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Accounting Information Systems, 12e (Romney/Steinbart)

Chapter 19 Special Topics in REA Modeling


1) Explicitly identifying the different employees who participate in each event by their job functions is
helpful when verifying
A) internal controls.
B) job descriptions.
C) proper supervision.
) segregation of duties.
Answer!
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AAC(B! Analytic
)) 'any companies sell software* music* or digital photographs over the +nternet. ,hey give up a digital
copy of those resources* but not the actual resource itself. -ow will this company.s #EA model differ
from those selling traditional inventory/
A) ,hese companies do not need an +nventory table.
B) ,he structure of +nventory table is completely different from that of mass0produced merchandise.
C) ,he +nventory table is only different in that it doesn.t need attributes such as 1uantity0on0hand*
1uantity0available* reorder point* and standard reorder 1uantity.
) ,he +nventory table need not include information about the standard list price of each item and its
description.
Answer! C
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AAC(B! Analytic
2) +n an expanded revenue cycle #EA diagram* sales order number is most li3ely to be a foreign 3ey in
A) Call on Customer.
B) 4ill Customer %rder.
C) (hip %rder.
) ,a3e Customer %rder.
Answer! B
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AAC(B! Analytic
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5) +n an expanded revenue cycle #EA diagram* sales order number is most li3ely to be a primary 3ey in
A) Call on Customers.
B) 4ill Customer %rder.
C) (hip %rder.
) ,a3e Customer %rder.
Answer!
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AAC(B! Analytic
$) +n an expanded revenue cycle #EA diagram* customer number is least li3ely to be a foreign 3ey in
A) Call on Customers.
B) Customers.
C) 4ill Customer %rder.
) ,a3e Customer %rder.
Answer! B
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AAC(B! Analytic
9) +n an expanded revenue cycle #EA diagram* pic3ing tic3et number is most li3ely to be a primary 3ey
in
A) Call on Customers.
B) 4ill Customer %rder.
C) (hip %rder.
) ,a3e Customer %rder.
Answer! B
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AAC(B! Analytic
:) +n an expanded revenue cycle #EA diagram* pic3ing tic3et number is most li3ely to be a foreign 3ey
in
A) Customers.
B) 4ill Customer %rder.
C) (hip %rder.
) ,a3e Customer %rder
Answer! C
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AAC(B! Analytic
)
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;) +n an #EA model* rental transactions differ from sales transactions in that
A) each rental has a part number.
B) each rental has a uni1ue serial number.
C) rental transactions re1uire completely different #EA models than sales transactions.
) All of the above are ways in which rental transactions differ from sales transactions.
Answer! B
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AAC(B! Analytic
6) Concerning the relationship from the #ent +tem to the #eceive Cash events! ,he minimum cardinality
is <<<<<<<< because customers typically pay first* prior to ta3ing possession of the item. ,he maximum
cardinality is <<<<<<<< because there may be additional charges imposed when the item is returned.
A) 8*1
B) 1*1
C) 1*=
) =*'
Answer! C
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AAC(B! Analytic
18) ,he relationship between the #ent +tem and #eturn +tem events is most li3ely 1!1 for all except
which of the following reasons/
A) A return must be for a rented item.
B) A rented item can only be returned once.
C) #ented items are accounted for separately.
) All rented items must be returned.
Answer!
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AAC(B! Analytic
11) +n an expenditure cycle diagram* which of the following is an example of an event that larger
organi>ations might want to include in their extended #EA model/
A) #e1uest
B) %rder
C) (hip %rder
) 4ill %rder
Answer! A
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AAC(B! Analytic
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1)) Concerning cost data* which of the following is false/
A) Cost information is stored in several tables.
B) (tandard cost is stored as an attribute of the +nventory table because it is the same for all units of a
given inventory item for a fiscal year.
C) +n contrast* the actual cost of inventory is stored in a relationship table because prices can vary over
time.
) Actual cost can be stored as an attribute of the +nventory table for organi>ations that value inventory
based on the most recent amount paid.
Answer!
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AAC(B! Analytic
12) ?hich is the most li3ely primary 3ey for the +nventory@#e1uest<Aoods table/
A) "roduct number
B) "roduct number 0 "urchase order number
C) "roduct number 0 "urchase re1uisition number
) "urchase re1uisition number
Answer! C
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AAC(B! Analytic
15) ?hich is the most li3ely primary 3ey for the "ay for Aoods table/
A) Cash transaction number
B) Chec3 number
C) +nvoice number
) #eceiving report number* chec3 number
Answer! B
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AAC(B! Analytic
1$) 4or a service business* the minimum cardinalities between (ales event and +nventory entity are most
li3ely both 8 for all except which of the following reasons/
A) (ervice businesses don.t sell inventory* they only use inventory to perform services.
