Test Bank With Answers of Accounting Information System by Turner Chapter 13

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ACCOUNTING INFORMATION SYSTEMS

CONTROLS AND PROCESSES
TURNER / WEICKGENANNT
CHAPTER 13: Data and Databases
TEST BANK – CHAPTER 13 – TRUE / FALSE
1. Data are the set of facts collected from transactions.
2. Information is the set of facts collected from transactions.
3. Information is the interpretation of data that have been processed.
4. Data must be collected to complete a transaction such as a sale.
5. Data does not need to be stored in most cases.
6. The requirements to frequently or infrequently access data are not relevant to

the way that the data is stored due to computer access speed.
7. A character is a customer, client, or vendor.
8. A character is a single letter, number, or symbol.
9. A field is a set of characters that fill a space reserved for a particular kind of
data.
10. A record is the entire set of fields for a specific entity.
11. An entire set of files is a database.
12. An entire record forms a “database.”
13. Magnetic tape is a storage medium that allows only a sequential access type of
storage.
14. Sequential access means that data are stored in sequential or chronological
order.
15. Random access means that any data item on the storage media can be directly
accessed without reading in sequence.
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16. Random access means that you are searching for specific data but do not know
where it is within the database.
17. Batch processing occurs when similar transactions are grouped into a batch and
that batch is processed as a group.
18. Real-time processing occurs when transactions are processed as soon as they
are entered.
19. Batch processing occurs when transactions are processed as soon as they are
entered.
20. Real-time processing occurs when similar transactions are grouped into a batch
and that batch is processed as a group.
21. If real-time processing is to occur, database records must be stored on random

access media.
22. Data redundancy occurs when the same customer has more than one database
record.
23. Concurrency means that all of the multiple instances of the same data are
exactly alike.
24. A record pointer identifies a specific record in a flat database.
25. A relational database stores data in two-dimensional tables that are joined in
many ways to represent many different kinds of relationships in the data.
26. Within are relational database a record may have more than one primary key.
27. SQL stands for Sequential Query Language.
28. When using a SQL query language you are restricted to searching two tables for
common values such as Vendor Name.
29. Data normalization allows repeating groups such as the same vendor name in
multiple locations of the primary key field of the same table.
30. A data warehouse is a temperature controlled building where files and records
are retained.
31. Data warehouse files are non-volatile, and not frequently updated while
operational databases are updated with each transaction that affects them.
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32. HIPs, or high-impact processes, are the critically important processes that must
be executed correctly if the organization is to survive and thrive.
33. Tools commonly used in data mining are OLAP, ROLAP, and MOLAP.
34. Data mining is the process of searching an operational database for identifiable
patterns in the data.
35. To “drill down” is the process of successive expansion of data into more detail,
going from high-level data to successively lower levels of data.
36. Because of today’s computing power and Internet accessibility, there has been a
substantial increase in the use of centralized databases and centralized
processing.
37. In distributed data processing (DDP) and distributed databases (DDB), the
processing and the databases are dispersed to different locations of the
organization.
38. In centralized data processing the processing and the databases are stored and
maintained in a central location.
39. Because of the interaction of the database expansion of a distributed database is

difficult and costly.
40. Since distributed databases are under the control of many individual sites rather
than a single, centralized site, configuration, conformity, and security are less of
an issue.
41. With a client/server system all processing is done on the server.
42. IT general controls assist in preventing unauthorized access while providing

adequate backup is the responsibility of the user.
43. Ethical issues related to data utilization are not a consideration for data
collection.
44. Since database management and information is the responsibility and asset of
the database owner customers should not have the privilege to restrict
information contained within it.
45. The organization should institute procedures to insure that all customer data
collected retains accuracy, is complete, is current, is relevant, and is reliable”.
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ANSWERS TO TEST BANK - CHAPTER 13 - TRUE/FALSE:
1. T 10. T 19. F 28. F 37. T

2. F 11. T 20. F 29. F 38. T
3. T 12. F 21. T 30. F 39. F
4. T 13. T 22. F 31. T 40. F
5. F 14. T 23. T 32. T 41. F
6. F 15. T 24. F 33. T 42. F
7. F 16. F 25. T 34. F 43. F
8. T 17. T 26. F 35. T 44. F
9. F 18. T 27. F 36. F 45. T
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TEST BANK – CHAPTER 13 – MULTIPLE CHOICE
46. Data is
A. the interpretation of facts that have been processed.
B. the set of facts collected from transactions.
C. set of facts pertaining to accounts payable.
D. set of facts pertaining to accounts receivable.
47. Information is
A. the interpretation of facts that have been processed.
B. the set of facts collected from transactions.
C. set of facts pertaining to accounts payable.
D. set of facts pertaining to accounts receivable.
48. Data collected would be all but

A. name of the customer.
B. the selling company’s name.
C. the address of the customer.
D. the credit card number of the customer.
49. Examples of data collection events are

A. transactions that fill customer orders.
B. transactions to replenish inventory.
C. Neither A nor B are examples of data collection.
D. Both A and B are examples of data collection.
50. The reason that detailed data must be collected and stored is:
1. The data must be stored for future transactions or followup.
2. The data must be incorporated into the accounting system so that regular
financial statements can be prepared.
3. Management needs to examine and analyze data from transactions to
operate the organization.
A. Only 1.
B. Only 1 and 2.
C. Only 1, 2, and 3.
D. Include 1, 2, and 3 amoung other reasons.
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51. Detailed information from a sale may be used by:

1. the sales department.
2. the accounts receivable section.
3. the inventory department.
4. general ledger accountants.
5. customer service.
A. only 1, 3, and 5.
B. only by 1, 2, 3, and 5.
C. only by 1, 2, and 3.
D. only by 1, 2, 3, and 4.
52. The reasons for storing data to complete a customer sales transactions include
all but:
1. taking the order.
2. pulling the items from the warehouse.
3. shipping the items to the customer.
4. billing the customer.
5. collecting payment on the order.
5. providing feedback to the customer on the order.
6. crediting the customer account for payment.
A. 1.
B. 1 and 5.
C. 2 and 3.
D. 5.
53. The reasons to store customer names, addresses, and other similar information
include all but:
A. to follow up with the customer.
B. to create financial reports.
C. to expedite future orders.
D. to ease the customer’s follow-on ordering processes.
54. Storage media and methods of processing are:

A. sequential and random access storage with random and batch data
processing.
B. sequential and real time access storage with batch and real time data
processing.
C. batch and random access storage with random and batch data processing.
D. sequential and random access storage with batch and real time data
processing.
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55. Select the false statement from the following.

