Chapter 12 AIS, Accounting Information Systems Chapter 13, Chapter 14 AIS Production Cycle, Chapter 15 AIS, Chapter 16 AIS

Special software packages called ________ can help an organization manage customer service. A) EDI systems B) CRM systems C) POS systems D) VMI systems

B) CRM systems

________ are associated with testing to ensure that products meet quality standards. A) External failure costs B) Inspection costs C) Internal failure costs D) Prevention costs

B) Inspection costs

EFT payments are generally performed by A) the treasurer. B) a cashier. C) an accounts payable clerk. D) a credit manager.

B) a cashier

Adjusting entries that are made to counteract the effects of errors found in the general ledger are called A) accruals. B) corrections. C) deferrals. D) estimates.

B) corrections

Each specific data item in an XBRL document is called a(n) A) taxonomy. B) element. C) instance. D) schema.

B) element

Identify the firm below where employees' knowledge is likely to be more valuable than the value of a company's tangible assets. A) international airline B) law firm C) automobile manufacturer D) railroad

B) law firm

The basic document created in the billing process is call a ________. A) bill of lading B) sales invoice C) sales order D) packing list

B) sales invoice

A picking ticket is generated by the A) shipping process. B) sales order entry process. C) packing process. D) billing process.

B) sales order entry process

________ is not a basic activity of the revenue cycle. A) Sales order entry B) Shipping C) Receiving D) Billing

C) Receiving

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) set purchase order. B) fixed purchase order. C) blanket purchase order. D) standard purchase order.

C) blanket purchase order

As each payroll transaction is processed, the system should also A) allocate labor costs to appropriate general ledger accounts B) use cumulative totals generated from a payroll to create a summary journal entry to be posted to the general ledger C) both A and B above D) The HRM system should not perform either activity A or B.

C) both A and B aboce

Identify the cost below most likely to be classified as manufacturing overhead. A) production workers' pay B) raw materials used in production C) insurance D) none of the above

C) insurance

The ________ is the production cycle document that specifies the quantity of each product to be produced and when production should begin. A) receiving report B) bill of lading C) master production schedule D) operations list

C) master production schedule

The management at Barks-a-Million is considering a new inventory control system. The current system is inadequate because it frequently causes stockouts that interrupt production and lead to excess stock of other materials — resulting in markdowns and high carrying costs. The new system, which will focus on forecasting demand for Sad Clown's products, will likely employ A) a just-in-time inventory system. B) the economic order quantity. C) materials requirements planning. D) a reorder point.

C) materials requirements planning

The ________ authorizes the transfer of raw materials from the storeroom to the production floor. A) bill of materials B) production order C) materials requisition D) move ticket

C) materials requisition

Experts estimate that, on average, the costs associated with replacing an employee are about ________ the employee's annual salary. A) one-quarter of B) one-half of C) one and one-half times D) twice

C) one and one-half times

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. B) picking tickets. C) picking ticket and sales order. D) sales order and bill of lading.

C) picking ticket and sales order

Because it is the most fungible of all assets, the management of cash has always been the most difficult of all control issues. The most important of cash controls is A) minimization of cash handling. B) lockbox arrangements. C) segregation of duties. D) frequent reconciliation of records.

C) segregation of duties

Which of the following is a control that addresses the threat of unauthorized changes to the payroll master file? A) field checks B) batch totals C) segregation of duties D) sound hiring procedures

C) segregation of duties

The production cycle differs from the revenue and expenditure cycles for all the following reasons except A) cost accounting is involved in all activities. B) not all organizations have a production cycle. C) there are no direct external data sources or destinations. D) very little technology exists to make activities more efficient.

C) there are no direct external data sources or destinations

Why would a firm perform ABC cost analysis? A) to identify the best inventory supplier B) to reconcile accounts payable C) to prioritize physical inventory counts D) to verify production quality

C) to prioritize physical inventory counts

An effective way an organization can eliminate paper paychecks while maintaining adequate accounting records is to A) pay in cash only. B) pay with money orders. C) use direct deposit. D) use Electronic Funds Transfer.

C) use direct deposit

The VP of Manufacturing at Roshanak Incorporated wants to buy a new die cast machine for production. The die cast machine is expected to cost around $1,000,000. Which document will most likely be used to solicit bids from suppliers? A) RFP B) eVoice C) RFJ D) RFB

A) RFP

A listing of journal vouchers by numerical sequence, account number, or date is an example of A) a general ledger control report. B) a budget report. C) a batch to be processed. D) responsibility accounting.

