ACCT 3371 Exam 3

Which of the following purposes does a receiving report fulfill? (Check all that apply.)

- Document the quality of items received - Document the quantity received

Which of the following processes involve having customers send payments directly to the organization's bank? (Check all that apply.)

- FEDI - EFT - Electronic lockbox

Which of the following are outputs of the general ledger and reporting system? (Check all that apply.)

- Financial statements - Budgets - Managerial reports

Which of the following input controls can be used to ensure the objective of processing integrity? (Check all that apply.)

- Forms design - Completeness check - Turnaround documents

Which of the following are threats in the sales order entry process? (Check all that apply.)

- Incomplete or inaccurate orders - Stockouts - Loss of customers

Identify all the controls that mitigate the threat of mistakes when counting deliveries from suppliers. (Check all that apply.)

- Not informing receiving employees about the quantities ordered - Requiring receiving employees to sign the receiving report - Use of bar codes and RFID tags

Which controls are designed to minimize the risk of making duplicate payments? (Check all that apply.)

- Pay only from original copies of supplier invoices - Require a complete voucher package before issuing payment

Which documents are used to create a three-way match when approving the payment of a supplier invoice? (Check all that apply.)

- Purchase order - Receiving report - Supplier invoice

Identify all the controls that mitigate the threat of picking the wrong items or the wrong quantity of an item: (Check all that apply.)

- Reconciliation of picking lists to sales order details - Bar code and RFID technology

Identify all the controls that mitigate the threat of theft of inventory: (Check all that apply.)

- Restrict the ability to cancel sales - Periodic physical counts of inventory, and reconciliation to recorded quantities - Documentation of all inventory transfers - Bar code and RFID technology - Restriction of physical access to inventory

Identify all the controls that mitigate the threat of the theft of inventory. (Check all that apply.)

- Segregation of duties of inventory custody and receiving - Restriction of physical access to inventory - Documentation of all transfers of inventory

Which of the following are threats in the cash collections process? (Check all that apply.)

- Theft of cash - Cash flow problems

Which of the following techniques can be used to minimize system downtime?

- UPS - Preventive maintenance - RAID

Which of the following controls are designed to minimize the risk of inaccurate or invalid master data? (Check all that apply.)

- Utilize the processing integrity controls discussed in Chapter 13 - Use access controls to restrict which employees can access master data - Review all changes to the master data

Which of the following statements is true?

- Virtualization significantly reduces RTO for hardware problems. - Cloud computing reduces the risk that a single catastrophe from either a natural disaster or terrorist attack would result in significant downtime and loss of availability. - Backups still need to be made when using either virtualization or cloud computing.

To minimize the risk of the theft of cash, the person who makes cash disbursements should not also have the duties of: (Check all that apply.)

- approving supplier invoices. - reconciling the bank account.

To minimize the risk of the theft of cash, the person who handles customer payments should not also have the duties of (Check all that apply.)

- reconciling the bank account. - posting remittances to customer accounts. - creating or authorizing credit memos.

The external entity from whom an organization purchases inventory and raw materials is called a _____ . (Check all that apply.)

- supplier - vendor

Which person makes adjusting entries in the general ledger and reporting system?

Controller

Entries that are made to counteract the effects of errors found in the general ledger are called

Corrections

Which of the following controls could be used to mitigate the threat of uncollectible accounts?

Credit limits

Which document authorizes reducing the balance owed by a customer?

Credit memo

Which control ensures that the master inventory file contains an inventory item identified by the number 251184?

Validity check

Which of the following is designed primarily to improve the efficiency of financial reporting?

XBRL

A legal contract that defines responsibility for goods while they are in transit is called

a bill of lading.

A facility that is not only prewired for telephone and Internet access but also contains all the computing and office equipment the organization needs to perform its essential business activities is called

a hot site.

A batch total that is computed by adding up the invoice numbers in a set of sales invoices is called a

hash total.

Data processing integrity controls reduce the risk of ______.

inaccurate general ledger data

The purpose of employing data entry processing integrity controls is to mitigate the threat of

inaccurate updating of the general ledger

A turnaround document is an example of a(n)

input control.