A. A character is a single letter only.
B. A field is a set of characters.
C. A field can be thought of as a column of data.
D. A record is the entire set of fields.
56. Select the true statement from the following.

A. A character is a single letter only.
B. A character is a single number only.
C. A character is a single symbol only.
D. A character is a single letter, number, or symbol.
57. A field is:

A. a row within a record.
B. a column within a record.
C. a series or collection of records.
D. a character is a single letter, number, or symbol.
58. A record is:

A. an entire set of fields for a specific entity.
B. a series of characters.
C. a collection of files.
D. another name for a database.
59. A field is
A. an entire set of records within a file.
B. a row within a record.
C. a set of characters.
D. a set of files within a database.
60. A file is:

A. a set of characters.
B. a column within a record.
C. a row within a record.
D. a collection of related records.
61. A database is:

A. a set of characters.
B. a row within a file.
C. a collection of related records.
D. an entire set of files.
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62. Magnetic tape storage medium allows:

A. sequential access storage with random data processing.
B. random access storage with random data processing.
C. batch access storage with random data processing.
D. sequential access storage with sequential data processing.
63. Random access means:

A. all data items in the group must be read but the groups do not need to read
in order.
B. any data item can be retreived without retreiving previous records.
C. all data items must be read in the order placed into the system, not
alphabetically.
D. all data items must be read in alphabetical order, not in the order they were
placed in the system.
64. Direct access:

A. means no passwords are required to access data items in a database.
B. is the same as sequential access.
C. is the same as random access.
D. is the process used by magnetic tape storage medium.
65. (Magnetic) Disk storage is:

A. the same as magnetic tape storage.
B. sequential access.
C. random access.
D. not direct access.
66. (Magnetic) Disk storage is:

A. preferred over magnetic tape storage.
B. sequential access.
C. not random access.
D. not direct access.
67. Batch processing:

A. occurs when dissimilar transactions are grouped and processed as a group.
B. occurs when similar transactions are grouped into a batch and processed as
a group.
C. occurs when the transaction is processed as soon as it is entered.
D. would not be used for payment to vendor type transactions since they are
time sensitive.
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68. Real-time processing:

A. would not be used for payment to vendor type transactions since they are
not time sensitive.
B. occurs when similar transactions are grouped into a batch and processed as
a group.
C. would be utilized for processes such as payroll due to their time-sensitive
nature.
D. occurs when the transaction is processed as soon as it is entered.
69. Select the true statement from those provided.

A. Batch processing fails to attain the efficiency of real-time processing.
B. Real-time processing fails to attain the efficiency of batch processing.
C. Real-time processing is efficient for large groups of similar data.
D. Real-time processing has less complex audit trails.
70. Select the false statement from those provided.

A. Batch processing attains a greater efficiency than real-time processing for
large amounts of data items.
B. Batch processing has a faster response time than real-time processing due
to the grouping of like data items.
C. Batch processing should be utilized for payroll type processes as it groups
these similar data items.
D. Real-time data processing has more complex audit trails for data items than
batch processing.
71. Select the false statement from those provided.

A. Real-time processing is more complex because of the interactive nature of
data processing.
B. Real-time processing can efficiently utilize sequential storage concepts.
C. The audit trail is as complex within both real-time and batch processing
systems.
D. Control totals are difficult within real-time processing due to the lack of data
item groupings.
72. Real-time data item processing is more complex because:

A. it must utilize sequential storage medium.
B. it must group data items together before processing.
C. the slower response times indicate more systems activity.
D. there is duplication of effort in processing transactions.
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73. Batch processing of data items is less complex because:

A. entries are recorded as soon as entered, eliminating queues of data.
B. audit trails are not required as required with real-time processing.
C. the individuals doing data entry need not learn their jobs to high skill levels.
D. the individual processes are not as complex as with real-time processing.
74. Select the correct statement from those provided below.

A. Batch processing has a slow response time and must use sequential data
storage.
B. Batch processing is very efficient for large volumes of transactions while
real-time processing has a slower processing time.
C. Batch processing is complex while real-time processing is simple.
D. Data may be stored either sequentially or randomly in batch and real-time
processing.
75. Select the false statement from those provided below.

A. Data must be stored sequential order for batch processing and in random
order for real-time processing.
B. Batch processing is very efficient for large volumes of transactions while
real-time processing has a rapid processing time.
C. Batch processing is simple while real-time processing is more complex.
D. Batch processing has a slow response time and may use random order data
access.
76. Select the correct statement from those provided below.

A. If batch processing is selected due to payroll and production type
processing mandates, the entire system must be batch processing.
B. If real-time processing is selected due to sales and inventory type
processing mandates, the entire system must be real-time processing.
C. If sales and inventory are real-time, payroll and production may be batch
processing in a well designed system.
D. Because sales are frequently shipped out of warehouses, sales, inventory,
and payroll are all good candidates for batch processing concepts.
77. Data redundancy occurs:

A. when shared databases are utilized.
B. when inventory has the same data in its files as sales has in its files.
C. when customer addresses are needed by both shipping and billing.
D. in all properly designed database management systems.
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78. Concurrency:
A. provides all departments with the same data at the same time.
B. may require the same field to be updated in multiple locations.
C. is a feature of a properly designed database to protect data.
D. occurs when inventory and sales can access the same data files.
79. Select the correct statement from the following.