A) a general ledger control report

Recording interest earned on an investment is an example of which type of adjusting journal entry? A) accrual entry B) deferral entry C) revaluation entry D) correcting entry

A) accural entry

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) batch-related

When a customer pays off the balance on an invoice, the payment is credited to the ________ file. A) customer master B) sales transaction C) cash receipts master D) All of the above are correct

A) customer master

The first major business activity in the expenditure cycle is A) ordering inventory, supplies, or services. B) a customer sale. C) shipping goods to customers. D) receiving goods from vendors.

A) ordering inventory, supplies, or services

The document a customer returns with their payment and that identifies the source and the amount of the payment is called a A) remittance advice. B) remittance list. C) credit memorandum. D) debit memorandum.

A) remittance advice

Performance reports for sales departments should compare actual revenue versus budgeted A) revenue. B) cost. C) return on investment. D) profit.

A) revenue

Which of the following are appropriate controls for the general ledger and reporting system? A) using well-designed documents and records B) online data entry with the use of appropriate edit checks C) prenumbering documents and accounting for the sequence numbers D) All of the above are appropriate.

D) All of the above are appropriate

A disbursement voucher contains A) a list of outstanding invoices. B) the net payment amount after deducting applicable discounts and allowances. C) the general ledger accounts to be debited. D) All of the above are correct

D) All of the above are correct

The threat of loss of data exposes the company to A) the loss of assets. B) ineffective decision making. C) inefficient manufacturing. D) All of the above are correct

D) All of the above are correct

Which department should have the sole ability to provide information to the AIS about hiring, terminations, and pay rate changes? A) payroll B) timekeeping C) production D) HRM

D) HRM

Which of the following is not a product design objective? A) Design a product that meets customer requirements. B) Design a quality product. C) Minimize production costs. D) Make the design easy to track for cost accounting purposes

D) Make the design easy to track for cost accounting purposes

What is the primary drawback to using a volume-driven base, such as direct labor or machine hours, to apply overhead to products in a traditional cost accounting system? A) The cost accountant may not fully understand how to track direct labor or machine hours. B) It is difficult for an AIS to incorporate such a measurement into its system. C) It is difficult for an ERP to incorporate such a measurement into its integrated system. D) Many overhead costs are incorrectly allocated to products since they do not vary with production volume.

D) Many overhead costs are incorrectly allocated to products since they do not vary with production volume

The best solution for maintaining accurate automated perpetual inventory system is to use A) closed-loop verification when inventory is received from vendors and recorded. B) point of sale devices integrated with inventory records. C) periodic physical counts to reconcile with perpetual inventory records. D) RFID tags.

D) RFID tags

Which of the following user groups generally receive information produced by the general ledger and reporting system? A) internal users B) external users C) inquiry processing by internal or external users D) all of the above

D) all of the above

When using electronic documents, ________ increase(s) the accuracy of data entry. A) access controls B) separation of duties C) general controls D) application controls

D) application controls

Which of the following are used to document entries made to update the general ledger? A) general journal B) subsidiary journal C) subsidiary ledgers D) journal vouchers

D) journal vouchers

Financial statements are prepared in a certain sequence. Which statement is prepared last? A) the adjusted trial balance B) the income statement C) the balance sheet D) the statement of cash flows

D) the statement of cash flows

The average annual management salary at Iyov Management is $80,000. If the average turnover rate for employees is ten per year, what is the approximate average annual cost of turnover? A) $80,000 B) $400,000 C) $800,000 D) $1,200,000

D) $1,200,000

The receiving clerk at Wattana Technologies examines incoming shipments and checks their purchase order numbers. A receiving report is then sent to accounts payable, where it is reconciled with the relevant purchase orders and invoices and payment is authorized. Which of the following would correct control weaknesses related to the clerk's activities? A) Controls are adequate under the current system. B) Vendor invoices should be approved for payment by the purchasing manager. C) Purchase orders and receiving reports should be reconciled by the purchasing manager. D) Vendor invoices should be approved for payment by the shipping clerk after the purchase order and receiving report are reconciled.