Which of the following XBRL documents contains the actual data values for a company's net income for a particular year?

instance document

The number of orders shipped per warehouse worker each day is a metric that would most likely appear in which part of the balanced scorecard?

internal operations

Which of the following is an important part of the audit trail?

journal vouchers

The control procedure of requiring competitive bidding is primarily designed to mitigate the risk of

purchasing at inflated prices.

Which of the following procedures is designed to prevent the purchasing agent from receiving kickbacks?

receiving purchasing agents to disclose financial investments in potential suppliers

Which of the following measures the amount of data that might be potentially lost as a result of a system failure?

recovery point objective (RPO) The RPO measures the time between the last data backup and the occurrence of a problem.

The definition of an XBRL element, including such information as whether its normal account balance is a debit or a credit, is found in which of the following?

schema

The control procedure for separating the duties of the billing and shipping functions is designed to mitigate the threat of:

the failure to bill customers.

Which of the following matches is performed in evaluated receipt settlement (ERS)?

the purchase order with the receiving report

Which of the following is an example of the kind of batch total called a hash total?

the sum of the purchase order number field in a set of purchase orders

Restricting physical access to inventory is designed to minimize the threat of

theft of inventory.

Which of the following controls would prevent entry of a nonexistent customer number in a sales transaction?

validity check A validity check compares a customer number entered into a transaction record against the customer numbers that exist in the master file or database.

Cancelling all supporting documents when payment is made to a supplier is a control procedure designed to mitigate the threat of:

Duplicate payments

Which of the following is designed to facilitate understanding variances from budgets that are due to managerial actions from variances that result from unplanned changes in the level of production?

Flexible budgets

Which of the following controls is designed to mitigate the risk of purchasing goods of inferior quality?

Holding purchasing managers responsible for the costs associated with rework and scrap

Each night during the week an organization backs up just that day's transactions. This is referred to as making what kind of backup?

Incremental

Which of the following shows the implied causal linkages among the portions of the balanced scorecard?

Innovation and learning > Internal > Customer > Financial

Requiring the use of digital signatures on an electronic order by a customer is a control that is designed to reduce the risk of which threat?

Invalid orders

What is financial electronic data interchange (FEDI)?

It is the combination of EFT and EDI that enables both remittance data and funds transfer instructions to be included in one electronic package.

Which control would help reduce the threat of cash flow problems?

Lockbox arrangements

Which of the following inventory control methods is most likely to be used for a product which sales can be reliably forecast?

MRP

Which control procedure is designed to minimize the threat of posting errors to accounts receivable?

Mailing of monthly statements to customers

Which of the following threat(s) are data processing integrity controls designed to reduce? (Check all that apply.)

Mistakes in posting to accounts payable

To minimize the risk of theft of consumer remittances, the person who handles and deposits customer payments can also

None of these activities can be performed by the person who handles and deposits customer payments. (reconcile the bank statements, post adjustments to accounts receivable, authorize credit memos)

Which of the following controls is designed to reduce the risk of errors in counting inventory delivered by suppliers?

Not informing receiving employees about the expected quantities

Which of the following is true?

Setting up petty cash as an imprest fund violates segregation of duties.

Which of the following controls is designed to ensure that after updating the general ledger, assets have debit balances and liabilities have credit balances?

Sign check

Which document is no longer used to approve a supplier payment when a company is using ERS?

Supplier invoice

Separation of the check-writing and accounts payable functions is designed to mitigate the threat of:

Theft of cash

Which person makes original journal entries in the general ledger and reporting system about events such as dividend payments and payments to creditors?

Treasurer

Which of the following is used to verify that the total debits equal the total credits in the general ledger?

Trial balance

Which general revenue cycle threat does encryption address?

Unauthorized disclosure of sensitive information

Which controls are designed to reduce the risk of unauthorized disclosure of sensitive data about a company's purchases? (Check all that apply.)

- Access controls - Encryption

Which of the following control procedures are most effective to reduce the threat of paying for services (e.g., painting, janitorial, landscape, etc.) that were not performed? (Check all that apply.)

- Budgetary controls - Audits

Which of the following is helpful in reducing the risk of customers failing to pay for their purchases? (Check all that apply.)

- Credit limits - Accounts receivable aging report

Identify all the controls that mitigate the threat of shipping errors: (Check all that apply.)