A. Data redundancy and concurrency are features of well designed database
management systems.
B. Data redundancy, not concurrency, are features of well designed database
management systems.
C. Concurrency not, data redundancy, are features of well designed database
management systems.
D. Data redundancy and concurrency are not features of well designed
database management systems.
80. Database management systems, DBMS, are:

A. software applications that control and protect the data.
B. are printed policies about the use and access to data.
C. systems which require each user to create his own master data file.
D. systems that allow unlimited access to the data files by all users.
81. Data reveal relationships between records. These can be thought of as:
A. one-to-one relationships.
B. one-to-one relationships only.
C. one-to-many relationships.
D. Both A and C are correct.
82. Database relationships may be:

1. one-to-one relationships.
2. one-to-one relationships only.
3. one-to-many relationships.
4. one-to-many relationships only.
5. many-to-one relationships.
6. many-to-one relationships only.
7. many-to-many relationships.
8. many-to-many relationships only.
A. 1, 3, 5, and 7 only.
B. 2 or 4 or 6 or 8 only, each is exclusive of the others.
C. 1 and 3 only.
D. 1 or 3 or 5 or 7 only, each is exclusive of the others.
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83. An example of a one-to-one relationship would be:

A. one employee, three timecards for the pay period.
B. one customer, one billing address.
C. one customer, four shipping addresses.
D. two employees, one skill set.
84. An example of a one-to-many relationship would be:

A. one employee, three timecards for the pay period.
B. one customer, one billing address.
C. one customer, one shipping invoice..
D. two employees, one skill set.
85. An example of many-to-many relationship would be:

A. one customer for one billing date.
B. multiple customers for one inventory item.
C. multiple vendors for multiple items.
D. one employee, three timecards for the pay period.
86. A flat file database:

A. has the ability to call necessary information from linked databases.
B. has two dimensions, rows and depth.
C. has only columns.
D. has two dimensions, rows and columns.
87. Processing of a flat file table is:

A. random.
B. sequential.
C. random or sequential, selectable by the user.
D. direct.
88. Flat file records are:

A. kept in random order.
B. kept is sequential order.
C. linked to other records by a common attribute.
D. interactive and real-time processed.
89. Tables in a flat file database must:

A. must contain at least two data items at the intersection of each row and
column.
B. contain similar data throughout the row.
C. label all columns the same to maintain the relationships of the rows.
D. contain similar data in the column.
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90. Hierarchical databases are not:

A. inverted tree structures.
B. one-to-one relationships.
C. one-to-many relationships.
D. many-to-one relationships.
91. A record pointer is:

A. a column value that relates to all other values in the row.
B. a column value that points to the next address with the linked attribute.
C. is a row value that points to the next address with the linked attribute.
D. a link that is only required in one-to-many relationships.
92. Hierarchal databases:

A. are effective in retrieving records without explicit linkages.
B. are efficient in processing large volumes of transactions with explicit
linkages.
C. do not require built-in linkages, they can be created with queries.
D. do not require record pointers.
93. Network databases:

A. allow shared branches within the inverted tree structure.
B. allow creation of records without complete information.
C. are popular today because of LAN and WAN usage.
D. are very flexible because of the network access.
94. Relational databases are:

A. two-dimensional tables which can be joined in only one way.
B. three-dimensional tables allowing increased data relationships.
C. two-dimensional tables which can be joined in many ways.
D. either two- or three-dimensional as defined by the user.
95. Relational databases are:

A. many large tables linked together to associate data.
B. many large tables to isolate data within common identifiers.
C. many small tables linked by primary keys to associate data.
D. single tables with multi-dimensional characteristics – rows, columns, and
depth.
96. The primary key of a relational database:

A. must be a common identifier for all of the data within the table.
B. must never be the first field of the table.
C. represents a value that is used to sort, index, and access records with.
D. is the password which allows unlimited access to the database.
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97. Structured query language (SQL):

A. isolates data within tables.
B. takes advantage of the primary record key to link tables.
C. is a complex language used to extract data from a limited number of tables.
D. does not allow conditions to be put on the query.
98. With structured query language (SQL):

A. one-to-one relationships can be determined.
B. one-to-many relationships can be determined.
C. many-to-one relationships can be determined.
D. All of the possibilities, A, B, and C, are correct.
99. A “Where” condition within a structured query of a relational database:

A. must be limited to a location such as “Warehouse #1.”
B. may establish a requirement where the results are equal to a specific value.
C. may establish a requirement where the results are not equal to a specific
value.
D. Both B and C are correct.
100. The additive characteristic means:

A. the linked tables are synergetic within themselves – linked they are more
powerful than alone.
B. the values in the preceding fields must total into a following field.
C. that if the preceding rules are met, the rule can be met.
D. that if the preceding rules are not met, the rule must be met.
101. Data normalization:

A. requires repeated groups to be deleted from the same row.
B. requires repeated groups to be deleted from the same column.
C. allows repeated groups if contained within the column.
D. allows repeated rows of information within two or more tables.
102. Select the correct statement from those provided.

A. The hierarchal and relational database models are both extremely flexible in
their queries.
B. The hierarchal model is better suited to queries than the relational database
model.
C. The relational database model is more flexible in its queries than the
hierarchal mode.
D. The relational database model has better processing of large volumes of
transactions.
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103. In today’s IT environment:

A. processing speed is compromised for query capability with relational
databases.
B. query capability is compromised for processing speed with relational
databases.
C. neither querying or processing speed need be compromised with relational
databases.
D. both querying and processing speed are compromised with relational
databases.
104. The loss of transaction processing efficiency:

A. is substantial but a necessary trade-off with relational databases.
B. is minimized because of the increased computing power available.
C. is a primary reason why relational databases are not utilized.
D. Both B and C are correct.
105. Select the true statement from those provided below.

A. Managers use much the same data as operational departments to manage
the organization.
B. All users, managers, sales, production, utilize the features of a data
warehouse equally.
C. Data warehouses are isolated to protect operational information from
unauthorized access.
D. Managers require access to historical data this is generally not available to
other individuals.
106. Select the true statement from those provided below.

