CH. 5

True

A Business Warehouse system is a completely separate information system that extracts data from the ERP system.

True

Activity-based costing treats overhead costs as more direct than traditional cost-accounting methods have treated them.

True

An income statement shows a company's profit or loss in a period of time.

b. profit and loss

Another name for an income statement is a _________________ statement. a. credit c. sales b. profit and loss d. revenue

True

Another name for an income statement is a profit and loss statement.

intracompany transactions

Any business events that occur between companies and their subsidiaries are known as _____________________________________.

b. $1,500

Assume that a buyer calls a seller to order $3,000 worth of goods and her credit limit is $10,000. If the sellers accounts receivable for the customer is already $8,500, how much of the new order will be accepted? a. The entire amount c. No amount b. $1,500 only d. $10,000 only

True

ERP systems help in resolving conflicts in goals, standardizing basic processes, and controlling product costs.

b. document flow

Each transaction in SAP ERP gets its own unique number, which acts as an index to the appropriate database table entries. This is known as _______________________. a. document reference c. auditing codes b. document flow d. unique codes

b. Income Statement

Figure 1 is Fitter Snacker's _______________. a. Balance Sheet c. Credit Report b. Income Statement d. Document Flow

a. Balance Sheet

Figure 2 is Fitter Snacker's _________________________. a. Balance Sheet c. Credit Report b. Income Statement d. Document Flow

c. Document Flow

Figure 3 is an example of ____________________. a. Production Planning c. Document Flow b. MRP d. Configuration Settings

False

Having ERP will require a company to restrict the number of cost allocation bases.

d. $0.73

If Fitter Snacker's cost of making a case of bars is $209.82. There are 24 bars to a box and 12 boxes to a case. How much money does it cost Fitter Snacker to make each individual bar? a. $17.49 c. $8.74 b. $1.00 d. $0.73

True

If actual costs in the month equaled standard costs, no balance sheet or income statement adjustments would be needed. Actual costs never exactly equal expected costs, however, so adjustments are almost always needed. The differences between actual costs and standard costs are called cost variances.

c. $0.97

If the cost of manufacturing NRG-A bars is $0.72 per bar, how much does FS need to charge to make a profit of $0.25? a. $1.00 c. $0.97 b. $0.99 d. $1.25

True

In SAP ERP access to general ledger accounts is spread over many modules.

a. activity-based costing

In ______________________________, activities associated with overhead cost generation are identified and then records are kept on the costs and on the activities. a. activity-based costing c. run of the mill costing b. backoffice costing d. plant operation costing

True

In activity-based costing, overhead costs are assigned to products based on the manufacturing activities that gave rise to the costs.

True

In an ERP system, data does not flow from one module to another.

c. database reports

In an ERP system, the balance sheet and P&L statements are ______________________. a. generated yearly c. database reports b. not available d. modules

True

In an ERP system, the balance sheet and P&L statements are database reports.

True

In the SAP ERP system, input to the general ledger occurs simultaneously with the business transaction in the specific module. Many SAP ERP modules cause transaction data to be entered into the general ledger.

True

In the SAP ERP system, inputs to the general ledger occur simultaneously with input of business transactions to the various modules.

False

It is very easy to delete items in the ERP system.

True

Managerial accounting deals with determining the costs and profitability of the company's activities.

True

SAP ERP has sophisticated user administration tools that allow different levels of authorization management, to ensure that employees can perform only the transactions required for their jobs.

False

The SAP ERP system has a module called Accounting and Finance.

False

The Sarbanes-Oxley Act requires that financial statements filed with the SEC include a statement signed by the chief executive officer and chief financial officer, certifying that the financial statement complies with the SEC rules.

True

The U.S. Congress passed the Sarbanes-Oxley Act of 2002 in response to the fraud and abuse in the Enron collapse.

True

The cost of heating the plant would be considered part of manufacturing overhead.

True

The key feature of any ERP system is the ability to drill down from a report to the source documents (transactions) that created it.

a. direct labor cost

The key pieces of information for cost analysis is the direct material costs and the ______________________. a. direct labor cost c. driver cost b. overhead cost d. selling cost

d. closing the books

The process of transferring balances for temporary or nominal accounts, such as revenue, expense, gain, and loss, to the retained earnings account is called ________________________. a. cost accounting d. closing the books b. account closure e. statement wrap-up c. periodic closure

True

The term drill down refers to the ability to view the details behind a summary of information.

True

Tolerance groups make sure employees do not exceed their authority in financial transactions.

False

Using standard costs to accumulate manufacturing costs means that the company does not have to keep track of actual manufacturing costs.

c. Overhead costs

What are the manufacturing costs that include factory utilities, general factory labor such as custodians or security guards, factory managers' salaries, storage, insurance, and other manufacturing-related costs? a. Direct costs c. Overhead costs b. Plant costs d. Manmade costs

b. The data is in real-time.

What is the advantage to credit management in SAP ERP? a. Marketing and Sales get weekly reports. c. Payments are posted daily. b. The data is in real-time. d. There is no advantage.

a. COGM - cost of goods manufactured

What is the sum of direct materials, production overhead, and direct labor? a. COGM - cost of goods manufactured c. COGP - cost of goods produced b. COGS - cost of goods sold d. COGS - cost of goods shipped

False

When a company has an ERP system, it no longer needs a general ledger.

True

When a company has an ERP system, the general ledger is maintained by the ERP system.

Materials Management

When finished goods are transferred from the assembly line to the warehouse, an employee in the warehouse records the transaction using a terminal or a barcode scanner. Which SAP ERP module records this change?

b. Balance sheet

Which financial statement shows account balances such as, cash held, amounts owed to the company by customers, the cost of raw materials and finished goods inventory? a. Income statement c. Tolerance group b. Balance sheet d. Year end report

b. Accounts receivable

Which general ledger document tracks the amount of money that a customer owes for the goods received by the customer? a. Balance sheet c. Accounts payable b. Accounts receivable d. Income statement

financial statements

With a properly configured and managed ERP system, there are direct links between the company's ________________________________ and individual transactions that make up the statements, so that fraud and abuse can be detected more easily.

False

With an ERP system, the job of tracking all the data required for a financial report can be a monumental undertaking.