
their first appointment. The customer master file has 549 records. Diagram the agents described,
relationships between agents, and the cardinality pairs for each relationship.
Answer:
25
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5 Read an REA diagram and explain what it reveals about the business activities and policies of
the organization being modeled.
26
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A) A lumber yard where customers may pay with cash for all purchases.
B) A buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to the
dealer.
C) A consulting firm that offers a variety of consulting services to other businesses.
D) A department store that allows customers to carry a balance and to make installment
payments, if they choose.
Answer: A
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
A) A lumber yard where customers may pay with cash for all purchases.
B) A buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to the
dealer.
C) A consulting firm that offers a variety of consulting services to other businesses.
D) A department store that allows customers to carry a balance and to make installment
payments, if they choose.
Answer: B
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
28
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A) A lumber yard where customers may pay with cash for all purchases.
B) A buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to the
dealer.
C) A consulting firm that offers a variety of consulting services to other businesses.
D) A department store that allows customers to carry a balance and to make installment
payments, if they choose.
Answer: C
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
A) A lumber yard where customers may pay with cash for all purchases.
B) A buy-here-pay-here auto dealer where a car buyer sends monthly cash payments to the
dealer.
C) A consulting firm that offers a variety of consulting services to other businesses.
D) A department store that allows customers to carry a balance and to make installment
payments, if they choose.
Answer: D
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
29
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A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept
or allow installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply
to multiple purchases.
Answer: B
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept
or allow installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply
to multiple purchases.
Answer: C
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
30
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A) Vendors send a bill for each inventory item purchased which is payable on receipt.
B) A single purchase of inventory is paid for with multiple payments.
C) Inventory vendors send a monthly bill for merchandise delivered. The seller does not accept
or allow installment payments.
D) Some inventory purchases are paid for with multiple payments and some payments may apply
to multiple purchases.
Answer: D
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
A) Each sale is associated with a single order, and there is a time lag between the time an order is
taken and delivery of the product.
B) Each sale can be comprised of multiple orders, and each order can be associated with multiple
sales or no sales.
C) Each sale can be comprised of multiple orders, and each order can be associated with one or
more multiple sales.
D) Each sale is associated with a single order and, there is no time lag between the time an order
is taken and delivery of the product.
Answer: A
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
31
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A) Each sale is associated with a single order, and there is a time lag between the time an order is
taken and delivery of the product.
B) Each sale can be comprised of multiple orders, and each order can be associated with multiple
sales or no sales.
C) Each sale can be comprised of multiple orders, and each order can be associated with one or
more sales.
D) Each sale is associated with a single order, and there is no time lag between the time an order
is taken and delivery of the product.
Answer: B
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
A) Each sale is associated with a single order, and there is a time lag between the time an order is
taken and delivery of the product.
B) Each sale can be comprised of multiple orders, and each order can be associated with multiple
sales or no sales.
C) Each sale can be comprised of multiple orders, and each order can be associated with one or
more sales.
D) Each sale is associated with a single order, and there is no time lag between the time an order
is taken and delivery of the product.
Answer: C
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
32
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A) Each sale is associated with a single order, and there is a time lag between the time an order is
taken and delivery of the product.
B) Each sale can be comprised of multiple orders, and each order can be associated with multiple
sales or no sales.
C) Each sale can be comprised of multiple orders, and each order can be associated with one or
more sales.
D) Each sale is associated with a single order, and there is no time lag between the time an order
is taken and delivery of the product.
Answer: D
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Challenging
AACSB: Reflective Thinking
16) The choice of cardinalities is often arbitrary to reflect facts about the organization being
modeled and its business practices.
Answer: FALSE
Concept: REA diagram and the organization
Objective: Learning Objective 5
Difficulty: Easy
AACSB: Analytical Thinking
33
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