A. The data warehouse has five to ten years of data while the operational
database has current year data.
B. The data warehouse has current year data while the operational database
has five to ten years of data.
C. The data warehouse archives both current and long-term, five to ten years
of data, within its storage.
D. The data warehouse contains only general ledger type information while the
operational database has detail.
107. Data within the data warehouse:

A. is volatile – its release is restricted and potentially hazardous to the
organization.
B. is volatile – it may be deleted by specific users.
C. is nonvolatile – it does not change rapidly.
D. is nonvolatile – is protected against deletion.
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108. The data warehouse:

A. contains five to ten years of historical data in detail for planning and
analysis.
B. contains the current fiscal year in detail for planning, analysis, and
reporting.
C. contains the historical information needed for planning and analysis.
D. is not utilized for planning and analysis, this information is extracted from
the operational database.
109. High-impact processes (HIPs):

A. are critical to the short-term objectives of the organization.
B. are only associated with events such as sales and collections.
C. are identified and established by single-functional teams.
D. are critical to the long-term objectives of the organization.
110. High-impact processes (HIPs):

A. determine the structure of the data in the data warehouse.
B. address the short-term goals of the organization.
C. must compromise user requirements for organizational needs.
D. determine the structure of the data in the operational database.
111. Select the true statement from the following.

A. High-impact processes (HIPs) are identified by single-functional teams.
B. High-impact processes (HIPs) and user’s needs determine the data in the
data warehouse.
C. High-impact processes (HIPs) address both short-term and long-term
objectives.
D. High-impact processes (HIPs) determine the long-term strategy of the
organization.
112. Standardizing data:

A. configures all of the data from one department into a single database for
analysis.
B. configures all of the data from numerous departments into a single data
configuration.
C. is not required within relational databases.
D. requires sales to keep its own files and references apart from marketing
(example).
113. Cleansed or scrubbed data:

A. has had all viruses removed.
B. has had all fields standardized.
C. has had errors and problems fixed.
D. is data that has been stored in the data warehouse.
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114. Uploading data is:

A. putting scrubbed files into the operational database.
B. putting files from each HIP system into the operational database.
C. putting standardized files onto local desktop systems for access.
D. putting files from each HIP system into the data warehouse.
115. The purpose of the data warehouse does not include:

A. giving managers rich sources of current trends and data.
B. storing current fiscal data and activity records.
C. providing sales with current customer information.
D. giving managers rich sources of historical trends and data.
116. Data is the data warehouse:

A. is analyzed by data mining.
B. is analzyed by SQL.
C. is analyzed by analytical processing.
D. Both A and C are correct.
117. Proper data analysis of data warehouse files:

1. improves short-term planning.
2. improves long-term planning.
3. enhances the ability to meet customer needs.
4. increase performance.
A. 1, 2, 3, and 4.
B. 2, 3, and 4.
C. 1, 3, and 4.
D. 1, 2, and 4.
118. The various types of online analytical processing (OLAP) does not include:
A. MOLAP – Multidimensional online analytical processing.
B. NOLAP – Notational online analytical processing.
C. ROLAP – Relational online analytical processing.
D. All of the above, A, B, and C are types of OLAP systems.
119. Data mining:

A. searches for random patterns.
B. searches for patterns in the operational database.
C. results will not generally predict customer preferences.
D. analysizes past patterns to predict future events.
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120. OLAP tools include all of the following except:

A. drill down.
B. drill up.
C. pivoting.
D. time series analysis.
121. OLAP tools include all of the following except:

A. consolidation.
B. inclusion reports.
C. exception reports.
D. what if simulations.
122. Drill down within OLAP is:

A. identifying trends in the comparison of data in several databases.
B. the aggregation or collection of similar data from several databases.
C. the presentation of variances from the expected in dollar value.
D. is the successive expansion of data as lower levels of data are exposed.
123. Potential variations in conditions that are used to understand interactions

between different parts of the business is referred to as:
A. exception reports.
B. pivoting.
C. what-if simulations.
D. time series analysis.
124. Data processing and storage:

A. must be kept centralized for control and security.
B. must be distributed for control and security.
C. can be distributed to meet organizational requirements.
D. must be kept centralized for efficient operations.
125. Select the correct statement from the following.

A. DDP and DDB require dependable and extensive processing power for large
organizations.
B. Distributed databases can only be accessed by local queries.
C. Centralized data processing and databases require dependable and
extensive processing power for large organizations.
D. The trend in data processing and databases is towards centralization due to
reliable internet access and increased computer power.
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126. Advantages of distributed databases include all except:

A. reduced hardware costs.
B. Improved responsiveness.
C. eased managerial obligations.
D. easier incremental growth.
127. Disadvantages of distributed databases include all except:

A. increased difficulty in managing the database.
B. maintaining integrity of the data.
C. easier security controls.
D. easier control of the database configuration.
128. Advantages of distributed databases include all except:

A. easier incremental growth.
B. multiple site access for processing.
C. decreased user involvement.
D. increased user control.
129. Automatic integrated backup means:

A. that each site must accomplish its own backup.
B. one site may backup sites it does not normally support.
C. if data is lost at one site it may be available from another site.
D. All of the above are correct.
130. Automatic integrated backup

A. may create problems because a single site’s data may at multiple locations.
B. may create problems because backups at multiple sites may have hardware
differences.
C. at remote sites may not all be the same configuration as the central
configuration.
131. Distributed data processing and databases:

A. may require management to enforce hardware and software configuration
policies.
B. make hardware and software configuration easier as local assests can be
utilized.
C. ease security concerns as remote systems are not required to maintain
connetivity.
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132. Client systems usually rely on the network for all except:
A. file sharing.
B. printing.
C. video presentation.
D. network/Internet access.
133. Select the true statement from the following:

A. Clients are usually workstations that contain data files.
B. Servers are usually less capable computing power since their function is
routing requirements to resources.
C. Servers may contain shared files and resources.
D. Servers usually do not control assets such as printers and Internet portals.
134. The three major concerns related to database control and security do not
include:
A. unauthorized access.
B. inadequate backup.
C. data integrity.
D. adequate backup.
135. Database security includes all accept:

A. password protection.
B. security tokens.
C. LAN structure.
D. firewalls.
136. Unauthorized users might include all of the following except:

A. hackers attempting to pentrate firewalls.
B. sales personnel accessing inventory files.
C. human resource managers accessing production reports.
D. payroll clerks accessing pay rate databases.
137. Ethical issues associated with data collection and storage include all of the
following except:
A. collecting only the necessary information for the transaction.
B. selling non-sensitive information only to trusted agents.
C. correcting errors in data as quickly as possible.
D. precluding unnecessary access of customer data by employees.
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138. It is the ethical responsibility of employees:

A. to review customer records not associated with their division for errors.
B. distribute necessary information to those without password access.
C. identify to management gaps or holes in data protection procedures.
D. to backup corporate files on their desktop systems for security.
139. A bank would consider which of the following as nonprivate information?

