AIS Exam 3
The cost of a product liability claim can be classified as a(n) A) external failure cost. B) inspection cost. C) prevention cost. D) internal failure cost.
A
Which of the following is not a general threat to the revenue cycle? A) loss of customers B) poor performance C) unauthorized disclosure of sensitive information D) inaccurate master data
A
the ____ authorizes the transfer of raw materials from the storeroom to the production floor (A) move ticket (B) materials requisition (C) production order (D) bill of materials
B
Matching customer account numbers and inventory item numbers to the numbers in the customer and inventory master files is an example of a A) completeness test. B) validity check. C) reasonableness test. D) field check.
B
The basic document created in the billing process is call a ________. A) sales invoice B) bill of lading C) sales order D) packing list
A
Matching customer account numbers and inventory item numbers to the numbers in the customer and inventory master files is an example of a (A) completeness test (B) validity check (C) field check (D) reasonableness test
B
The best solution for maintaining accurate automated perpetual inventory system is to use A) RFID tags. B) periodic physical counts to reconcile with perpetual inventory records. C) point of sale devices integrated with inventory records. D) closed-loop verification when inventory is received from vendors and recorded.
A
At the end of each production run, preventive maintenance is done on the assembly line. The expenses associated with this maintenance are ________ overhead. A) batch-related B) product-related C) company wide D) department-based
A
Communications technology and the Internet can be used to reduce the time and costs involved in disseminating financial statement information. Users of such financial information still struggle in that many recipients have different information delivery requirements and may have to manually reenter the information into their own decision analysis tools. The ideal solution to solve these problems and efficiently transmit financial information via the Internet is to use A) XBRL. B) HTML. C) ACH. D) XML.
A
Duc An Incorporated provides free coffee to employees. Starbucks delivers coffee packages, sugar, creamer, and filters each week. Every month, Starbucks sends Duc An an invoice. This arrangement is best described as a A) blanket purchase order. B) fixed purchase order. C) standard purchase order. D) set purchase order.
A
In an activity based costing (ABC) system, a cause and effect relationship is known as a (A) cost driver (B) cost stimulator (C) cost catalyst (D) overhead stimulator
A
Manufacturing overhead is best described as A) costs that are not economically feasible to trace directly to specific jobs or processes. B) costs that are economically feasible to trace directly to specific jobs or processes. C) costs that cannot be traced directly to specific jobs or processes. D) costs that management has decided not to trace directly to specific jobs or processes.
A
The ________ is the production cycle document that specifies the quantity of each product to be produced and when production should begin. A) master production schedule B) operations list C) bill of lading D) receiving report
A
The general ledger system of an organization should be designed to serve the information requirements of both internal and external users. This means that the system should support A) producing regular periodic reports and respond to real-time inquiry needs. B) producing expansive regular periodic reports to cover all information needs. C) the real-time inquiry needs of all users. D) access by investors and creditors of the organization to general ledger balances.
A
The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas. He ordered 100 one-size fits all pajama bottoms, but when he ordered 1000 one-size fits all pajama tops, the following error message popped up: "Did you mean to enter a quantity of 1000 for your order?" This message is the result of a A) reasonableness test. B) closed-loop verification. C) limit check. D) validity check.
A
The packing slip A) lists the quantity and description of each item included in the shipment. B) lists the price and description of each item included in the shipment. C) lists the quantity, price, and description of each item included in the shipment. D) lists the quantity and price of each item included in the shipment.
A
To ensure proper segregation of duties, only the ________ has authority to issue credit memos. A) credit manager B) controller C) accounts receivable supervisor D) cashier
A
What is the best way to prevent the acceptance of goods that were never ordered? A) Match the packing slip to a purchase order before accepting delivery. B) Order only from approved vendors. C) Require specific authorization from the purchasing manager before accepting any goods. D) Enforce an appropriate conflict of interest policy in place.
A
When a customer places an order (on account) for a certain product, what should be done before the order is checked for inventory availability? (A) the customer's available credit should be checked (B) shipping should be notified of an order in process (C) the sales order should be created and written to a file (D) a picking list should be generated for the warehouse
A
Which objective listed below is not a cost accounting objective for the production cycle? A) Provide tests of audit control functions as part of the AIS. B) Provide information for planning, controlling, and evaluating the performance of production operations. C) Collect and process the information used to calculate inventory and cost of goods sold amounts that appear in the financial statements. D) Provide cost data about products used in pricing and product mix decisions.