B) A sale doesn.t have to include any inventory.
C) +nventory can exist that hasn.t been part of a sale yet.
) (ome services only re1uire labor.
Answer! A
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AAC(B! Analytic
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19) ,he minimum cardinality from the (ales event to the (ervices entity is most li3ely 1 because
A) every sale includes performing a service.
B) a service is only recorded once a sale has occurred.
C) only 1 service is provided for each sale.
) the minimum cardinality would not be 1B it would most li3ely be 8.
Answer! A
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AAC(B! Analytic
1:) A dental office would li3ely model the relationships between the (ales event and both the (ervices
and (upplies #esource entities as
A) '!=
B) 1!1
C) 1!=
) 8!1
Answer! A
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AAC(B! Analytic
1;) +n a relational database* details about activities such as Cleaning* C0#ays* 4illings* #oot Canals*
Crowns* and Extractions would all be stored in which table/
A) (ervices
B) (ales
C) +nventory
) ,hose activities would be stored as part of a relationship* not a table.
Answer! A
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AAC(B! Analytic
16) '!= agent0event relationships occur whenever an activity is performed by <<<<<<<< employee and
management wants to retain the ability to monitor <<<<<<<< performance.
A) more than oneB group
B) more than oneB individual
C) oneB group
) oneB individual
Answer! B
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AAC(B! Analytic
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)8) ,he minimum cardinalities between a location* such as ?arehouse* and a resource* li3e +nventory*
will li3ely be 8 for all except which of the following reasons/
A) %ne specific inventory item could be stored at several different warehouses.
B) A warehouse could be currently empty.
C) =ot all 3inds of inventory are stored at each warehouse.
) +nventory could include products not yet available for sale.
Answer! A
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AAC(B! Analytic
)1) (ince the same inventory items may be stored in several different warehouses* the maximum
cardinality from +nventory to ?arehouse is most li3ely <<<<<<<<.
A) 8
B) =
C) 1
) determined by the number of warehouses compared to the number of inventory items
Answer! B
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AAC(B! Analytic
))) #elationships between resources and agents* such as +nventory and (upplier* reflect the best practice
of identifying preferred and alternative suppliers for specific inventory items. (imilar relationships
between resources and employees can be used to model <<<<<<<< and <<<<<<<<.
A) costB revenue
B) performanceB behavior
C) responsibilityB accountability
) segregation of dutiesB internal control
Answer! C
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AAC(B! #eflective ,hin3ing
)2) ?arehouse number is most li3ely to be a foreign 3ey in!
A) %rder +nventory
B) isburse Cash
C) #eceive +nventory
) +nventory
Answer! C
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AAC(B! Analytic
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)5) (upplier number is least li3ely to be a foreign 3ey in!
A) %rder +nventory
B) isburse Cash
C) #eceive +nventory
) ?arehouse
Answer!
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AAC(B! Analytic
)$) 4inancial +nstitution number is most li3ely to be a foreign 3ey in!
A) Cash
B) isburse Cash
C) #eceive +nventory
) ?arehouse
Answer! A
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AAC(B! Analytic
)9) ,he cardinality pair from the 4inancial +nstitution entity to the Cash resource has a <<<<<<<<
minimum and an <<<<<<<< maximum because companies will probably only 3eep information about
financial institutions with which they have accounts but may have more than one account at the same
financial institution.
A) 8B =
B) 8B 1
C) 1B =
) 'B =
Answer! C
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AAC(B! Analytic
):) (upplier number is most li3ely to be a foreign 3ey in!
A) +nventory@#e1uest<+nventory
B) #eceive +nventory
C) (upplier
) ?arehouse
Answer! B
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AAC(B! Analytic
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);) +n an #EA diagram for -#'Dpayroll cycles* the <<<<<<<< entity is lin3ed to almost every other
entity in the diagram.
A) Employee
B) Eob title
C) "ayroll
) ?or3er +..
Answer! A
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AAC(B! Analytic
)6) +n the human resources #EA model* the relationship between (3ills and Employees is typically
modeled as '!= because
A) one employee may possess many s3ills* and one s3ill may be possessed by more than one employee.
B) many employees possess s3ills* and many s3ills are possessed by employees.
C) employees can be trained to learn all s3ills* and all s3ills are possessed by at least one employee.
) the relationship would be 1!= not '!=* because most employees are hired for a specific job that
re1uires a specific s3ill* even though a specific job could be done by many employees.