- Data entry edit controls - Bar code and RFID technology

Assume that the XYZ Company wants to create batch totals for a transaction file that contains payments to suppliers. Which of the following fields could be used to create a financial total? (Check all that apply.)

- Discount for prompt payment - Check amount - Gross amount due

Which of the following is an effective data entry control to ensure that overtime hours should be zero for someone who has not worked the maximum number of regular hours in a pay period?

A reasonableness check

An adjusting entry that is made to reflect events that have occurred but for which cash has not yet been received or disbursed is called a(n)

Accrual

Which control could be used to mitigate the threat of fraudulent financial reporting?

Audit

Which of the following controls is the best way to reduce the threat of loss or destruction of revenue cycle data?

Backup and disaster recovery procedures

A management report that measures four dimensions of performance: financial, internal operations, innovation and learning, and customer perspectives of the organization is known as

Balanced Scorecard

What is the best control procedure to prevent paying the same invoice twice?

Cancel all supporting documents when the check is signed.

When Jo, a sales associate, enters an account number, which of the following controls would allow the system to retrieve and display the account name so that Jo could verify that the correct account number had been entered?

Closed-loop verification

Which of the following displays real-time or near real-time information so that managers can take corrective action on a timely basis?

Dashboards

Which document is used to reduce the balance owed to a supplier?

Debit memo

An adjusting entry that is made to reflect the exchange of cash prior to performance of the related business activity is called a(n)

Deferral

Which of the following controls could be used to mitigate the threat of unauthorized disclosure of sensitive information in the expenditure cycle?

Encryption

An adjusting entry that is made to record a portion of expenses that are expected to occur over multiple time periods is called a(n)

Estimate

Which of the following techniques is the most efficient way to process customer payments and update accounts receivable?

FEDI FEDI integrates EFT, for processing customer payments, with EDI, for processing related remittance data to update accounts receivable.

Sending the receiving report to the inventory control department first, before it is then sent on to accounts payable, is a control procedure designed to minimize the risks of which threats?

Paying for items not received

Which of the following is a threat to the shipping process?

Picking the wrong items or the wrong quantity

Which document is sent to a supplier when an organization wants to buy something?

Purchase order

Which of the following specifies when to reorder supplies and inventory?

Reorder point

Which of the following controls could be used to mitigate the threat of accepting unordered items?

Requiring existence of approved purchase order prior to accepting any delivery

Which of the following is designed to help evaluate performance by focusing only on what a specific individual or department controls?

Responsibility accounting

Which control could be used to mitigate the threat of inaccurate or invalid general ledger data?

Review of all changes to general ledger data

Which of the following is used to change a customer's accounts receivable balance?

Sales invoice

Which document is used to record the items and quantities ordered by a customer?

Sales order

The threat of inaccurate inventory records can be mitigated by which of the following controls? a. Bar coding or RFID tags b. Review of purchase orders c. Verification of invoice accuracy d. Supplier audits e. None of the above.

a. Bar coding or RFID tags

A customer forgets to include her account number on her check, and the accounts receivable clerk credited her payment to a different customer with the same last name. Which control could have been used to most effectively to prevent this error? a. Closed-loop verification b. Duplicate values check. c. Reasonableness test. d. Reconciliation of a batch control total.

a. Closed-loop verification

Which element of the balanced scorecard would be represented by the return on equity? a. Financial b. Internal operations c. Innovation and learning d. Customer perspectives of the organization e. Not represented in the balanced scorecard

a. Financial

A general threat throughout the revenue cycle includes: a. Loss or destruction of data b. Invalid orders c. Theft of inventory d. All of the above e. None of the above

a. Loss or destruction of data

Which of the following maintains two copies of a database in two separate data centers at all times and updating both copies in real-time as each transaction occurs. a. Real-time mirroring b. Full backups c. Incremental backups d. Archiving

a. Real-time mirroring

What is a method that companies use to minimize the risk of inferior quality products? a. Tracking and monitoring product quality by supplier. b. Using encryption techniques c. Providing adequate storage d. All of the above.

a. Tracking and monitoring product quality by supplier.

Which of the following is a threat to the Sales Order Entry Processing activity of the Revenue Cycle? a. Uncollectible accounts. b. Failure to bill. c. Billing errors. d. Theft of inventory.

a. Uncollectible accounts.

