AIS: Exam 3

Which statement about our SUA disbursement procedures is correct?

Nancy processes the purchase order and does the receiving

The company has a bank overdraft on the operating account. What is most likely the problem that caused this overdraft?

No one at the company is managing cash inflows and outflows

T/F: Approved vouchers must be paid by check on the day of approval. Failure to do so represents a deficiency in internal controls, security of assets.

False

T/F: Process costing is done when unique items are produced and job costing is done when similar items are produced

False

T/F: Unlike most of the cycles we examined, in the inventory sub-cycle you have very few authorizations

False

T/F: Waren Sports employees are paid by direct deposit from the imprest payroll account.

False

T/F: Within the SUA packet we did a journal entry to transfer funds from the operating cash account to the payroll imprest account.

False

A company can use cloud computing to handle some of the AIS functions. What might be a reason why the company would consider cloud computing?

Hardware upgrades are expensive

IT is appropriately defined by:

Hardware, software, network, data, people

When transactions are posted to the ledgers, what does a check mark mean?

The amount has been posted to the appropriate ledger account

T/F: An AIS which must support job costing needs to be able to accumulate costs by processes

False

How do you calculate cost of goods sold under the periodic system?

Add net purchases to beginning inventory and then substract the ending inventory

Which of these businesses would you expect to not have dominant conversion cycles?

All of them would have dominant conversion cycles

What is true about routine expenditures?

Electronic transfers are common

Within the SUA, we had needed to keep track of an individuals earnings. What is the place where we kept this information?

Employee Earnings Subsidiary Ledger

All of these represent timing differences in bank reconciliation except: A) Checks that the bank has not yet paid B) Errors that we have not yet corrected but will correct C) Deposits that the bank has not yet recorded D) Errors that the bank has not yet corrected but will correct

Errors that we have not yet corrected but will correct

If you have unstructured problems, then you would probably want:

Expert systems

The major tasks performed by BIS are:

Input, transformation, output, and storage

Who should be doing the bank reconciliation?

Internal audit because it is an oversight function

In our SUA packet, we recorded merchandise purchases in the purchases journal. We recorded transactions in the purchases journal when:

Invoices were presented

Comparing process costing and job costing, the most obvious difference is:

Job costing must keep track of direct labor, direct material, and manufacturing overhead by job

A company that uses vouchers for processing merchandise purchases should link the voucher to what documents?

PO, Invoice, Receiving Report, Check

If you wanted to find the check number for the paycheck to Ray Kramer, where would you look?

Payroll Register or Payroll Journal

A bakery in Frontenac supplies all the bread for the restaurants that serve fried chicken dinners. Because this is the only product produced by the bakery, the bakery should probably use:

Process costing

The primary functions we should see showing up in the flowchart for PURCHASING of merchandise would be:

Purchasing , Receiving , and Accounts Payable (or Accounting).

Accounts payable enter the ledger system from the purchases journal. If you wanted to make sure the purchases journal was right. What might you look at?

Receiving reports and/or purchase orders related to the entries.

The individual who does the bank reconciliation attaches the bank statement, list of items clearing the bank, the cash receipts prelists for the month, the monthly bank reconciliation, and a memo describing the bank reconciliation together in a file because:

Support must be provided for all journal entries

The cash account that has the payroll checks is overdrawn. What most likely occurred?

The payroll account was not funded prior to processing the bi-weekly payroll

What is true about the operating cash accounts for most large corporations?

There are many bank accounts and an equal number of cash operating ledger accounts

What is true about most routine purchases?

They require oversight

Most of the work done in AIS is associated with

Transaction processing

T/F: The fundamental difference between a purchase order and a customer purchase order is who is doing the ordering

True

T/F: The over or under application of overhead may be a concern in either job order or process costing

True

T/F: The processing of a disbursement and the acceptance/authorization to purchase/use a good or service are separate processes for all goods/services except for payroll.

True

T/F: Today's usage of batch processing is generally restricted to transaction processing.

True

T/F: Usually we would expect a merchandising firm with accounts receivable to send statements to customers according to a schedule and at least monthly

True