Answer! A
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AAC(B! Analytic
28) ,he <<<<<<<< entity stores much of the data typically found in the employee Fpayroll) master file.
A) ,ime ?or3ed
B) Employee
C) -#
) "ayroll
Answer! B
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AAC(B! Analytic
21) +n an #EA diagram for the -#D"ayroll cycle* the relationship between Employees and ,raining is
typicallty '!= for all except which of the following reasons/
A) %ne employee may attend the same training event more than once.
B) Each employee may attend more than one training event.
C) Each training event may have more than one employee attend.
) %ne training event may be offered more than once.
Answer! A
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AAC(B! Analytic
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2)) +n an #EA diagram for the -#D"ayroll cycle* the <<<<<<<< relationship between (3ills and
#ecruiting reflects the fact that one specific advertisement may list several specific s3ills and* over time*
there may be several advertisements for one specific s3ill.
A) 1!1
B) 1!=
C) '!=
) 8!=
Answer! C
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AAC(B! Analytic
22) ,he +nterview event stores detailed data about each job interview. (ince hiring only happens once*
but there may have been several interviews* +nterview is lin3ed to the -ire Employees event in aFn)
<<<<<<<< relationship.
A) 1!=
B) 1!1
C) '!=
) 8!=
Answer! A
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AAC(B! Analytic
25) ?hen modeling the issuance of debt* the maximum cardinality from isburse Cash to +ssue ebt is
1 because
A) interest is usually only paid at the maturity date.
B) one chec3 is written for the total interest due.
C) the +ssue ebt event is not related to isburse Cash eventB cash is received* not given.
) the minimum cardinality would be 1* but the maximum cardinality should be =.
Answer! B
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AAC(B! Analytic
2$) ,he temporal difference between #e1uest +nventory and %rder +nventory is reflected by the
A) #e1uest +nventory minimum cardinality of 1.
B) #e1uest +nventory maximum of =.
C) %rder +nventory maximum of =.
) %rder +nventory minimum of 8.
Answer!
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AAC(B! #eflective ,hin3ing
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29) ,he relationship between the isburse Cash and +ssue (toc3 events is modeled as being '!= for all
except which of the following reasons/
A) %ne dividend chec3 could be paid to shareholders that purchased stoc3 at different times.
B) (hareholders could receive several dividend chec3s over time.
C) Chec3s must be written to each shareholder for dividend payments.
) (toc3 can be issued more than once over a period of time.
Answer! C
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2:) ,he relationship between the Ac1uire (ervices and isburse Cash events is modeled as <<<<<<<< to
reflect the common situation in which the organi>ation obtains the use of a specific service for a
particular period of time and ma3es a payment each month for the services it ac1uired and used that
month.
A) 1!1
B) 1!=
C) '!=
) none of the above
Answer! A
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AAC(B! Analytic
2;) +t is not necessary to connect the ,ime Gsed entity to specific business events* however* doing so
facilitates
A) evaluating performance at a very detailed level.
B) general performance evaluation.
C) evaluating the 1uality of the services received.
) determining productivity of employees* such as how many customer calls were made* or how many
sales were made.
Answer! A
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AAC(B! Analytic
26) An #EA diagram for the production cycle models the relationships between the "erform Eob
%perations event and the Eob %perations &ist entity* as 1!= because
A) time standards change over time.
B) one specific activity has only one standard time for completion.
C) activities are only performed once on wor3 in process jobs.
) many activities are usually re1uired for specific wor3 in process jobs.
Answer! B
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AAC(B! Analytic
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58) ata about actual raw materials used in production is stored in the <<<<<<<< entity.
A) 4inished goods
B) #aw materials
C) #aw materials issuance
) ?or30in0process
Answer! C
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AAC(B! Analytic
51) ,he <<<<<<<< entity is used to collect and summari>e data about the raw materials* labor* and
machine operations used during production of inventory.
A) 4inished Aoods +nventory
B) #aw 'aterials
C) +ssue #aw 'aterials
) ?or30in0"rocess
Answer!
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AAC(B! Analytic
5)) +n the table called "erform 'achine %perations* which is the most li3ely primary 3ey/
A) E1uipment number
B) Eob %peration number
C) 'achine %peration =umber
) 'achine %perations &ist =umber
Answer! C
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AAC(B! Analytic
52) Employee number is most li3ely to be a foreign 3ey in
A) "erform Eob %perations.
B) "erform 'achine %perations.
C) 'achine %perations &ist.
) ?or3 in "rocess.