A
Which of the following balanced scorecard dimensions provides measures on how well the organization is generating sales? A) Financial. B) Internal operations. C) Innovation and learning. D) Customer.
A
Which of the following will limit a firm's potential loss exposure from paycheck forgery? A) A separate payroll bank account. B) Prompt redeposit of unclaimed paychecks. C) Direct deposit of checks. D) Segregation of check distribution from payroll duties.
A
a clerk at grocery store scanned the bar code for a low cost bag of frozen chicken wings then gave his friend an expensive brand name bag of frozen chicken wings. Which of the following controls would best prevent the clerk from getting away with doing this? (A) use of RFID tags (B) physical inventory count (C) limited physical access to bar codes (D) segregation of duties
A
a company uses the method for tracking accounts receivable where customers pay according to individual sales invoices. This describes the ____ method (A) open invoice (B) cycle billing (C) monthly statement (D) balance forward
A
a number that enables customers to remit payments via an ACH credit without requiring the seller to divulge detailed information about its bank account is called (A) UPIC (B) UPC (C) EFT (D) EFDI
A
a type of business document in which part of the original document is returned to the source for further processing is called a ___ document (A) turnaround (B) closed loop (C) feedback (D) returnable
A
adjusting entries that are made to counteract the effects of errors found in the general ledger are called (A) corrections (B) deferrals (C) accruals (D) estimates
A
at the end of each production run, preventative maintenance is done on the assembly line. The expenses associated with this maintenance are ___ overhead. (A) batch related (B) product related (C) company wide (D) department based
A
financial statements are prepared in a certain sequence. which statement is prepared first? (A) the income statement (B) the statement of cash flows (C) the balance sheet (D) the adjusted trial balance
A
one way a firm could reduce the risk of problems with supplier dependability is to (A) require suppliers to be ISO 9000 certified (B) purchase inventory from only U.S. based suppliers (C) automate the purchasing function (D) use an ERP system for purchases
A
source data automation is often effective in reducing (A) accuracy (B) unintentional errors (C) intentional errors (D) theft
A
the ____ is the managerial report that shows planned cash inflows and outflows for major investments or acquisitions (A) profit (B) revenue (C) cost (D) investment
A
the acronym "RFP" stands for what? (A) request for proposal (B) request for project (C) request for processing (D) request for purchase
A
the basic document created in the billing process is called a _____ (A) sales invoice (B) packing list (C) sales order (D) bill of lading
A
the document that lists each employee's gross pay, payroll deductions, and net pay in a multicolumn format is called (A) the payroll register (B) a deduction register (C) an employee earnings statement (D) an employee time sheet summary
A
the purchase of a general ledger payroll clearing account is (A) to check the accuracy and completeness of payroll according and its allocation to cost centers (B) to make sure that all employees are paid correctly each week (C) to make the bank reconciliation (D) to prevent the cashier from having complete control of the payroll cycle
A
the risks associated with over production are likely of greatest concern to which company below? (A) a manufacturer that produces designer clothing (B) a manufacturer of printer paper (C) a mailbox manufacturer (D) a cereal manufacturer
A
traditionally, what did manufacturing firms use to track the amount of time a worker spends on each specific task? (A) job time ticket (B) punch card (C) RFID tags (D) sign in sheet
A
which of the following controls can minimize the threat of theft or fraudulent distribution of paychecks? (A) redeposit unclaimed paychecks and investigating cause (B) issuing earnings statements to employees (C) using biometric authentication (D) conducting criminal background investigation checks of all applicants for finance related positions
A
which of the following is not a general threat to the revenue cycle? (A) loss of customers (B) unauthorized disclosure of sensitive information (C) poor performance (D) inaccurate master data
A
which of the following statements is not true regarding XBRL? (A) XBRL's adoption will require accountants and systems professionals tag data for their clients (B) XBRL is a variant of XML (C) XBRL is specifically designed for use in communicating the content of financial data (D) XBRL creates unique tags for each data item
A
which type of payroll report contains information such as the employees' gross pay, payroll deductions, and net pay in a multicolumn format? (A) payroll register (B) deduction register (C) employee earnings statement (D) federal W-4 form
A
why might an organization find it most beneficial to involve accounts in product design? (A) because generally at least 65% of product costs are determined in the design stage and accountants can help minimize product costs (B) because involving accountants in product design boosts firm morale (C) because accountants are generally able to identify what consumers want in a new product (D) because accountants are generally able to improve the quality of new products
A
Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called A) estimates. B) revaluations. C) reconciliations. D) accruals.