The control known as closed loop verification is associated with: a. accuracy of updating customer accounts. b. preventing the theft of cash. c. encryption controls. d. separation of billing and shipping functions.

a. accuracy of updating customer accounts.

The open invoice method involves which of the following activities? a. customers pay from a balance on a monthly statement. b. remittances are applied against a total account balance. c. customers pay specific invoices. d. None of the above.

a. customers pay from a balance on a monthly statement.

The balanced scorecard a. focuses on activities which most directly impact customer perceptions. b. focuses on activities which compose the accounting cycle. c. focuses on activities which form the basis of adjusting entries. d. focuses on activities which form manager satisfaction. e. None of the above.

a. focuses on activities which most directly impact customer perceptions.

The least expensive and least effective option for replacing computer equipment lost in a disaster is: a. leasing a cold site. b. real-time mirroring c. creating a hot site. d. All of the above are ineffective options in disaster recovery.

a. leasing a cold site.

A university course enrollment system allows students to manage their classes online. If students attempt to add more than 21 hours per semester an error message is displayed. This is an example of a a. reasonableness test. b. field check. c. validity check. d. limit check.

a. reasonableness test.

The major cost driver in the purchasing function is: a. the number of purchase orders processed b. the price of the items purchased c. the reputation of the supplier d. none of the above.

a. the number of purchase orders processed

The following are the three basic financial statements: 1.Balance sheet 2.Income statement 3.Statement of cash flows The correct order in preparing these financial statements is: a.2, 1, 3 b.1, 2, 3 c. 1, 3, 2 d.2, 3, 1 e.3, 1, 2

a.2, 1, 3

An adjusting journal entry to record interest revenue that has been earned but not yet received is an example of which of the following?

accrual

Which of the following expenditure cycle activities can be eliminated through the use of IT or reengineering?

approving vendor invoices

Information that needs to be stored securely for 10 years or more would most likely be stored in which type of file?

archive

A useful report for management to control for the threat of uncollectible accounts is: a. Customer list b. Accounts receivable aging report c. Sales order report d. Inventory report

b. Accounts receivable aging report

Which of the following backup procedures copies all changes made since the last full backup? a. Incremental backup b. Differential backup c. Archive backup d. None of the above.

b. Differential backup

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. Do not inform receiving employees about quantity ordered.

Which of the following is not an objective of a disaster recovery plan? a. Minimize the extent of the disruption, damage or loss. b. Establish a permanent alternative means of processing information. c. Resume normal operations as soon as possible. d. Train employees for emergency operations.

b. Establish a permanent alternative means of processing information.

Ordering unnecessary items can result from: a. Competitive bidding. b. Inaccurate perpetual inventory records. c. Require receiving employees to sign the receiving report. d. None of the above

b. Inaccurate perpetual inventory records.

Which of the following balanced scorecard dimensions provides measures on how efficiently and effectively the organization is performing key business processes? a. Financial. b. Internal operations. c. Innovation and learning. d. Customer.

b. Internal operations.

Which of the following controls can minimize the threat of poorly designed reports and graphs? 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.

b. Responsibility accounting.

Which of the following is NOT a control for mitigating the risk of posting errors in accounts receivable? a. Data entry controls. b. Set proper credit limits. c. Reconciliation of batch totals. d. Mailing monthly statements to customers.

b. Set proper credit limits.

A report that lists the balances for all general ledger accounts is called: a. Balance Sheet b. Trial Balance c. Audit Trail d. Journal entry control report

b. Trial Balance

Which of the following does NOT make bar graphs easier to read? (Recall Ch. 7) a. Utilizing titles that summarize the basic message b. Utilizing 3-D bars c. Utilizing 2-D bars d. Using differing shades of gray or colors to represent different variables

b. Utilizing 3-D bars

When updating the general ledger, sales, purchases, and production are examples of ___________ entries, and issuance or retirement of debt and the purchase or sale of investment securities are examples of ___________ entries. a. adjusting; controller originated b. accounting subsystem; treasurer originated c. adjusting; special journal d. controller generated; special journal

b. accounting subsystem; treasurer originated

The _____ posts the adjusting journal entries after the trial balance has been prepared. a. finance department b. controller's office c. treasurer's office d. COO

b. controller's office

Which of the following is least likely to be a major criterion in vendor selection? a. prices of goods b. credit rating of the vendor c. quality of goods d. ability to deliver on time

b. credit rating of the vendor

An accountant received the following error message while making an adjusting entry to the general ledger: "Your journal entry must be a numeric value. Please reenter." This is an example of a a. validity check. b. field check. c. zero-balance check. d. completeness test.

b. field check.