Answer! A
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AAC(B! Analytic
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55) ,here are four main events of interest included in a typical production cycle #EA diagram. ?hich of
the following is not one of them/
A) +ssuance of raw materials
B) %rder raw materials
C) Gse of labor in production
) Gse of machinery and e1uipment in production
Answer! B
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AAC(B! Analytic
5$) %ne of the benefits of an integrated enterprise0wide data model is that
A) auditors can use it to guide the development of 1ueries to validate the completeness and accuracy of
transaction processing.
B) journals and ledgers will be more accurate than in a traditional A+( data model.
C) wor3ers can understand information flows better.
) all of the above are benefits of an integrated enterprise0wide data model.
Answer! A
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AAC(B! Analytic
59) ?hich of the following diagrams represents the cardinality pairs for a typical* hierarchical
organi>ation/
A)
B)
C)
)
Answer! B
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AAC(B! Analytic
1)
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5:) ?hich of the following diagrams represents the cardinality pairs for a C"A firm where managers
drop off tax files in a .chec3 out. area* and any available employee can chec3 out the file and complete
the return for the manager. %f course* employees are always wor3ing on more than one return at a time*
and all managers are dropping off files.
A)
B)
C)
)
Answer!
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AAC(B! Analytic
5;) ?hich of the following diagrams represents the cardinality pairs in a situation where a specific s3ill
is taught at training sessions held periodically* but training is not offered for all s3ills/
A)
B)
C)
)
Answer! A
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AAC(B! Analytic
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56) ?hich of the following accurately represents typical cardinalities for two entities in the finance
cycle/
A)
B)
C)
)
Answer! C
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AAC(B! Analytic
$8) ?hich of the following accurately represents typical cardinalities for two entities in the finance
cycle/
A)
B)
C)
)
Answer!
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AAC(B! Analytic
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$1) ?hich of the following diagrams represents the cardinality pairs in a situation where a finished
product re1uires one or more machine operations* and machines usage is recorded to specific production
runs/
A)
B)
C)
)
Answer!
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AAC(B! Analytic
1$
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$)) ?hich of the following diagrams represents the cardinality pairs in a situation where a finished
product re1uires one or more labor operations* and labor usage is recorded to specific production runs/
A)
B)
C)
)
Answer! B
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AAC(B! Analytic
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$2) ?hich of the following diagrams represents the cardinality pairs in a situation where a specific
production run results in a specific finished good* and a specific finished good is produced periodically/
A)
B)
C)
)
Answer! C
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AAC(B! Analytic
$5) ?hich of the following diagrams represents the cardinality pairs in a situation where some services
are offered that have not been performed* other services have been performed many times* and
sometimes several services are provided together for a client/
A)
B)
C)
)
Answer!
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AAC(B! Analytic
1:
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$$) ?hich of the following accurately represents typical cardinalities for two entities in the production
cycle/
A)
B)
C)
)
Answer! A
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AAC(B! Analytic
$9) ?hich of the following accurately represents typical cardinalities for two entities in the -#D"ayroll
cycle/
A)
B)
C)
)
Answer! C
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AAC(B! Analytic
1;
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$:) ?hich of the following diagrams represents the cardinality pairs in a situation where interviews are
conducted individually and potential employees are able to interview for more than one position* or the
same position at different times/
A)
B)
C)
)
Answer!
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AAC(B! Analytic
$;) ?hich of the following diagrams represents the cardinality pairs in a situation where many people
will apply for a specific position* and some of the applicants have applied in the past/
A)
B)
C)
)
Answer! B
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AAC(B! Analytic
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$6) ?hich of the following diagrams represents the cardinality pairs in a situation where supervisors
conduct individual performance evaluations with each of the employees they supervise/
A)
B)
C)
)
Answer! A
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AAC(B! Analytic
98) ?hich of the following diagrams represents the cardinality pairs in a situation where a business that
rents power tools Fnot all of which get rented) writes separate rental agreements for each tool* so renters
don.t have to return all items at the same time/
A)
B)
C)
)
Answer!
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AAC(B! Analytic
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91) ?hich of the following diagrams represents the cardinality pairs in a situation where rented items
must be returned intact* and several rented items could be returned at the same time/
A)
B)
C)
)
Answer! B
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AAC(B! Analytic
9)) ?hich of the following diagrams represents the cardinality pairs in a situation where deliveries are
fre1uently made to the specific warehouse where the goods will be stored/
A)
B)
C)
)
Answer! B
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AAC(B! Analytic
)1
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92) ?hich of the following diagrams represents the cardinality pairs in a situation where one or more
warehouses are currently empty due to downsi>ing* and production of new products has been delayed
due to difficulty obtaining materials/
A)
B)
C)
)
Answer! A
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AAC(B! Analytic
95) ?hich of the following diagrams represents the cardinality pairs in a situation where goods don.t
have to be re1uisitioned* but if they are* re1uisitions are approved and processed before purchase orders
are issued/
A)
B)
C)
)
Answer!