B
Before a shipping notice is prepared during the revenue cycle, shipping department personnel should match the inventory received from the warehouse to the (A) sales order and bill of lading (B) picking ticket and sales order (C) sales order (D) picking tickets
B
Bogumil Distributors is an internet-based wholesaler. customers enter their orders online. The manager of Cezary Foods was entering an order when the following error message popped up: "your order exceeds your available credit. you will be contacted within 8 hours." this message is the result of a (A) reasonableness test (B) limit check (C) sign check (D) validity check
B
Consider the following revenue cycle scenario: the company has been exposed to customer dissatisfaction and the suggested control procedure to be implemented is to install and use bar-code scanners. What is the threat? (A) the company may be shipping orders to the wrong address (B) the company may be shipping the wrong merchandise (C) the company may be shipping wrong quantities of merchandise (D) all of the above threats may apply to this scenario
B
During the sales order entry process, a ________ is performed to verify that each transaction record contains all appropriate data items. A) redundant data check B) completeness test C) field check D) reasonableness test
B
For recording time spent on specific work projects, manufacturing companies usually use a A) labor time card. B) job time ticket. C) time card. D) time clock.
B
How does an MRP inventory system reduces inventory levels? A) by computing the exact costs of purchasing and carrying inventory B) by reducing the uncertainty regarding when materials are needed C) by receiving materials exactly when needed and in exact quantities D) none of the above
B
Identify the most correct statement with regard to how the various accounting subsystems update the general ledger. A) Individual journal entries for each accounting subsystem transaction update the general ledger every 24 hours. B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger. C) Nonroutine transactions are entered into the system by the treasurer's office. D) The controller or treasurer must approve accounting subsystem journal entries before any updating may occur.
B
Laz Chance wears roller blades and headphones when he is at work at the Squishy Things Toy Company. He is a product packer. The headphones give him computer-generated instructions so he knows the location of each item and quantity that should be included in the order. These instructions are the equivalent of a A) bill of lading. B) picking ticket. C) packing slip. D) sales order.
B
Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The account number referenced in your journal entry does not exist. Create a new account?" This is an example of a A) closed loop verification. B) validity check. C) completeness test. D) zero-balance check.
B
One of the basic activities in the expenditure cycle is the receiving and storage of goods, supplies, and services. What is the counterpart of this activity in the revenue cycle? A) cash collection activity B) shipping function C) cash payments activity D) sales order entry process
B
Recording interest earned on an investment is an example of which type of adjusting journal entry? A) Correcting entry. B) Accrual entry. C) Closing entry. D) Deferral entry.
B
The Gwallter Reece Chihuahua Sweater Co. (GRCCo) was established in 2013. It recently signed a large contract with PetCo pet stores. GRCCo will be required to track and forecast sweater sales by linking in to PetCo's sales database. GRCCo will then be responsible for shipping products to PetCo as needed. The relationship between GRCCo and PetCo is an example of A) optical character recognition. B) vendor-managed inventory. C) sales force automation. D) electronic data interchange.
B
The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date. A) accounts payable department B) cashier C) treasurer D) controller
B
The operating budget A) is used to plan for the purchase and retirement of property, plant, and equipment. B) depicts planned revenues and expenditures for each organizational unit. C) shows cash inflows and outflows for each capital project. D) compares estimated cash flows from operations with planned expenditures.
B
The payroll transaction file should contain A) changes in tax rates. B) time card data. C) entries to add new hires. D) All of the above are correct.
B
What is the main reason a list of potential alternative suppliers be maintained? A) so the firm can sample different suppliers B) in case the primary supplier is out of stock C) in case the primary supplier is more expensive D) to segregate purchasing suppliers
B
Which of the following control can reduce the distribution of fraudulent paychecks? A) Allow department managers to investigate unclaimed paychecks. B) Have internal audit investigate unclaimed paychecks. C) Match up all paychecks with time cards. D) Immediately mark "void" across all unclaimed paychecks.