A. Customer name.
B. Customer address if the customer is a business.
C. Customer phone number if it is listed number.
D. All of the above, A, B, and C, are private and privileged types of
information.
140. Appropriate information for a medical facility would not include:

A. Social Security number.
B. health insurance company.
C. next of kin notification information.
D. personal spending habits.
141. The AICPA Trust Services Principles include:

A. management, notice, choice & consent, collection, use & retention,
detention, and disclosure to third parties.
B. management, choice & consent, collection, use & retention, backup, access,
disclosure to third parties, and security for privacy.
C. choice & consent, collection, use & retention, access, disclosure to third
parties, redundancy for privacy, and quality.
D. management, choice & consent, use & retention, access, disclosure to third
parties, and monitoring & enforcement.
142. The prevention of industrial espionage is aided by all except:

A. password protection and access of files and data.
B. smart cards.
C. Federal and state laws.
D. encryption of data.
215
143. While an employee may have access to privileged information, an example of

unethical activities would be:
A. a nurse viewing the medications of the next patient.
B. a car salesman viewing the credit rating of a customer with a car in for
warranty repairs.
C. a manager reviewing the hours worked of an assigned employee.
D. a warehouseman viewing the availability of materials needed for production.
144. Proper IT controls will not:

A. prevent a hacker from penetrating the firewall.
B. prevent an unauthorized user from using the computer systems.
C. restrict employee access to any information.
D. prevent an employee from sharing his password.
145. Ethical responsibilities are:

A. shared by company employees only.
B. shared by company employees and management only.
C. shared by company employees,IT, and management only.
D. shared by all concerned including employees, customers, and management.
216
46. B 66. A 86. D 106. A 126. C

47. B 67. B 87. B 107. C 127. C
48. B 68. D 88. B 108. C 128. C
49. D 69. B 89. D 109. D 129. D
50. D 70. B 90. D 110. A 130. D
51. B 71. B 91. B 111. B 131. A
52. D 72. D 92. B 112. B 132. C
53. B 73. D 93. A 113. C 133. C
54. D 74. D 94. C 114. D 134. B
55. A 75. A 95. C 115. A 135. C
56. D 76. C 96. C 116. D 136. C
57. B 77. B 97. B 117. B 137. B
58. A 78. B 98. D 118. B 138. C
59. C 79. D 99. D 119. D 139. D
60. C 80. A 100. C 120. B 140. D
61. D 81. D 101. B 121. B 141. D
62. D 82. A 102. C 122. D 142. C
63. B 83. B 103. A 123. C 143. B
64. C 84. A 104. B 124. C 144. D
65. C 85. C 105. D 125. C 145. D
217
TEXTBOOK – CHAPTER 13 – END OF CHAPTER QUESTIONS
146. Which of the following best describes the relationship between data and
information?
A. Data is interpreted information.
B. Information is interpreted data.
C. Data is more useful than information in decision making.
D. Data and information are not related.
147. A character is to a field as

A. water is to a pool.
B. a pool is to a swimmer.
C. a pool is to water.
D. a glass is to water.
148. Magnetic tape is a form of

A. direct access media.
B. random access media.
C. sequential access media.
D. alphabetical access media.
149. Which of the following is not an advantage of using real-time data processing?
A. Quick response time to support timely record keeping and customer
satisfaction
B. Efficiency for use with large volumes of data
C. Provides for random access of data
D. Improved accuracy due to the immediate recording of transactions
150. If a company stores data in separate files in its different departmental locations
and is able to update all files simultaneously, it would not have problems with
A. attributes.
B. data redundancy.
C. industrial espionage.
D. concurrency.
151. When the data contained in a database are stored in large, two-dimensional
tables, the database is referred to as a
A. flat file database.
B. hierarchical database.
C. network database.
D. relational database.
218
152. Database management systems are categorized by the data structures they
support. In which type of database management system is the data arranged in
a series of tables?
A. Network
B. Hierarchical
C. Relational
D. Sequential
153. A company’s database contains three types of records: vendors, parts, and
purchasing. The vendor records include the vendor number, name, address, and
terms. The parts records include part numbers, name, description, and
warehouse location. Purchasing records include purchase numbers, vendor
numbers (which reference the vendor record), part numbers (which reference
the parts record), and quantity .What structure of database is being used?
A. Network
B. Hierarchical
C. Relational
D. Sequential
154. Which of the following statements is not true with regard to a relational
database?
A. It is flexible and useful for unplanned, ad hoc queries.
B. It stores data in tables.
C. It stores data in a tree formation.
D. It is maintained on direct access devices.
155. A collection of several years’ nonvolatile data used to support strategic decision-
making is a(n)
A. operational database.
B. data warehouse.
C. data mine.
D. what-if simulation.
156. Data mining would be useful in all of the following situations except
A. identifying hidden patterns in customers’ buying habits.
B. assessing customer reactions to new products.
C. determining customers’ behavior patterns.
D. accessing customers’ payment histories.
219
157. A set of small databases where data are collected, processed, and stored on
multiple computers within a network is a
A. centralized database.
B. distributed database.
C. flat file database.
D. high-impact process.
158. Each of the following is an online privacy practice recommended by the AICPA
Trust Services Principles Privacy Framework except:
A. Redundant data should be eliminated from the database.
B. Notification of privacy policies should be given to customers.
C. Private information should not be given to third parties without the
customer’s consent.
D. All of the above.
ANSWERS TO TEXTBOOK – CHAPTER 13 – END OF CHAPTER QUESTIONS
146. B 149. B 152. C 155. B 158. A

147. A 150. D 153. C 156. C
148. C 151. A 154. C 157. B
220
TEXTBOOK – CHAPTER 13 – SHORT ANSWER QUESTIONS
159. How does data differ from information?

