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