B
Which of the following controls can minimize the threat of errors in processing payroll? A) Redepositing unclaimed paychecks and investigating cause. B) Issuing earnings statements to employees. C) Using biometric authentication. D) Conducting criminal background investigation checks of all applicants for finance related positions.
B
Which of the following controls can minimize the threat of mistakes in counting incoming inventory? A) The use of positive pay. B) Do not inform receiving employees about quantity ordered. C) The use of ERS. D) Perpetual inventory system.
B
Which of the following controls can minimize the threat of theft of inventory? (A) the use of innovative performance metrics (B) the use of periodic physical counts of inventory and reconciliation of those counts to recorded quantities (C) the use of encryption (D) the use of production planning systems
B
Which of the following factors is not of key importance when selecting inventory suppliers? A) product quality B) vendor corporate structure C) vendor delivery dependability D) product price
B
Which of the following would probably be the least effective control to mitigate the risk of paying a phony invoice payable for inventory purchases that were never made? A) Establish strict access and authorization controls for the approved vendor master file. B) Only pay from original invoices. C) Cancel all invoices and supporting documentation when paid. D) Require three-way match for all inventory purchase invoices.
B
Who generally is responsible for providing the accounting department with information about financing and investing activities to create the appropriate general ledger journal entries? A) The CEO. B) The treasurer. C) The CFO. D) The budget department.
B
Who should provide the adjusting entries in a well-designed general ledger and reporting system? A) Anyone who has access to the other major AIS subsystems. B) The controller office. C) The treasurer department. D) Various user departments.
B
________ is not a basic activity of the revenue cycle. (A) sales order entry (B) receiving (C) billing (D) shipping
B
a surprise count of an imprest petty cash fund should find the total of ___ equal to the amount authorized for the fund (A) cash and checks (B) cash and vendors (C) cash and credit memos (D) cash
B
customers that send their payments electronically directly to the billing company's bank are using (A) electronic data interchange (EDI) (B) electronic funds transfer (EFT) (C) procurement cards (D) an electronic lockbox
B
in a revenue cycle with proper controls, the _____ who reports to the _____, is not involved in any cash handling activities (A) cashier;treasurer (B) accounts receivable clerk;controller (C) accounts receivable clerk; treasurer (D) cash;controller
B
one way of ensuring that recurring adjusting journal entries are made each month would be to (A) program that entries to be made automatically (B) create a standard adjusting journal entry file (C) make all the entries a month in advance (D) rotate the responsibility among the accounting staff
B
procurement cards differ from corporate credit cards in which of the following ways? (A) procurement card invoices are sent separately for each card, whereas corporate credit cards are consolidated into a single invoice (B) procurement cards can only be used with approved vendors, but credit cards can be used anywhere (C) credit cards can be used to make purchases without an explicit sign off by supervisors, but procurement cards require a sign off (D) credit limits can be set for procurement cards, but not corporate credit cards
B
which information is necessary to create the master production schedule? (A) engineering department specifications and sales forecasts (B) sales forecasts, special orders information, and inventory levels (C) engineering department specifications and inventory levels (D) special orders information and engineering department specifications
B
which of the following are used to document entries made to update the general ledger? (A) subsidiary journal (B) journal vouchers (C) general journal (D) subsidiary ledgers
B
why is a separate payroll account used to clear payroll checks? (A) to separate payroll and expense checks (B) for internal controls purposes, to help limit any exposure to loss by the company (C) to make bank reconciliation easier (D) all of the above are correct
B
A JIT inventory system would be especially useful for a company that manufactures A) toothpaste. B) motor oil. C) toys associated with new movie releases. D) alarm clocks.
C
A method for tracking accounts receivable that matches specific invoices and payments from the customer is called a(n) ________ method. A) balance forward B) specific identification C) open-invoice D) cycle billing
C
A payroll clearing account is used to A) reduce the transaction costs associated with payroll transaction processing. B) eliminate the need to manually record payroll transactions. C) check the accuracy of payroll costs. D) speed up payroll transaction processing.