Answer: Data is the basic facts collected from a transaction. Information is data that
has been manipulated by summarizing, categorizing, or analyzing to make that data
useful to a decision maker.
160. Why is it important for companies to store transaction data?

Answer: There are four reasons that a company must collect and store transaction
data. Those reasons are: 1) to complete transactions; 2) for follow-up on later
transactions or for reference regarding future transactions with the same entity; 3)
to prepare external reports such as financial statements; and 4) to provide
information to management as they attempt to run the organization efficiently and
effectively.
161. Which type of data storage medium is most appropriate when a single record of
data must be accessed frequently and quickly?
Answer: Random access storage works best for situations in which a single record
must be accessed quickly and easily.
162. Identify one type of business that would likely use real-time data processing rather
than batch processing. Describe the advantages of real-time processing to this
type of business.
Answer: A business that sells items on a web site, such as Amazon, would be likely
to use real-time data processing. This is true because the system must be able to
determine information such as whether an item ordered is currently in stock. The
main advantage of real-time processing is its ability to provide information
immediately. There are many examples of the need for real-time data processing.
Airline reservation systems are another example.
163. Differentiate between data redundancy and concurrency.

Answer: Data redundancy occurs when the same data are stored in more than one
file. Thus, there is redundant, or repeated data. Concurrency means that all of the
multiple instances of the same data are exactly the same. It is harder to achieve
concurrency when there is much data redundancy.
164. What is the term for the software program(s) that monitors and organizes the
database and controls access and use of data? Describe how this software controls
shared access.
Answer: This software system is called a Database Management System, or DBMS.
The DBMS manages the access of users or processes to the online database. The
DBMS manages the data sharing by updating the data available to users
immediately upon recording any changes.
221
165. Describe the trade-offs of using the hierarchical model of database storage.
Answer: A hierarchical model database is very efficient for processing large volumes
of similar transactions. It is not efficient for accessing or processing a single record
from a large database. Therefore, it works well with batch processing, but would not
be efficient in those situations where accessing a single record, or answering flexible
queries, is necessary.
166. Describe the organization of a flat file database.

Answer: Flat file records are two dimensional tables with rows and columns. The
records are stored in text format in sequential order, and all processing must occur
sequentially. No relationships are defined between records. These systems must use
batch processing only and batches must be processed in sequence. The system
makes the processing of large volumes of similar transactions very efficient.
167. What four conditions are required for all types of databases?
Answer: 1) Items in a column must all be the same data type. 2) Each column must
be uniquely named. 3) Each row must be unique in at least one column. 4) Each
intersection of a row and column must contain only one data item.
168. Within a hierarchical database, what is the name for the built-in linkages in data
tables? Which data relationships can be contained in a hierarchical database?
Answer: Record pointers are used to link a record to the next record having the
same attribute. Using a record pointer system, one-to-one and one-to-many
relationships can be represented in a hierarchical database.
169. Which database models are built on the inverted tree structure? What are the
disadvantages of using the inverted tree structure for a database?
Answer: Both the hierarchical database model and the network database model are
based on an inverted tree structure. The network model is more complex because it
uses more than one inverted tree structure. This allows two or more paths into the
data. Two disadvantages are that new data cannot be added until all related
information is known, and deleting a parent record can delete all child records.
170. Which database model is used most frequently in the modern business world? Why
do you believe it is frequently used?
Answer: The relational database model is now used most frequently. It is frequently
used because it is the most flexible database model. An English-like query language,
SQL, can be used to retrieve data from the database in a very flexible manner. In
addition, the increasing computer power and decreasing cost of computing power
have made any inefficiencies in a relational database less significant.
222
171. How is the primary key used in a relational database?

Answer: The primary key is the unique identifier for each record in the table and it is
used to sort, index, and access records from that table.
172. What language is used to access data from a relational database? Why is the
language advantageous when accessing data?
Answer: Structured Query Language, SQL, is the language used to access data in a
relational database. Its advantage is its English-like query language that allows easy
access to the data in the database and presentation in a manner most useful to the
user.
173. Which type of database model has the most flexibility for querying? How does this
flexibility assist management?
Answer: The relational database model is the most flexible database model for
querying. It provides important assistance to managers through its flexibility in
answering an unlimited number of queries about customers, products, vendors, or
any other information in the database.
174. What are the first three rules of normalization? What is meant by the statement
that the rules of normalization are additive?
Answer: 1) Eliminate repeating groups. 2) Eliminate redundant data. 3) Eliminate
columns not dependent on the primary key. Additive means that if a table meets the
third rule, it has also met the preceding rules: one and two.
175. Differentiate between a data warehouse and an operational database.

Answer: An operational database is the database in which data is continually
updated as transactions are processed. The operational database includes data for
the current fiscal year and it supports day-to-day operations and record keeping for
the transaction processing systems. The data warehouse is an integrated collection
of enterprise-wide data that includes five to 10 years of non-volatile data, and it is
used to support management in decision making and planning. Periodically, new
data is uploaded to the data warehouse from the operational data, but other than
this updating process, the data in the data warehouse does not change.
176. How is data mining different than data warehousing?

Answer: Data mining is the use of data analysis tools to analyze data in a data
warehouse. Tools such as OLAP are used in data mining. An example of data mining
is analyzing sales data to determine customer buying patterns. The data warehouse
is the database in which the data to be analyzed is stored.
223
177. How has Anheuser-Busch used data warehousing and data mining successfully?
Answer: Anheuser-Busch has used a data warehouse and data mining to analyze
sales history, price-to-consumer, holidays and special events, daily temperature, and
forecasted data such as anticipated temperature to create forecasts of sales by store
and by product. Data are used by salespeople and distributors to rearrange displays,
rotate stock, and inform stores of promotion campaigns. Using these buying trends,
Anheuser-Busch creates promotional campaigns, new products, and local or ethnic
target marketing.
178. Identify and describe the analytical tools in OLAP.