The third basic activity in the accounting system which produces financial statements is: a. post adjusting entries b. prepare financial statements c. update general ledger d. produce managerial reports

b. prepare financial statements

An effective method of reducing the risk of inventory theft is a. an annual inventory count. b. proper segregation of duties. c. requiring the employee who maintains custody of inventory to also record inventory transactions. d. All of the above. e. None of the above.

b. proper segregation of duties.

The document used to request that an item be ordered is the: a. purchase order b. purchase requisition c. purchase advice d. purchase auction

b. purchase requisition

The ________ specifies the point at which inventory is needed. a. company inventory policies b. reorder point c. economic order quantity d. stockout point

b. reorder point

Preparing performance reports that contain data only about items that a specific organizational unit controls is an example of which of the following? a. flexible budget system b. responsibility accounting system c. closing the books d. management by exception

b. responsibility accounting system

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. sales order entry process b. shipping function c. cash collection activity d. cash payments activity

b. shipping function

The power of XBRL lies in the information provided by its: a. edit checks b. tags c. data marks d. none of the above

b. tags

The billing activity part of the revenue cycle includes the following: a. shipping b. updating accounts receivable c. making bank deposits d. approving customer credit

b. updating accounts receivable

A shop generates 3 quarters of its revenue from orders taken over the Internet. The revenue clearing account is debited by the total of cash and credit receipts and credited by the total of storefront and Internet sales. This is an example of a a. data integrity test. b. zero-balance test. c. trial balance audit. d. cross-footing balance test.

b. zero-balance test.

Which of the following revenue cycle activities can potentially be eliminated by technology?

billing The use of integrated ERP systems makes printing invoices superfluous because both the seller and customer already know all the information included in the invoice. Some large manufacturers have already moved to invoiceless systems with their major suppliers.

The control procedure for restricting access to pricing master data is designed to mitigate the threat of:

billing errors.

Which of the following controls checks the accuracy of input data by using it to retrieve and display other related information? a. Prompting b. Validity check c. Closed-loop verification d. All of the above.

c. Closed-loop verification

The applicable control procedure for the threat of incomplete or inaccurate customer orders is: a. Customer relationship management (CRM) b. Segregation of duties c. Data entry edit controls d. Reconciliation of sales order with the picking ticket

c. Data entry edit controls

Which inventory system attempts to minimize inventory costs by only purchasing goods required for actual sales orders? a. Material requirements planning (MRP) b. Economic order quantity (EOQ) c. Just-in-time (JIT) d. Reorder point

c. Just-in-time (JIT)

The two basic methods to maintain accounts receivable are: a. Real-time and open-invoice b. Real-time and balance-forward c. Open-invoice and balance-forward d. None of the above

c. Open-invoice and balance-forward

The act of tracing any transaction from its original source document (whether paper or electronic) to the journal entry that updated the general ledger and to any report or other document using that data: a. Provides a means to verify that all transactions are recorded correctly b. Provides a means to verify that all transactions were authorized c. Provides a means to verify that all authorized transactions were recorded correctly d. All of the above

c. Provides a means to verify that all authorized transactions were recorded correctly

What is the most effective technique used to minimize the risk of an inaccurate inventory counts? a. Quick visual comparison of amounts received and those indicated on the packing slip b. Using the Economic Order Quantity model c. The use of a bar-coding or radio frequency identification tag (RFID) system d. The use of just-in-time (JIT) accounting systems.

c. The use of a bar-coding or radio frequency identification tag (RFID) system

Disaster recovery and testing plans should be done: a. only when a disaster seems imminent. b. only immediately after disaster recovery is designed. c. at least annually. d. only if determined to be necessary.

c. at least annually.