C
Although there are some similarities between JIT and MRP, identify one major difference below. A) requires more analysis than EOQ B) reducing the opportunity for inventory theft C) production scheduling D) reducing inventory carrying costs
C
An accounts receivable aging report is useful for doing everything except A) estimating bad debts. B) projecting the timing of future cash flows. C) estimating future sales. D) deciding whether to increase a specific customer's credit limit.
C
For recording time spent on specific work projects, manufacturing companies usually use a (A) time clock (B) labor time card (C) job time ticket (D) time card
C
For strongest segregation of duties, the credit manager should never report to A) the IT department. B) the credit department. C) the marketing department. D) the accounting department.
C
How can PLM software improve the efficiency and effectiveness of the product design process? A) It can simulate how new products will be manufactured. B) It can store all the data associated with all products. C) It can eliminate the costs associated with creating and destroying physical prototypes. D) All of the above
C
If a firm does not use an ERP, the best way to mitigate the risk of the destruction of master data is to A) use an ERP. B) use multiple master data files. C) implement backup and disaster recovery procedures. D) proper segregation of duties.
C
Just-In-Time (JIT) inventory is best characterized by A) infrequent bulk deliveries of items directly to work centers. B) less frequent deliveries of large quantities of goods to central receiving. C) frequent deliveries of smaller quantities of items to the work centers. D) frequent deliveries of large quantities to be held at the work centers.
C
Marina Filimena is an accountant at Jasmina Hair Products. Marina received the following error message while making an adjusting entry to the general ledger: "The amounts debited and credited are not equal. Please correct and try again." This is an example of a A) validity check. B) field check. C) zero-balance check. D) completeness test.
C
Once a vendor is selected for a product, the vendor's identity is recorded in the A) purchase requisition master file. B) inventory transaction file. C) inventory master file. D) purchase requisition transaction file.
C
One objective of accounts payable is to authorize payment only for goods or services actually ordered and received. The best way to process supplier invoices is to use A) EDI for all small, occasional purchases from suppliers. B) a nonvoucher system. C) a disbursement voucher system. D) electronic funds transfer for small, occasional purchases from suppliers.
C
Regularly reviewing an accounts receivable aging report can help management do what? A) determine whether the firm's pricing policy is effective B) improve the speed which customers make payments C) determine whether changes are needed in the firm's credit policies D) identify customers who have not purchased anything lately
C
Regularly reviewing an accounts receivable aging report can help management do what? (A) improve the speed which customers (B) identify customers who have not purchased anything lately (C) determine whether changes are needed in the firm's credit policies (D) determine whether the firms pricing policy is effective
C
Restricting access to the approved supplier list can A) eliminate the risk of duplicate payment. B) improve the efficiency of the expenditure cycle. C) help reduce the risk of fraudulent disbursements. D) cause purchase order approval delays.
C
The AIS compiles and feeds information among the business cycles. What is the relationship between the revenue and production cycles regarding the exchange of information (A) the revenue cycle receives information from the production cycle about raw materials needs (B) the production cycle sends cost of goods manufactured information back to the revenue cycle (C) the revenue cycle provides sales forecast and customer order information to the production cycle, but the production cycle sends information back to revenue about finished goods production (D) the production cycle does not exchange information with the revenue cycle
C
The ____ is a legal contract that defines responsibility for goods that are in transit (A) back order (B) packing slip (C) bill of lading (D) picking list
C
The ____ is the managerial report that shows planning cash inflows and outflows for major investments or acquisitions. (A) Journal voucher list (B) operating budget (C) capital expenditure budget (D) statement of cash flows
C
The balanced scorecard attempts to solve what major issue associated with traditional accounting reports? A) Traditional accounting reports are not easily understood by non-accountants. B) Traditional accounting reports are produced too slowly to provide value. C) Traditional accounting reports focus too narrowly on financial performance. D) Traditional accounting reports are expensive to produce.
C
The legitimacy of customer orders is established by ________ in paper-based customer orders. A) prior experience with the customer B) the customer's verbal authorization C) the customer's signature D) the customer's pin number
C
To accomplish the objectives set forth in the expenditure cycle, a number of key management decisions must be addressed. Which of the decisions below is not ordinarily found as part of the expenditure cycle? (A) what is the optimal level of inventory and supplies to carry on hand? (B) How can cash payments to vendors be managed to maximize cash flow? (C) what are the optimal prices for each product or service? (D) where should inventories and supplies be held?