Answer: The analytical tools that are usually part of OLAP are: drill-down,
consolidation, pivoting, time-series analysis, exception reports, and what-if
simulations. Drill down is the successive expansion of data into more detail, going
from high-level data to successively lower levels of data. Consolidation is the
aggregation or collection of similar data; it is the opposite of drill down in that
consolidation takes detailed data and summarizes it into larger groups. Pivoting is
examining data from different perspectives. Time series analysis is the comparison
of figures over several successive time periods to uncover trends. Exception reports
present variances from expectations. What-if simulations use changing variables to
examine interactions between different parts of the business.
179. Differentiate between centralized data processing and distributed data processing.
Answer: In centralized data processing, data processing and databases are stored
and maintained in a central location. In distributed data processing, the processing
and the databases are dispersed to different geographic locations of the
organization. A distributed database is actually a collection of smaller databases
dispersed across several computers on a computer network.
180. What are the “clients” and “servers” in a client/server distributed database system?
Answer: Servers are computers or processes that manage files and databases,
printers, or networks. Clients are usually PCs or workstations that run the
applications. Clients rely on servers for resources such as files, printers, and even
processing power.
224
181. Why is control over unauthorized access so important in a database environment?

Answer: Data are valuable resources that must be protected with good internal
controls such as those that prevent unauthorized access. Access controls help
prevent unauthorized users from accessing, altering, or destroying data in the
database. The database is such a critical resource for most organizations that they
must insure the data is accurate and complete.
182. What are some internal control measures that could prevent a hacker from altering
data in your company’s database?
Answer: Measures that prevent hackers from accessing and altering data include
authentication and hacking controls such as login procedures, passwords, security
tokens, biometric controls, firewalls, encryption, intrusion detection, and
vulnerability assessment. In addition to these controls, the database management
system (DBMS) must be set up so that each authorized user has a limited view
(schema) of the database.
183. Why are data considered a valuable resource that is worthy of extensive
protection?
Answer: The database of an organization is a critically important component of the
organization. Data are a valuable resource that must be protected with good internal
controls. Missing or incorrect data can have a negative impact on the ability to
conduct the necessary business processes.
225
TEXTBOOK – CHAPTER 13 – SHORT ESSAY
184. Arrange the following data storage concepts in order from smallest to largest, in
terms of their size: file, record, database, character, and field.
Answer: The hierarchy of terms is character, field, record, file, and database.
185. Think of a telephone book as a database. Identify the fields likely to be used in
this database. If you were constructing this database, how many spaces would you
allow for each field?
Answer: The fields and suggested sizes that usually be needed are: last name (24),
first name (24), middle initial or name (24), address line 1 (50), address line 2 (50),
apartment number (12), city (24), state (2), zip code (9), phone number (10). For
businesses, a field for business name (40) would be used rather than last name and
first name. The number of spaces for each field can vary. Of course, fields such as
zip code and phone number are more certain. It is important that the field size must
be slightly larger than the longest item to appear in that field. In the case of items
for which we know the size precisely, the field size can be set accordingly. For
example, zip codes will never include more than 9 digits.
186. Suppose that a large company uses batch processing for recording its inventory
purchases. Other than its slow response time, what would be the most significant
problem with using a batch processing system for recording inventory purchases?
Answer: A company would not know its true inventory balance until the batch of
transactions was processed. There would be no online, current balance of inventory
to be used to respond to inquiries from managers, employees, or customers.
Therefore, purchases and sales of inventory might need to be delayed until the
batch processing occurs and new balances are known. This delay can cause the
company to maintain higher or lower levels of inventory than may be desired. With a
longer time to place an order, the company might need to maintain higher inventory
levels to avoid a stock out.
187. Arrange the following database models in order from earliest development to most
recent: network databases, hierarchical databases, flat file databases, and
relational databases.
Answer: The historical order is flat file, hierarchical, network, and relational
databases.
226
188. Categorize each of the following as one-to-one, one-to-many, or many-to-many