A corporation provides free coffee to employees. A local coffee shop delivers coffee packages, sugar, creamer, and filters each week. Every month, the coffee shop sends the corporation invoice. This arrangement is best described as a a. set purchase order. b. fixed purchase order. c. blanket purchase order. d. standard purchase order.

c. blanket purchase order.

For good internal control over customer remittances, the mailroom clerk should separate the checks from the remittance advices and send the customer payments to which department? a. billing b. accounts receivable c. cashier d. sales

c. cashier

The practice of allowing kickbacks: a. improves the position of the company. b. results in higher quality purchases. c. impairs the objectivity of the purchaser. d. provides quantity discounts.

c. impairs the objectivity of the purchaser.

The risk of receiving unordered goods is prevented most effectively by a. surprise audits. b. recalculation of invoice prices. c. instruct the receiving department to accept deliveries only those goods where there is an approved copy of the purchase order. d. All of the above.

c. instruct the receiving department to accept deliveries only those goods where there is an approved copy of the purchase order.

Aging of accounts receivable is based on the: a. sales order date b. picking ticket date c. invoice date d. bill of lading date

c. invoice date

A credit memo a. is issued by the customer. b. is issued by the cashier. c. is issued by the credit manager. d. increases accounts receivable.

c. is issued by the credit manager.

Data entry controls do NOT include a. field checks. b. sign checks. c. parity checks. d. range checks.

c. parity checks.

A receiving report is typically not used for: a. low cost supply items b. items ordered on blanket purchase orders c. receipt of services d. reoccurring items

c. receipt of services

For good internal control, who should sign checks?

cashier

The _____, who reports to the treasurer, is responsible for paying suppliers.

cashier

Which activity is part of the sales order entry process?

checking customer credit Checking customer credit and inventory availability are two key parts of the sales order entry process.

The control that is used to match account numbers with account descriptions, to ensure that the correct general ledger account is being accessed is called

closed-loop verification.

Which disaster recovery strategy involves contracting for use of a physical site to which all necessary computing equipment will be delivered within 24 to 36 hours?

cold site

From where do adjusting entries usually come?

controller

For good internal control, who should approve credit memos?

credit manager

Which of the following provide useful information for evaluating current credit policies and for deciding whether to increase the credit limit for specific customers? a. Cash budget b. Profitability analysis reports c. Sales analysis reports d. Accounts receivable aging schedule e. None of the above.

d. Accounts receivable aging schedule

Which of the following controls best addresses the threat of inaccurate adjusting entries? a. Spreadsheet error protection controls b. Audit trail creation and review c. Processing integrity controls. d. All of above.

d. All of above.

The applicable control for theft of cash is: a. Lockboxes b. Segregation of duties c. Use of cash registers d. All of the above

d. All of the above

Steps to reduce the risk of inventory theft include: a. inventory is kept in a secure location, with limited physical access. b. all inventory transfers within the company are documented. c. inventory is released only upon approved sales orders. d. All of the above.

d. All of the above.

The credit approval process involves which of the following? a. Establishing a credit limit b. Investigating the credit history of the customer c. Verifying the customer order does not exceed an authorized limit d. All of the above.

d. All of the above.

Threats to system availability include: a. hardware and software failures. b. natural disasters. c. human error. d. All of the above.

d. All of the above.

To minimize the risk of an unscrupulous manager that can conceal theft of assets or poor performance by altering information in the general ledger. Which of the following statements represents and appropriate control? a. Employ read-only privileges to portions of the system necessary to perform assigned duties. b. Employ an access control matrix designed to limit the functions that can be performed by users. c. Review all changes made to the general ledger data. d. All of the above.

d. All of the above.

The threat of loss or alteration of financial data can be minimized by: a. encryption. b. access controls. c. Audit trail creation and review d. Answer a and Answer b

d. Answer a and Answer b

Identify the year the SEC will require American companies to switch from U.S.-based GAAP to IFRS as the basis for preparing financial statements. a. 2026 b. 2028 c. 2030 d. At this point it is unclear when the SEC will require American companies to implement IFRS

d. At this point it is unclear when the SEC will require American companies to implement IFRS

The problem(s) with static budgets include the following: a. they establish one set of budgetary figures, regardless of the actual output level. b. they may not be perceived as fair or accurate by production managers. c. They are not compatible with a balanced scorecard. d. Both answers a and b.

d. Both answers a and b.

Identify the department below that should not be able to submit a purchase requisition. a. Marketing b. Production c. Inventory Control d. None of the above

d. None of the above

The following lists the quantity and description of each item included in the shipment: a. Picking ticket b. Bill of lading c. Sales order d. Packing slip

d. Packing slip

Which of the following is NOT a threat associated with billing and accounts receivable? a. Failure to bill customers b. An error in billing c. Posting errors in updating accounts receivable d. Theft of cash

d. Theft of cash

The integrated database underlying an ERP system results in which of the following general threats to the revenue cycle? a. inaccurate or invalid master data b. unauthorized disclosure of sensitive information c. loss or destruction of data d. all of the above

d. all of the above

A cold site is an appropriate strategy for disaster recovery for organizations that are willing to tolerate operating for several ________ without their ERP system and who are also willing to reenter or even lose several __________ worth of transactions.

days; days

Which document is used to record adjustments to accounts payable based on the return of unacceptable inventory to the supplier?

debit memo

Which of the following provides detailed procedures to resolve the problems resulting from a flash flood that completely destroys a company's data center?

disaster recovery plan (DRP) A DRP focuses on restoring an organization's IT functionality.

Operational data is needed to monitor performance and to perform the following recurring tasks: a. Respond to customer inquiries about account balances and order status b. Select methods for delivering merchandise c. Determine inventory availability d. B and C e. All of the above

e. All of the above

Adjusting entries include each of the following: a. accruals. b. deferrals. c. estimates. d. revaluations. e. All of the above.

e. All of the above.

What are the typical expenditure cycle functions? a. Verify the accuracy of vendor invoices b. Select the appropriate vendors from whom to order c. Decide if appropriate discounts have been taken d. Monitor cash flow needed to pay obligations e. All of the above.

e. All of the above.

What control procedures reduce the risk of paying the same invoice twice? a. Invoices are approved for payment only when accompanied by a complete voucher packet. b. Only the original invoice copy should be paid. c. Paid invoices should be marked "paid". d. Payment should never be made on an invoice copy. e. All of the above.

e. All of the above.

Online processing data entry controls include: a. prompting. b. closed loop verification. c. trailer record. d. echo check. e. Answers 1 and 2 only.

e. Answers 1 and 2 only.

Which of the following techniques assist with meeting general ledger control objectives? a. Using pre-numbered journal entries b. The use of validity checks c. Restricting access to general ledger programs d. All of the above. e. None of the above.

e. None of the above.

Which data entry application control would detect and prevent entry of alphabetic characters as the price of an inventory item?

field check Field checks test whether data are numeric or alphabetic.

The phrase "close the books" is associated with producing ______.

financial statements

Which of the following provides a means to both improve the efficiency of processing customer payments and also enhance control over those payments?

lockboxes The use of lockboxes eliminates the delays involved in processing customer payments and then depositing them. It also improves control because customer payments are not directly handled by any employees.

An approach to inventory management that seeks to reduce required inventory levels by improving the accuracy of forecasting techniques to better schedule purchases to satisfy production needs is called

materials requirements planning.

Which method is most likely used when a company offers customers discounts for prompt payment?

open-invoice method The open-invoice method provides a means to offer discounts because it facilitates aging each invoice to verify whether a discount should be granted.

Data entry processing integrity controls such as field checks, completeness tests, and closed-loop verification are not needed for journal entries made by

other accounting subsystems.

Which document often accompanies merchandise shipped to a customer?

packing slip This document specifies what is being shipped.

Which of the following is a control that can be used to verify the accuracy of information transmitted over a network?

parity bit A parity bit is a communications control that counts the number of bits in order to verify the integrity of data sent and received.

Which document is used to authorize the release of merchandise from the inventory control [warehouse] to shipping?

picking ticket A picking ticket is generated by sales order entry to authorize removal of inventory to be shipped to the customer.

Which method would provide the greatest efficiency improvements for the purchase of noninventory items such as miscellaneous office supplies?

procurement cards

Which document is used to establish a contract for the purchase of goods or services from a supplier?

purchase order