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AAC(B! Analytic
))
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9$) ?hich of the following diagrams represents the cardinality pairs in a situation where customer
orders are filled one by one* but not all ordered items may be available at all times/
A)
B)
C)
)
Answer! B
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AAC(B! Analytic
99) Aive an example of an '!= Agent0Event relationship.
Answer! (ome deliveries are so large that several employees must wor3 together to unload and store the
items. '!= agent0event relationships occur whenever an activity is performed by more than one
employee* yet management wants to retain the ability to monitor each individual.s performance.
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AAC(B! Analytic
9:) ?hy is the event +ssue ebt often modeled as a separate event entity/
Answer! ,he event +ssue ebt is a special 3ind of cash receipt. +t is often modeled as a separate event
entity because it contains distinctly different attributes from those associated with cash receipts that arise
from the (ales event* such as the face amount of debt issued* total amount received* date issued*
maturity date* and interest rate.
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AAC(B! Analytic
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9;) ?hy might an #EA diagram show relationships between agents/
Answer! #elationships between internal agents may be created to model lines of responsibility.
#elationships between internal and external agents can also occur. 4or example* some organi>ations that
provide primarily services* such as ban3s and insurance companies* may assign customers to specific
employees who are responsible for effectively managing the overall 1uality of the ongoing association
with each customer. #elationships between external agents are rare but may sometimes be implemented
to satisfy the re1uirements for a well0structured database.
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AAC(B! Analytic
96) ?hy might an #EA diagram show relationships between resources and agents/
Answer! 4or example* the #EA model for the expenditure cycle includes a relationship between the
+nventory #esource entity and the (upplier Agent entity. ,his relationship reflects the common best
practice of identifying preferred and alternative suppliers for specific inventory items. (imilar
relationships between resources and employees can be used to model responsibility and accountability.
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AAC(B! Analytic
:8) ?hy is cost information stored in several relational tables/
Answer! Cost information is stored in several tables. (tandard cost is stored as an attribute of the
+nventory table because it is the same for all units of a given inventory item for a fiscal year. +n contrast*
the actual cost of inventory is stored in the +nventory0 %rder<Aoods table. ,his reflects the fact that
purchase prices can vary over time. By storing the cost of each order with the 1uantity purchased* the
system can calculate the actual cost of ending inventory and the cost of goods sold according to any
accepted inventory valuation method F&+4%* 4+4%* weighted0average* or specific identification). +f* on
the other hand* actual cost were stored as an attribute of the +nventory table* it would necessitate using
the weighted0average method because all units of a given inventory item would be assigned the same
cost. +n addition* cost data would be available only in this formatB it would be impossible to compute
alternative values for inventory because the detailed data about the cost associated with each purchase
would not be stored in the database.
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AAC(B! Analytic
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:1) ?hat are the benefits of an integrated enterprise0wide data model/
Answer! %ne of the benefits of an integrated enterprise0wide data model is that auditors can use it to
guide the development of 1ueries to validate the completeness and accuracy of transaction processing. +n
contrast* an integrated* enterprise0wide data model provides greater flexibility for analy>ing data.
Creating an integrated* enterprise0wide data model also facilitates the amalgamation of financial and
non0financial information in the same database. Effective integration of financial and non0financial data
also results in improved internal reporting. +t can also significantly improve the support provided for
managerial decision0ma3ing.
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AAC(B! Analytic
:)) escribe the relationships between #ecruiting event and (3ills* and between #ecruiting event and
Eob Applicants.
Answer! ,he #ecruiting event entity stores data about activities performed to notify the public of job
openings. ,he data recorded in this entity are useful for documenting compliance with employment laws
and also for evaluating the effectiveness of various methods used to announce job opportunities. ,he
'!= relationship between (3ills and #ecruiting reflects the fact that each advertisement may see3
several specific s3ills and that* over time* there may be several advertisements for a given s3ill. ,he
relationship between the #ecruiting event and Eob Applicants is modeled as being '!= because many
people typically apply for each job opening* but a given individual may also respond to more than one
recruiting event. Also* more than one employee may participate in each recruiting event* and* over time*
a given employee may participate in many such events.
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AAC(B! Analytic
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