C
What control procedure(s) should be used to reduce the risk of the destruction of financial statement master data? A) Multifactor authentication. B) Encryption. C) Backup and disaster recovery. D) All of the above.
C
What control would best mitigate the threat of paying an invoice twice? A) approval of purchase orders B) maintaining adequate perpetual inventory records C) never authorizing payment of a photocopy of an invoice D) double-checking mathematical accuracy of invoices
C
What is a key feature of materials requirements planning (MRP)? (A) determine the optimal reorder point (B) determine the optimal order size (C) reduce required inventory levels be scheduling production rather than estimating needs (D) minimize or entirely eliminate carrying and stockout costs
C
What specific control can help restrict the rights of authorized users to only the portion of a database needed to complete their specific job duties? A) closed-loop verification B) specific authorization C) an access control matrix D) passwords and user IDs
C
When would an MRP inventory approach be preferred to a JIT inventory approach? A) when a product has a short life cycle B) when demand for inventory is very unpredictable C) when demand for inventory is fairly predictable D) MRP is always a preferred method over JIT.
C
Which is the best control to prevent invoicing customers for more than the actual quantity shipped? (A) use the information from the bill of lading to prepare the sales invoice (B) use the information from the picking ticket to prepare the sales invoice (C) use the information from the packing slip to prepare the sales invoice (D) use the information from the sales order to prepare the sales invoice
C
Which of the following controls can minimize the threat of loss or destruction of data? A) Training and experience in applying IFRS and XBRL. B) Responsibility accounting. C) Backup and disaster recovery procedures. D) Restriction of access to general ledger.
C
Which of the following controls can minimize the threat of theft of inventory? A) Separation of billing and shipping functions. B) Use of cash registers. C) Bar-code and RFID technology. D) Restriction of access to master data.
C
Which of the following is a control that addresses the threat of unauthorized changes to the payroll master file? A) Restriction of access to the EFT system. B) Biometric authentication. C) Segregation of duties. D) Sound hiring procedures.
C
Which of the following is generally not a major source of input to a payroll system? A) Time and attendance data. B) Withholdings and deduction requests from employees. C) Checks to insurance and benefits providers. D) Payroll rate changes.
C
________ is not a basic activity of the revenue cycle. A) Sales order entry B) Shipping C) Receiving D) Billing
C
a way to incorporate the advantages of electronic data interchange with the electronic funds transfer is (A) to use procurement cards (B) an electronic lockbox (C) financial electronic data interchange (D) e-commerce
C
all of the following regarding payroll checks is correct except (A) payroll checks should be sequentially pre-numbered (B) access to payroll checks should be restricted (C) payroll checks should be drawn on the organization's regular bank account(s) (D) the cashier should sign payroll checks
C
an organization can implement which of the following controls to reduce the threat of inventory theft or damage? (A) improved and more timely reporting (B) review and approval of fixed asset acquisitions (C) document all movement of inventory through the production process (D) better production and planning systems
C
as each payroll transaction is processed, the system should also, (A) use cumulative totals generated from a payroll to create a summary journal entry to be posted to the GL (B) allocate labor costs to appropriate general ledger accounts (C) both A and B above (D) the HRM system should not perform either activity A or B
C
during the sales order entry process, a _____ is performed to compare the quantity ordered (A) completeness test (B) redundant data check (C) reasonableness test (D) field check
C
how can CAD software help improve the efficiency of effectiveness of the product design process? (A) it can simulate how new products will be manufactured (B) it can store all the data associated with all products (C) it can eliminate the costs associated with creating and destroying the physical prototypes (D) all of the above
C
identify one control that can be used to mitigate the threat of poor product design that results in excess costs (A) encryption (B) insurance (C) analysis of warranty and repair costs (D) production planning systems
C
identify the items below that is not a desired result of an employee bonus system (A) employees may analyze their work environment and find ways to cut costs (B) employees may work harder and may be more motivated to exceed target goals to earn a bonus (C) employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus (D) employees may look for ways to improve service
C
the traditional approach to inventory management generally involves (A) minimize item cost (B) receiving goods or services just prior to the time they are needed (C) maintaining inventory levels so that production can continue even if inventory use is greater than expected (D) high stockout costs
C
the use of various forms of information technology in the production process is referred to as (A) computer intense manufacturing (B) computerized integration of machines (C) computer-integrated manufacturing (D) computerized investments and machines
C
to ensure proper segregation of duties, only the ____ has authority to issue credit memos (A) cashier (B) accounts receivable supervisor (C) credit manager (D) controller
C
what does the first term in the throughput formula, productive capacity, represent? (A) the minimum number of units that can be produced given current technology (B) the percentage of "good" units produced given current technology (C) the maximum number of units that can be produced given current technology (D) the percentage of total production time used to manufacture a product
C
which control would be most appropriate to address the problem of inaccurate payroll processing? (A) an imprest payroll checking account (B) redepositing unclaimed paychecks and investigating cause (C) cross-footing of the payroll register (D) segregation of duties: HRM department updates master data, but only payroll department issues paychecks
C
which of the following balanced scorecard dimensions provides measures on how well the organization is developing new products and training its workforce to continuously improve service and results (A) financial (B) internal operations (C) innovation and learning (D) customer
C
A "zero balance check" refers to which of the following control procedures? A) cross-footing the payroll register B) trial balance showing that debits equal credits C) The ACH clearing account shows a zero balance once all entries are posted. D) The payroll clearing account shows a zero balance once all entries are posted.
D
A ___ system posts an approved invoice to the vendor account and stores it in an open invoice file until payment is made by check (A) voucher (B) evaluated receipt settlement (C) cycle (D) nonvoucher
D
A monthly statement sent to customers serves a control purpose by A) summarizing invoices and amounts due for customers. B) reminding customers of the balance due and due date. C) triggering the process to record a customer payment. D) providing an opportunity for customers to verify the balance owed and activity on the account.
D
A monthly statement sent to customers serves a control purpose by (A) summarizing invoices and amounts due for customers (B) reminding customers of the balance due and due date (C) triggering the process to record a customer payment (D) providing an opportunity for customers to verify the balance owed and activity on the account
D
A receiving clerk notes that a delivery of 10 units has been received, but the purchase order specified 12 units. A debit memo will need to be prepared to adjust for the difference between the quantity ordered and received. Who should prepare this document? A) the vendor B) the receiving clerk C) the controller D) the purchasing department manager
D
A way to incorporate the advantages of Electronic Data Interchange with the Electronic Funds Transfer is A) to use procurement cards. B) e-commerce. C) an electronic lockbox. D) Financial Electronic Data Interchange.
D
Adjusting entries that are made to recognize revenue that has been received but not yet earned are classified as A) accruals. B) estimates. C) revaluations. D) deferrals.
D
Detailed data about reasons for warranty and repair costs is considered an applicable control used to mitigate the threat of A) suboptimal investment of fixed assets. B) underproduction. C) overproduction. D) poor product design.
D
IFRS stands for (A) international and financial reporting statements (B) international forensic response system (C) international financial recovery system (D) international financial reporting standards
D
Identify the role below that accountants can play in the production cycle. A) help an organization choose an inventory control system B) perform cost analysis C) participate in product design D) all of the above
D
In a revenue cycle with proper controls, the ________ who reports to the ________, is not involved in any cash handling activities. A) accounts receivable clerk; treasurer B) cashier; treasurer C) cashier; controller D) accounts receivable clerk; controller
D
In the ___ method of tracking accounts receivable, customers pay according to the amount showing on their monthly statement and payments are applied against the total account balance (A) specific identification (B) remittance advice (C) open-invoice (D) balance forward
D
Payroll deductions fall into the broad categories of ________ and ________. A) voluntary deductions; income taxes B) unemployment taxes; income taxes C) unemployment; social security taxes D) payroll tax withholdings; voluntary deductions
D
The ________ authorizes the transfer of raw materials from the storeroom to the production floor. A) bill of materials B) production order C) move ticket D) materials requisition
D
The ________ specifies the point at which inventory is needed. A) company inventory policies B) economic order quantity C) stockout point D) reorder point
D
The threat of violation of employment laws relates directly to which activity? A) Benefit processing. B) Payroll processing. C) The collection employee time data. D) Hiring and recruiting.
D
What control procedure(s) should be used to reduce the risk of unauthorized disclosure of the financial statements? A) Physical security. B) Multifactor authentication. C) Encryption. D) All of the above.