relationships.
• Subsidiary ledgers and general ledgers.
Answer: This is best categorized as a one- to-many relationship. A general ledger
account, such as accounts receivable, could have many supporting sub-accounts in
the accounts receivable subsidiary ledger. It is also true that a general ledger would
have many subsidiary ledgers (accounts receivable, accounts payable, inventory,
payroll).
• Transactions and special journals.
Answer: This is best categorized as a one- to-many relationship. A special journal,
such as sales journal, would have many supporting transactions recorded in the
special journal.
• General ledgers to trial balances.
Answer: This is best categorized as a one-to-one relationship. For each time period,
one set of general ledger balances would result in one trial balance.
189. How might a company use both an operational database and a data warehouse in
the preparation of its annual report?
Answer: A company would use the operational database for the current fiscal year
reports, but may need past information from the data warehouse to prepare
comparative financial statements from previous years. The company might also use
the data warehouse to examine and report important trends in financial information.
190. Using Anheuser-Busch’s BudNet example presented in this chapter, think about the
list queries that might be valuable if a company like Gap Inc. used data mining to
monitor its customers’ buying behavior.
Answer: The Gap could use queries related to: the effects of promotional pricing;
dates or holiday buying patterns; dates when seasonal style updates should be
introduced in stores; regional clothing preferences; ethic group clothing patterns;
and GAP sales in relation to competitors.
227
TEXTBOOK – CHAPTER 13 – PROBLEMS
191. Differentiate between batch processing and real-time processing. What are the
advantages and disadvantages of each form of data processing? Which form is
more likely to be used by a doctor’s office in preparing the monthly patient bills?
Answer: Batch processing occurs when similar transactions are grouped into a batch
and that batch is processed as a group. The alternative to batch processing is real
time processing. Real-time processing occurs when transactions are processed as
soon as they are entered. Real-time processing is interactive because the
transaction is processed immediately.
The advantages of batch processing are that it is an efficient way to process a large
volume of like transactions, it is less complex than real-time systems, it is easier to
control and maintain an audit trail; and the data can be stored in less complex,
sequential storage. The major disadvantage of batch processing is the slow
response time. Balances are not updated in real-time and therefore, management
does not have current information at all times.
The major advantage of real-time processing is the rapid response time. Since
balances are updated in real-time, management always has current information. The
disadvantages of real-time processing are that it is less efficient for processing large
volumes of like transactions; it is more complex than batch systems; it is more
difficult to control and maintain an audit trail; and data must be stored in random
access databases.
Monthly processing of patient bills could be batch processing. There would be a high
volume of like transactions at month-end.
228
192. Allibyr Company does not use a database system; rather, it maintains separate
data files in each of its departments. Accordingly, when a sale occurs, the
transaction is initially recorded in the sales department. Next, documentation is
forwarded from the sales department to the accounting department so that the
transaction can be recorded there. Finally, the customer service group is notified
so that its records can be updated. Describe the data redundancy and concurrency
issues that are likely to arise under this scenario at Allibyr.
Answer: There would be much data redundancy in this system. For example,
customer name, address, and other contact information must be maintained in
separate files in both the sales department and the customer service department.
Customer service and the sales department would have nearly identical fields in
their data, but maintained in separate files.
It may take hours our days for the sale documentation to move from one
department to the next. Therefore not all departments have the same information
stored in their files at the same time. After a sale is recorded in the sales
department, it may be days before that sale is recognized in the customer service
department. Therefore on any given day, managers in the two departments will be
operating with feedback from data sets that do not match. If someone in the sales
department needs to check with customer service regarding a particular sale, it is
possible that the customer service department has not yet received information for
that sale. This lengthens response time in answering queries or following up on
orders.
193. List and describe the steps involved in building a data warehouse.
Answer: The steps are: identify the important data to be stored in the data
warehouse; standardize that data across the enterprise; scrub or cleanse the data;
and upload that data to the data warehouse.
Identifying the proper data requires examining user needs and high-impact
processes (HIPs). HIPs are the processes that are critically important and that must
be executed correctly if the organization is to survive and thrive. Data needed by
users and data from HIPs should be in the data warehouse. The data must then be
standardized across the enterprise. Various subunits within the enterprise might
have conflicting definitions or field names for the same type of data. The designers
of the data warehouse must design a standard format for the data. The data must
also be scrubbed or cleansed to remove errors and inconsistencies in the data. The
data must then be uploaded to the data warehouse. Also there should be a periodic
upload of data from the operational databases into the data warehouse.
229
194. Describe the advantages and disadvantages of using a distributed database and
distributed data processing. Do you think the advantages are worthwhile? Explain
your answer.
Answer: The advantages are: 1) Reduced hardware cost. Distributed systems use
networks of smaller computers rather than a single mainframe computer. This
configuration is much less costly to purchase and maintain. 2) Improved
Responsiveness. Access is faster since data can be located at the site of the greatest
demand for that data. Processing speed is improved since the processing workload
is spread over several computers. 3) Easier incremental growth. As the organization
grows or requires additional computing resources, new sites can be added quickly
and easily. Adding smaller, networked computers is easier and less costly than
adding a new mainframe computer. 4) Increased user control and user involvement.
If data and processing are distributed locally, the local users have more control over
the data. This control also allows users to be more involved in the maintenance of
the data and users are therefore more satisfied. 5) Automatic integrated backup.
When data and processing are distributed across several computers, the failure of
any single site is not as harmful. Other computers within the network can take on
extra processing or data storage to make up for the loss of any single site.
The disadvantages are: 1) Increased difficulty of managing, controlling, and

maintaining integrity of the data. 2) Increased likelihood of concurrency problems.
Yes, I think it is worthwhile to have distributed, local control of the data and
automated, integrated backup of a distributed system. However, greater attention
must be paid to controls that ensure the security and concurrency of the data in a
distributed system.
195. Describe the ethical obligations of companies to their online customers.

Answer: A company must put processes and safeguards into place to protect the
privacy and confidentiality of customer data. The nine privacy practices described by
the AICPA Trust Services Principles are a good source of the guidelines a company
should follow.
230

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ACCOUNTING INFORMATION SYSTEMS

CHAPTER 13: Data and Databases

TEST BANK – CHAPTER 13 – TRUE / FALSE

1. Data are the set of facts collected from transactions.

2. Information is the set of facts collected from transactions.

3. Information is the interpretation of data that have been processed.

4. Data must be collected to complete a transaction such as a sale.

5. Data does not need to be stored in most cases.

6. The requirements to frequently or infrequently access data are not relevant to

7. A character is a customer, client, or vendor.

8. A character is a single letter, number, or symbol.

10. A record is the entire set of fields for a specific entity.

11. An entire set of files is a database.

12. An entire record forms a “database.”

21. If real-time processing is to occur, database records must be stored on random

24. A record pointer identifies a specific record in a flat database.

27. SQL stands for Sequential Query Language.

39. Because of the interaction of the database expansion of a distributed database is

41. With a client/server system all processing is done on the server.

42. IT general controls assist in preventing unauthorized access while providing

ANSWERS TO TEST BANK - CHAPTER 13 - TRUE/FALSE:

1. T 10. T 19. F 28. F 37. T

TEST BANK – CHAPTER 13 – MULTIPLE CHOICE

48. Data collected would be all but

49. Examples of data collection events are

51. Detailed information from a sale may be used by:

54. Storage media and methods of processing are:

55. Select the false statement from the following.

56. Select the true statement from the following.

57. A field is:

58. A record is:

60. A file is:

61. A database is:

62. Magnetic tape storage medium allows:

63. Random access means:

64. Direct access:

65. (Magnetic) Disk storage is:

66. (Magnetic) Disk storage is:

67. Batch processing:

68. Real-time processing:

69. Select the true statement from those provided.

70. Select the false statement from those provided.

71. Select the false statement from those provided.

72. Real-time data item processing is more complex because:

73. Batch processing of data items is less complex because:

74. Select the correct statement from those provided below.

75. Select the false statement from those provided below.

76. Select the correct statement from those provided below.

77. Data redundancy occurs:

79. Select the correct statement from the following.

80. Database management systems, DBMS, are:

82. Database relationships may be:

83. An example of a one-to-one relationship would be:

84. An example of a one-to-many relationship would be:

85. An example of many-to-many relationship would be:

86. A flat file database:

87. Processing of a flat file table is:

88. Flat file records are:

89. Tables in a flat file database must:

90. Hierarchical databases are not:

91. A record pointer is:

92. Hierarchal databases:

93. Network databases: