ACC 361 - Exam 1 INPs, Practice Exam, Jeopardy Game
True
T/F - An example of the one-for-one checking control plan is the comparison of shipment to sales order and picking ticket
False
T/F - Assuming there are 50 inventory items already on hand, when a purchase order of 20 items is generated in the system, the stock status in the inventory master data is: Unrestricted use = 70, On-order stock = 20
True
T/F - Based on the role-playing game, the general ledger master data is updated when a shipping notice is sent to the carrier with the goods
PG: Commonstock
What is an example of a customized XBRL tag?
The purchasing department
What is considered a front-office department in e-Business?
The historical cost valuation method has the best predictive/feedback value
What is incorrect about the applications of qualities of information framework?
Requires the CEOs and CFOs to certify the trustworthiness of the financial statements and internal controls
What is true about SOX 302?
Managerial Reporting Officer
Who is usually responsible for preparing operating center performance reports based on the actual results from the business reporting department?
Financial Reporting Officer
GAAP based financial statements are prepared by whom?
Materiality
A $500 unintentional error in accounting adjustments is often ignored by auditors of multi-billion dollar corporations because such error does not affect decision makers
Receiving report (stock notice)
A _____ is sent from the receiving department to the warehouse with goods.
Match invoice, purchase order, and receiving report
A control plan that ensures both input validity (IV) and input accuracy (IA) in payables processing is what?
Managerial Reporting Officer
A manager with responsibilities and expertise for preparing internal reports to assist management decision making
Accuracy
A sales clerk typed in a sales order document into the ERP system. However, the clerk forgot to input the second line of customer address
Accuracy
A sales representative forgets to enter the customer number on the sales order, which is a required input field. This is an error of input _____ .
Open-item system
A system where a customer makes payments for specific invoices when due, and AR master data consists of individual open invoices against which payments and adjustments are applied
False
T/F - A trapezoid represents printing of purchase requisitions by the computer
Predictive Value
Advanced data analytics tool such as regression analyses that improve a decision makers ability to predict, confirm, or correct earlier expectations
Completeness
After receiving the vendor invoice in the ERP system, an accounts payable trainee clicked the "post" button twice. As a result, the system now has journal entry no. 77567 and no. 77568 representing the same transaction
Integrity
An information quality that can be expanded into validity, accuracy, and completeness
Journal voucher
An internal source document used to notify the general ledger to make an accounting entry. Examples include documents for depreciations or accrued interest expenses
Approve the request of changing inventory costs and update inventory costs in master data
Based on the CARE framework of separation of duties, which of the following duties can be performed by the same individual?
Purchase requisition data, inventory master data, purchase order data/history
Based on the role-playing game in the purchasing cycle, which databases are updated when four copies of the purchase orders are sent to the recipients?
Sales order, shipping notice
Before preparing the billing document, the B/AR/CR department receives two documents, and they are: _______ and _______ .
Blind copy of the purchase order, goods (with a packing slip)
Before preparing the receiving report, the receiving department receives two documents/items. They are: _______ and ______ .
Increased
Holding other things equal, EOQ is ______ (increased, decreased, not changed) when the ordering cost per purchase order goes up
Validitiy
In SAP, the system can be configured so that any purchase of fixed assets over $10,000 total cost has to be approved by the capital budget managers
General ledger master data, accounts receivable master data, sales order document flow
In a B/AR/CR process, which databases are likely to be updated when a billing document is prepared and sent to the customer?
Customer check, remittance advice
In a cash receipts system without a lockbox, the mailroom receives two documents from the customer, and they are: _______ and ______ .
Cashier
In a logical data flow diagram (DFD) for a cash receipts system, each of the following labels might appear except: prepare deposit, record customer payment, cashier, customer
Accounts Payable Master Data
In a purchasing process using a post-billing system, receiving goods, but not a vendor invoice, from a supplier typically results in an update to all of the following data stores except: accounts payable master data, general ledger master data, purchase order data/history, inventory master data
Safeguard inventory while in storage at warehouse and examine and count inventory periodically
In a well-designed internal control system, the same employee may be permitted to do what?
accounts payable, accounts receivable
In the SUA project, when handling a sales return on account, the customer will send a return request (i.e., a debit memo) and debit _____ , and Warren will respond with a credit memo and credit _____.
Accounts payable master data, purchase order data/history, general ledger master data
In the role-playing game, which of the following databases are updated when receiving the invoice from the vendor?
customer, B/AR/CR, shipping department
In the role-playing game, who were recipients of sales orders?
Send a purchase requisition to the purchasing department
On a systems flowchart, which of the following activities is the least likely to require an accounting journal entry: send checks to the bank for deposits, receive invoice from the vendor, update periodic depreciations on general journal, send a purchase requisition to the purchasing department
Comparability
One of the major purposes of GAAP is to standardize the financial reporting practices between two firms in the same industry. As a result, investors can easily conduct ratio analyses or other forms of comparisons between the firms
Depreciation of Fixed Assets
Requires a journal voucher
SOX Section 409
Requires rapid and current disclosure of financial information
SOX Section 404
Requires that the auditor is responsible for testing and evaluating the effectiveness of the internal control systems and provide an attestation opinion of internal control over financial reporting
SOX Section 302
Requires the CEOs and CFOs to certify the trustworthiness of the financial statements and internal controls
False
T/F - Customer master data is periodically maintained by the sales order department to reflect the current status of the customers such as customer credit terms or credit limits. This department is also in charge of approving new customers
True
T/F - Examples of external users of financial accounting information include suppliers (i.e., vendors), banks, customers, investors, and external auditors
False
T/F - General ledger master data organizes accounting information using posting dates rather than a chart of accounts. In the database, the debit or credit side of each journal entry takes a row of the table
False
T/F - In Reorder point (ROP) analysis, each item is assigned a reorder point, which is equivalent to the inventory entry point, based on its purchase rate
False
T/F - In flowcharting, in some rare cases, two input/output symbols can be directly connected without a process symbol in between. For example, a database symbol can link to a document symbol without any process symbol in between them
False
T/F - One of the major contributions of XBRL is that it enhances the likelihood of detecting financial reporting fraud through the customization of tags
True
T/F - Recall from the role-playing game, notifications that a PO has been prepared and sent to the vendor are sent to the receiving department, the accounts payable department, and the department or process that requested the purchase (usually the warehouse)
True
T/F - Remote deposit capture uses scanners or smartphones to capture check images and to use those images, instead of a paper check, to make a deposit to a bank account. This method expedites the speed of cash collection as it reduces the process time of deposit in transit
False
T/F - The accounts receivable aging report is prepared based on the information in the general ledger account of accounts receivable (AR). Therefore, information from the AR sub-ledger is not relevant to the aging report
True
T/F - The audit trial method that starts from source documents and tie the numbers to journals/ledgers then to financial statements is called tracing
True
T/F - The control plan "Compare shipment to sales order and picking ticket" is to ensure that the shipping notice inputs (i.e., sales order and picking ticket) are represented by an actual shipment of goods
False
T/F - The control plan Independent billing authorization primarily addresses the control goal of ensuring input completeness of shipping notices
True
T/F - The economic order quantity (EOQ) will go up if annual demand is increasing together with a decrease in holding cost
False
T/F - The sales order document flow is completed or cleared when the company receives the customer payment to close the open item (i.e., open accounts receivable)
True
T/F - The warehouse is considered a back-office function in the framework of E-Business
False
T/F - Typical examples of feeder processes are investing or financing activities such as purchasing fixed assets or issuing common stocks
True
T/F - When changing from a physical data flow diagram (DFD) to a logical DFD, the words in the bubbles will be different, but the words in the squares will remain the same
Consistency
The _____ principle ensures that within a company, accounting methods cannot be frequently changed.
Payment request (voucher)
The accounts payable department sends out the ________ to the cashier to trigger the cash disbursement process.
Input completeness
The control plan "review file of open sales orders (tickler file) is directed primarily toward achieving the control goal of ensuring what?
IV, IA
The control plan match invoice, purchase order, and receiving report (the three-way match) ensures _____ and _____ (options: IV, IC, IA, UC, UA).
IC
The control plan review open purchase orders (tickler file) ensures _____ (options: IV, IC, IA, UC, UA).
IV
The control plan turnaround documents: remittance advice ensures _____ (options: IV, IC, IA, UC, UA).
Purchase requisition
The document usually generated by the warehouse department to initiate the purchasing process is what?
Sales discounts allowed when customers take advantage of the credit terms
The failure to record this transaction has no effect on the quantity of inventory.
A vendor invoice is recorded after receiving the goods
The purchase order/data history is closed at which step?
Verifiability
The quality of information when there is a high degree of consensus about the information among independent measure using the same measurement methods
Cashier, Accounts Payable, General Ledger
The typical accounts payable/cash disbursements (AP/CD) process would capture and record data related to the day-to-day operations of all of the following departments:
A copy of a purchase order is sent to the accounts payable department
The typical horizontal flows of information in an accounts payable/cash disbursements (AP/CD) process will not include what?
Pre-billing system
This is a system where invoice prepared upon acceptance of customer order. It is the method used in the SUA project
Float
This term represents the time between customer payment and the availability of good funds
T/F - In system flowcharts, document flows are presented using solid lines, whereas information flows are presented using dotted lines
True
Independent validation of vendor invoice
Under this control plan, authority to record a vendor invoice comes from the PO and receiving report data created by entities other than the entity that records the vendor invoice and typically requires segregation of duties among purchasing, receiving and accounts payable.
If the level 0 diagram has one arrow going into bubble number 1.0 and two arrows leaving bubble number 1.0, then diagram 1.0 will show one arrow entering and two arrows leaving; the level 0 diagram is the next level down from the context diagram; curved arrows represent a pathway for data
What about the construction of DFDs is true?
The warehouse, the accounting department, the receiving department
What are considered back-office departments in e-Business?
Independent validation of vendor invoices, independent authorization to make payment, the three-way match
What are some control plans of the AP/CD (accounts payable and cash disbursements) process?
General ledger master data, accounts receivable master data, cash receipts data/pre-list
What databases are updated after collecting payments from the customer?
Purchase order, receiving report, vendor invoice
What documents are the three documents compared when validating a vendor invoice (three-way-match)?
The purchase order that sent to the receiving department should not show the quantity of the goods, it ensures input accuracy, this step is performed by the receiving department
What does the control plan "compare input receipt (i.e., goods receipt) data to PO data?" ensure?
The checks that are deposited to the bank
What from the SUA project is unlikely to be filed in the shipping/banking tab?
Requires that the auditor is responsible for testing and evaluating the effectiveness of the internal control systems and provide an attestation opinion of internal control over financial reporting
What is true about SOX 404
Requires rapid and current disclosure of financial information
What is true about SOX 409?
It is often a "stab" attached to the invoice, it ensures input validity, it is one of the documents that trigger the cash receipt process
What is true about a turnaround document (i.e. remittance advice)
It does not fully utilize the CARE framework of internal control, it uses a balanced-forward system to monitor customers' accounts receivable balances, it uses a pre-billing system and does not require a sales order
What is true about the SUA project?
Remittance Advice
What would normally trigger a B/AR/CR process to record a customer payment?
Inventory master data
When the sales order department prepares sales orders, which database is updated?
Sales order document flows
Which data stores is served as an audit trail to record detailed steps in the OE/S cycle?
Customer, cashier, bank
Which entities would you expect to appear in the normal routines of the Billing/Accounts Receivable/Cash Receipts (B/AR/CR) process?
The general ledger account of accounts receivable, credit terms, customer number
Which information items are most likely to be stored in customer master data?
Controller
Which is least likely to report directly to the vice president of logistics: receiving department, purchasing department, controller, warehouse
B/AR/CR (billing), B/AR/CR (payment), general ledger
Which of the following departments/individuals either receives or prepares the invoice to the customer?
Issue bond or stock
Which of the following is not an example of a transaction in the feeder process: receive customer payment, issue bond or stock, pay freight charge, sent billing document to the customer?
The arrow should go from Vendor master data to Process query
Which of the following statements is correct about the following flowchart for a computer system?
Decreasing both ordering cost and holding cost will decrease the EOQ
Which of the following statements is incorrect regarding techniques of inventory management?: ABC analysis is different from ABC costing, the reorder point of inventory plus a lead time determine the entry time of inventory, increasing the annual demand of inventory will increase the EOQ, decreasing both ordering cost and holding cost will decrease the EOQ
Accrue interest expense at the end of the month
Which of the following transactions requires a journal voucher?
Perform billing, receive customer payment, manage customer accounts
Which processes would you expect to see in the B/AR/CR process?
Compare picking ticket to picked goods
___________________ is an example of one-for-one checking that ensures that the correct goods are picked from the shelf and that any errors are detected and corrected in a timely manner.
Timeliness
information that is available to a decision maker before it loses its capacity to influence a decision
Relevance
information that is capable of making a difference in a decision of a user
