ACC 361 - Miami University Midterm

The control plan match invoice, purchase order, and receiving report (the three-way match) ensures _____ and _____ (options: IV, IC, IA, UC, UA).

IV & IA

Which of the following business processes requires a journal entry to the financial accounting (FI) module? a) Conducting BI analyses b) Purchase requisitions are covered into purchase orders and sent out to the vendor c) Goods delivered to the customer under FOB shipping point d) Running MRP

c) Goods delivered to the customer under FOB shipping point

This is a system where invoice prepared upon acceptance of customer order/quotation. This system does not use a GR/IR account.

pre-billing system

Assuming your company is US## in SAP, and the transaction code is FB50 for journal vouchers. Describe the system message of the journal entry below: Dr. Trade accounts receivable Cr. Sales revenue

Account ###### in company code US## cannot be directly posted to

What is the best control plan? Proper comparisons are not made to ensure that the shipping notice inputs are represented by an actual shipment of goods.

Compare shipment to sales order and picking ticket

The control plan turnaround documents: remittance advice ensures _____ (options: IV, IC, IA, UC, UA).

IV

The accounting journal entries in a typical sales order document flow are: _________ .

Dr. COGS Cr. Inventory Dr. AR Cr. Sales revenue

Goods are received from the vendor totaled $100,000, but the invoice has not been received. The journal entry is ______ .

Dr. Inventory $100,000 Cr. GR/IR $1000

T or 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.

False

T or F: The control plan Compare shipment to sales order and picking ticket is performed by the sales department, and the purpose of the control plan is to ensure input completeness of the sales order inputs.

False

T or 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).

False

T or F: Tracing is an audit technique that starts from looking at financial accounting records and tie them back to source documents. Tracing ensures both the occurrence of the transactions and the completeness of the accounting records.

False

The control plan review open purchase orders (tickler file) ensures _____ (options: IV, IC, IA, UC, UA).

IC

From the information integrity point of view, a reversing entry in SAP improves _________ by not deleting the original journal entry and creating a new document number in the system, and it also improves __________ by referencing the original journal entry.

IC & IA

An internal source document used to notify the general ledger to make an accounting entry. Examples include documents for depreciation or accrued interest expenses.

Journal Voucher

What is the best control plan? Several cash collection journal entries cannot be posted to the system due to potential errors.

Procedures for rejected inputs

What is the best control plan? Several shipments have not been made in a timely manner.

Review open sales orders

T or F: Customer master data is periodically maintained by the credit 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 or F: In SAP, general ledger accounts with subledger assignments cannot be directly posted to the database using FB50 (Journal Voucher, Enter G/L Account Document: Company Code US##)

True

T or F: In a typical ERP organizational structure, shipping point is a component in sales and distributions (SD), whereas the storage location is a component in materials management (MM).

True

T or F: Recall from the role-playing game, the four copies of the purchase order were sent to the vendor, the receiving department, the accounts payable department, and the department or process that requested the purchase (usually the warehouse).

True

T or 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.

True

T or F: The economic order quantity (EOQ) will go up if annual demand is increasing together with a decrease in holding cost.

True

Before preparing the receiving report, the receiving department receives two documents/items. They are: _______ and ______ .

a blind copy of the purchase order and goods (with a packing slip) from the vendor

___________________ 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. a) Compare picking ticket to picked goods. b) Compare input receipt data to purchase order data c) Compare shipment to sales order and picking ticket. d) Independent shipping authorization.

a) Compare picking ticket to picked goods.

Which of the following is incorrect about the applications of qualities of information framework? a) The historical cost valuation method has the best predictive/feedback value. b) Materiality is a relative term rather than an absolute term. The same dollar amount can be material or immaterial for different companies. c) There is a trade off between relevance and reliability. d) The standardization of XBRL tags enhances comparability

a) The historical cost valuation method has the best predictive/feedback value.

The ________ module of a typical ERP system is a core module that contains core functions related to the aspects in managerial accounting such as cost centers and profit centers. a) controlling b) business warehousing c) materials management d) supply chain management

a) controlling

The document usually generated by the warehouse department to initiate the purchasing process is a a) purchase requisition b) purchase order c) packing slip d) vendor invoice

a) purchase requisition

_____, ______, and _____ will be updated when a company processes the payment to the vendor

accounts payable master data, cash disbursement events data, and general ledger master data

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 _____ .

accuracy

Which of the following transactions requires a journal voucher? a) Prepare a debit memo and send to the vendor b) Accrue interest expense at the end of the month c) Investment in another company's stock d) Receive customer quotation

b) Accrue interest expense at the end of the month

Based on the SAP project and assuming a post-billing system, which of the following actions does not produce a journal entry to the financial accounting (FI) module? a) Receiving goods without a vendor invoice b) Convert planned order to purchase requisition and purchase order c) Post goods issue to the customer d) Reverse an incorrect journal entry to cancel out the effects

b) Convert planned order to purchase requisition and purchase order

In SAP, which of the following journal entries cannot be found using FBL5N (Customer line item display)? Note: Please assume that each journal entry has both an entry view and a general ledger view. a) Dr. Bank Cr. Customer## b) Dr. Inventory Cr. GR/IR (Goods Receipt / Invoice Receipt) c) Dr. Bank Cr. Trade accounts receivables d) Dr. Customer## Cr. Sales Revenue

b) Dr. Inventory Cr. GR/IR (Goods Receipt / Invoice Receipt)

Which of the following is incorrect about the sections in the SOX? a) Section 302 requires the CEOs and CFOs to certify the trustworthiness of the financial statements and internal controls. b) Section 401 requires detailed disclosures of inventory valuation methods and requires a retroactive adjustment of changes in inventory valuations. c) 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. d) Section 409 requires rapid and current disclosure of financial information.

b) Section 401 requires detailed disclosures of inventory valuation methods and requires a retroactive adjustment of changes in inventory valuations.

Based on the CARE framework of separation of duties, which of the following duties can be performed by the same individual? a) handling cash receipts documents and post journal entries to the cash receipts journal b) approve the request of changing inventory costs and update inventory costs in master data c) prepare the check and sign and send the check d) approve new customers and prepare and send sales orders

b) approve the request of changing inventory costs and update inventory costs in master data

In the role-playing game, which of the followings was not a recipient of sales orders? a) customer b) general ledger c) shipping department d) B/AR/CR

b) general ledger

Which of the following control plans best addresses the control failure below: Normally, the warehouse delivers goods to the shipping department, accompanied by a completed picking ticket. After checking the goods against the completed picking ticket, the shipping department prepares four copies of the shipping notice, and one copy of which serves as the packing slip and sent to the carrier. Control failure: A recent audit discovered that a dishonest warehouse employee can prepare both completed picking tickets and shipping notices, thereby having goods shipped to his/her friends. a) Review open files of sales order document flow (Tickler file) b) Compare picking ticket with picked goods c) Independent shipping authorization d) Lockbox

c) Independent shipping authorization

In the role-playing game, which of the following databases was not updated when receiving the invoice from the vendor? a) Purchase Order Data/History b) General Ledger Master Data c) Inventory Master Data d) Accounts payable master data

c) Inventory Master Data

Which of the following XBRL tags is a customized tag? a) US-GAAP: Shareholdercontributionsforprofitsharingprojectsandunallocatedearnings b) US-GAAP: Minorityinterests c) PG: Commonstock d) US-GAAP: Totalassets

c) PG: Commonstock

The failure to record which transaction has no effect on the quantity of inventory? a) cash purchases of inventory b) sales returns received c) sales discounts allowed when customers take advantage of the credit terms d) purchases returned to vendors

c) sales discounts allowed when customers take advantage of the credit terms

The _____ principle ensures that within a company, accounting methods cannot be frequently changed.

consistency

In a cash receipts system without a lockbox, the mailroom receives two documents from the customer, and they are: _______ and ______ .

customer check and remittance advice? * then check is sent to the cashier for bank deposits, and the remittance advice is sent to the accounts receivable department (B/AR/CR) for journal entries and postings

Which of the following control plans ensures both update accuracy (UA) and update completeness (UC)? a) Review tickler files of open sales orders b) Compare shipment to sales order and picking ticket c) Procedures for rejected inputs d) Maintain customer master data

d) Maintain customer master data

Based on the SAP project, which of the following is not included in materials master data? a) valuation class b) delivering plant c) base unit of measure d) asset acquisition value

d) asset acquisition value

Under this control plan, authority to record a vendor invoice comes from the purchase order 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. a) turnaround documents b) tickler file of payments due c) independent authorization to make payment d) independent validation of vendor invoice

d) independent validation of vendor invoice

Which document is not one of the three documents compared when validating a vendor invoice (hint: the three-way-match)? a) purchase order b) receiving report c) vendor invoice d) payment request (voucher)

d) payment request(voucher)

Which entity would you expect to appear in the exception routines rather than in the normal routines of the order-to-cash (O2C) cycle? a) bank b) customer c) cashier d) receiving department

d) receiving department

This term represents the time between customer payment and the availability of good funds.

float

Holding other things equal, EOQ is ______ (increased, decreased, not changed) when the ordering cost per purchase order goes up

increased

____, ____, and _____ will be updated when the shipping department distributed four copies of the shipping notice to the related parties and shipped goods to the carrier.

inventory master data, general ledger master data, and sales order document flow

A manager with responsibilities and expertise for preparing internal reports to assist management decision making

managerial reporting officer

The material requirement planning (MRP) function converts 10 planned order to 10 purchase orders, and the purchase orders then sent to the vendor with a total of $100,000.The journal entry is __________.

no entry

The on-order stock is ______ (increased, decreased, not changed) when a company delivered goods to the customer.

not changed

Under a post-billing system, the accounts payable balance is ______ (overstated, understated, or not changed) when a company forgot to record a goods receipt from the vendor.

not changed

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.

open-item system

Assuming a perpetual inventory system, if a return request from the customer, Binks company, to the vendor, Qui-Gon company, is recorded as a credit memo on Binks' books. The inventory account on Binks' balance sheet of will be _______ (overstated, understated, correctly stated).

overstated

If a billing process is completed without a real shipment, revenues will be _______ (overstated, understated, correctly stated).

overstated

The accounts payable department sends out the ________ to the cashier to trigger the cash disbursement process.

payment request (voucher)

The _____ , ______, and _______ are updated when a purchase order is prepared.

purchase order data, purchase requisition data, and inventory master data

The _____ , ______, and _______ are updated when a receiving report is recorded.

purchase order data/history, inventory master data, and general ledger master data

A _____ is prepared by the receiving department and sent to the warehouse with goods.

receiving report(stock notice)

Before preparing the billing document, the B/AR/CR department receives two documents, and they are: _______ and _______ .

sales order & shipping notice

______, ______, and ______ will be updated when the B/AR/CR department sends the billing document to the customer

sales order document flow, accounts receivable master data, and general ledger master data