D
What is a typical procedure for processing sales orders from new customers or customers making a purchase that causes their credit limit to be exceeded? (A) the sales clerk should order a report from a credit bureau before approving the order (B) general authorization to approve the order is given to sales clerks (C) the sale should be rejected (D) specific authorization must be granted by the credit manager
D
Which of the following are appropriate controls for the general ledger and reporting system? A) Using well-designed documents and records. B) Prenumbering documents and accounting for the sequence numbers. C) Online data entry with the use of appropriate edit checks. D) All of the above are appropriate.
D
Which of the following controls can minimize the threat of over- and underproduction? A) The use of innovative performance metrics. B) The use of periodic physical counts of inventory and reconciliation of those counts to recorded quantities. C) The use of encryption. D) The use of production planning systems.
D
Which of the following is not a key decision that needs to be made in the revenue cycle? (A) how should merchandise be delivered to customers? (B) how can customer payments be processed to maximize cash flow? (C) should credit be extended to customers? (D) which vendor should inventory be purchased from?
D
Which of the following is not a product design objective? A) Minimize production costs. B) Design a product that meets customer requirements. C) Design a quality product. D) Make the design easy to track for cost accounting purposes.
D
Which of the following is not an activity performed in the expenditure cycle? A) receiving B) ordering C) cash disbursement D) shipping
D
Yasamin Roshni owns and operates a small deli in Miami, Florida. Each morning she prepares a list that describes the quantity and variety of subs that will be prepared during the day. This list is an example of a(n) A) materials requisition. B) bill of materials. C) operations list. D) production order.
D
adjusting entries that reflect a change in accounting principle used to value inventories are (A) estimates (B) deferrals (C) corrections (D) revaluations
D
an effective way an organization can eliminate paper paychecks while maintaining adequate accounting records is to (A) pay with money orders (B) use electronic funds transfer (C) pay in cash only (D) use direct deposit
D
depreciation expense and bad debt expense are examples of which type of adjusting journal entry? (A) deferrals (B) closing (C) accruals (D) estimates
D
if available, a 1% discount for payment within 10 days instead of 30 days represents an approximate saving of ____% annually (A) 12 (B) 36 (C) 1 (D) 18
D
not all journal entries affect cash flow. adjusting entries that reflect events that have already occurred, but have no effect on cash, are classified as (A) corrections (B) deferrals (C) revaluations (D) accruals
D
the accounts receivable clark destroys all invoices for sales made to family and friends and does not record the sales in the accounts receivable subsidiary ledgers. the family and friends usually give the clerk cash as a "thank you." which procedure will not prevent or detect this fraud? (A) reconcile sales invoices in the billing department to the total debits to accounts receivable subsidiary ledgers (B) reconcile the accounts receivable control account to the accounts receivable subsidiary ledger (C) sequentially prenumber all invoices and prepare a sequence check at the end of the day (D) send monthly statements to all customers with balanced owed
D
the operations list shows (A) the time expected to complete each step or operation (B) the labor and machine requirements (C) the steps and operations in the production cycle (D) all of the above
D
the results of an internal audit finds that there is a problem with inaccurate time data being entered into the payroll system. What is an applicable control that can help prevent this event from occurring in the future? (A) review of appropriate performance metrics (B) sound hiring procedures (C) proper segregation of duties (D) automation of data collection
D
variances for variable costs will be misleading when the planned output differs from budgeting output. a solution to the problem would be (A) to better predict the final output (B) to use a stricter budgeting process (C) to allow more judgement involve in the budgeting process (D) to use flexible budgeting
D
which of the following balanced scorecard dimensions provides measures on how well the organization is working to improve customer satisfaction and become the preferred supplier for key customers? (A) financial (B) internal operations (C) innovation and learning (D) customer
D
which of the following tasks are facilitated by maintaining a strong and secure audit trail? (A) tracing an item in a report back through the general ledger to the original source document (B) tracing a transaction from original source document to the general ledger to a report (C) tracing changes in general ledger accounts from beginning to ending balances (D) all of the above are facilitated by the audit trail
D
which of the following user groups generally receive information produced by the general ledger and reporting system? (A) inquiry processing by internal or external users (B) external users (C) internal users (D) all of the above
D
