Acc 340 Exam 1 – Ch. 15

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Oracle Corporation’s principal product is
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the Oracle Database, one of the most widely used databases in midsize to large computer installations
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Sage 50
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is targeted for small businesses. It has several versions ranging from Sage 50 Complete Accounting, an entry-level solution for a user who is moving from a manual or personal finance-based system to an automated system, to Sage 50 Quantum Accounting, the most comprehensive, top-of-the-line product that can support up to forty users. Sage 50 Accounting by Industry provides solutions that combine powerful accounting and analysis tools with functionality specific to the construction, distribution, and manufacturing industries.
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R/3 is now
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SAP ERP, which has the ability to support business operations of any size in 25 different industries
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Solutions that help a company \”up and down\” its particular business are considered
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Vertical market solutions
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AIS Installation
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the transfer of AIS programs to client computers
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AIS Implementation
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Implementation is far more comprehensive. It includes installation, but also encompasses conversion planning, resolution of operational and software incompatibilities, data transfer to the new system, training of client personnel, testing the new system, and monitoring operations for an initial period.
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Modular Conversion
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the installation of one AIS module at a time and loading of data only for that module. For example, an organization acquiring the GL, AR, AP modules of an AIS might decide to install GL in January, AR in February, and AP in March.
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The most significant advantage of a single supplier of all the hardware and the software is
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that one party has sole responsibility for the entire implementation. If multiple suppliers provide different components of an AIS, such as the hardware, operating system, database, accounting programs, and implementation, processing problems can be blamed on any component of the system. With so many possible problem causes, everyone may blame any problem that arises on some other party’s system contribution
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The mid-market and small business end of the AIS market is served by
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resellers who are commonly called VARs (value-added resellers). Almost all of the mid-market and small business AIS developers have established relationships with resellers who purchase, resell, implement, and support the software. Many accounting software VARs do not sell hardware, but do promise comprehensive support by relying on hardware suppliers that partner with them
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The direct sales model
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dominates the ERP market. SAP, PeopleSoft, and Oracle market their software to the ultimate purchaser. While some ERP installations are by the software developer, most implementations are by third-party consulting firms and other implementers such as Accenture, IBM, and HP. Often hardware will be purchased independently. The large hardware manufacturers are the most likely single-source suppliers, although it must be recognized that they are not the developer of the software.
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For modules to be installed independently, they cannot be designed to perform updates among modules in real-time posting mode. As a consequence,
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if an AIS contains SO, AR, PO, IC, and AP, and real-time updating of inventory is required, then all of these applications must be implemented simultaneously.
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Pilot Conversion
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are used when a company has a number of locations and the AIS, or a component of it, is to be installed at each location. A chain store operation, such as JCPenney, upon selecting a new AIS for its retail stores, would likely make at least one or two pilot conversions to test the system.
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Parallel Conversion
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you continue to operate the old AIS while simultaneously implementing the new AIS. Thus, the two systems are run in parallel until it is concluded that the new system is operating satisfactorily. Parallel conversion is highly desirable because it minimizes risks associated with the changeover.
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Problems Associated with Parallel Conversion
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1. you ordinarily want the same personnel to operate both the old and the new systems. Yet, they are employed full-time operating the old one 2. Usually the new AIS, and often the old, are used to conduct some essential business processes that require real-time operations. Order entry, for example, may be real-time and require a functioning system
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Direct Conversion (Big Bang)
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With direct conversion, the old system is stopped and existing data are ported to the new system. Then, the new system is started—accompanied by prayer. Direct conversion is most often used when (a) a large part of the system is real-time, and (b) the modules interact dynamically. Because failure of an AIS may mean bankruptcy for an organization, direct conversion is the most stressful method to use. While all of the conversion methods must be planned, both planning and testing in anticipation of a direct conversion must be excruciatingly detailed. Often a trial conversion is made as a test
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Sources for Horizontal Market Accounting Software
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• The Accounting Software Library (accountinglibrary.com): This software program and manual contain consultant/user procedures for conducting a selection and implementation engagement. • CTS Guides (ctsguides.com): The web site allows the user to download a free software selection kit.
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A commercial off-the-shelf AIS be acquired without also purchasing support and update agreements from either the VAR and/or the vendor
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Should only be required in rare circumstances
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See Page 486
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486
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Merchantability
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refers to the ability of a product to perform some function. Be sure the license states the AIS package will perform the functions you have specified, including its ability to support the number of simultaneous users that will be needed in the foreseeable future. If you are dealing with a VAR, you may have more ability to negotiate than if a direct sale is occurring.
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Denial of Merchantability
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Try to avoid. Many contracts have statements that read something like the following: To the maximum extent permitted by applicable law, developer company and its suppliers disclaim all other warranties, either express or implied, including, but not limited to, implied warranties of merchantability and fitness for a particular purpose, with regard to the software product, and any accompanying hardware. This limited warranty gives you specific legal rights. You may have others, which vary from state/jurisdiction to state/jurisdiction. The above clause, taken alone, means the software is not warranted to do anything
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Consequential Damages Clauses
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Try to avoid. This means that, unless you are specifically protected by state law, any losses you have arising from the use of the software, even if the developer knows that the product is defective, cannot be recovered from the developer
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Which of the following is not a popular mid-market accounting system software package? a. Microsoft Dynamics GP b. Sage 50 d. Sage 100 Standard ERP e. SAP ERP
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E
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The principal reasons a company adopts a new AIS is to achieve: a. better customer service. b. cost savings in the business operations of the company. c. positive impact on revenues. d. b and c. e. a, b, and c.
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E
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What is the name of the software vendor that was started by five engineers who had worked as a team at IBM? a. Oracle b. Microsoft Dynamics c. SAP AG d. The Sage Group
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C
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A new AIS should: a. conform to the present structure and business processes of the organization. b. result in a reduction in the cost of obtaining and processing data. c. cause the project team to reevaluate the present structure and business processes of the organization. d. result in a migration from the mainframe model to the client-server model.
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C
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The content of demonstrations should be planned by: a. the vendor. b. a subcommittee of the project team. c. the project team leader. d. the consultant. e. the consultant and the vendor.
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B
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A problem (or problems) that may be encountered in migrating data from the old to the new system include: a. the electronic media may be different. b. the binary coding systems may be different. c. some data may be on electronic media while other data are on paper. d. all of the above are problems that may be encountered.
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D
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Merchantability clauses: a. state the purposes for which the product can be legally used. b. deny any warranty that the product will perform the functions for which it was designed. c. deny any warranty if the product is transferred to another party. d. describe in detail the licensing agreement.
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B

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