A) Controls are adequate under the current system

Which control would best prevent payments made to fictitious vendors? A) Allow payments only to approved vendors. B) Restrict access to any payment or approval documents. C) Have an independent bank reconciliation. D) Make sure all documents are in order before approving payments.

A) Allow payments only to approved vendors

Which of the following statements is not true about an XBRL instance document? A) An instance document includes instruction code as to how the document should be physically arranged and displayed. B) An instance document contains facts about specific financial statement line items. C) An instance document uses separate tags for each specific element. D) An instance document can be used to tag financial and nonfinancial elements.

A) An instance document includes instruction code as to how the document should be physically arranged and displayed

Anong Mali is the purchasing manager at Wattana Technologies. She has responsibility for reviewing and authorizing purchase orders. Receiving reports are prepared by shipping and receiving based on the relevant purchase order(s). Purchase orders, receiving reports, and vendor invoices are reconciled by accounts payable, which authorizes payment. Which of the following would correct control weaknesses related to these activities? A) Controls are adequate under the current system. B) Accounts payable should authorize purchase orders. C) Receiving reports should be reviewed and corrected by the purchasing manager. D) Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct.

A) Controls are adequate under the current system

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) validity check. C) limit check. D) closed-loop verification.

A) reasonableness test

Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations? A) receiving and accepting inventory not ordered B) theft of inventory by receiving department employees C) update of wrong inventory items due to data entry error D) order for an excessive quantity of inventory

A) receiving and accepting inventory not ordered

Materials requirements planning (MRP) A) reduces the uncertainty about when materials are needed, thereby reducing the need to carry large levels of inventory. B) is able to compute exactly the cost of purchasing by taking into account all costs associated with inventory carrying. C) requires vendors to deliver inventory to the production site exactly when needed and in the correct quantities. D) None of the above is correct.

A) reduces the uncertainty about when materials are needed, thereby reducing the need to carry large levels of inventory

Budgets used for internal planning purposes and performance evaluation should be developed on the basis of A) responsibility accounting. B) generally accepted accounting principles. C) financial accounting standards. D) managerial accounting standards.

A) responsibility accounting

The sales department administrative assistant has been assigning phone order sales to her brother-in-law, a company sales person. Company policy is to pay commissions only on orders directly received by sales people, not on orders received over the phone. The resulting fraudulent commission payments might best have been prevented by requiring that A) sales commission statements be supported by sales order forms signed by the customer and approved by the sales manager. B) sales order forms be prenumbered and accounted for by the sales department manager. C) sales orders and commission statements be approved by the accounting department. D) disbursement vouchers for commission payments be reviewed by the internal audit department and compared to sales commission statements and sales orders.

A) sales commission statements be supported by sales order forms signed by the customer and approved by the sales manager

A document typically encountered in the revenue cycle that is both an output document and a source document is the A) sales invoice. B) customer purchase order. C) sales order. D) packing slip.

A) sales invoice

The activities involved in soliciting and processing customer orders within the revenue cycle are known as the A) sales order entry process. B) shipping order process. C) revenue process. D) marketing process.

A) sales order entry process

The employer pays a portion of some payroll taxes and employee benefits. Both the employee and employer pay which benefit or tax listed below? A) social security taxes B) federal income taxes C) state income taxes D) none of the above

A) social secutity taxes

Regularly reviewing an accounts receivable aging report can help management do what? A) spot firms who are falling behind in their payments B) identify customers who have not purchased anything lately C) improve the speed which customers make payments D) determine whether the firm's pricing policy is effective

A) spot firms who are falling behind in their payments

Knowledge management systems (KMS) permit organizations to A) store employee solutions to specific problems in a shared database. B) learn from individuals external to the organization. C) perform background checks on potential employees. D) gain competitive business intelligence on competitors.

A) store employee solutions to specific problems in a shared database

All of the following are controls that should be implemented in a payroll process, except A) supervisors distribute paychecks since they should know all employees in their department. B) someone independent of the payroll process should reconcile the payroll bank account. C) sequential numbering of paychecks and accounting for the numbers. D) restrict access to blank payroll checks and documents.

A) supervisors distribute paychecks since they should know all employees in their department

A growing number of companies require some of their upper level executives to spend time performing job duties of rank-and-file employees. When the CEO of Loews Hotels assumed the role of bellman, he discovered A) that the company's polyester uniform caused him to sweat a great deal. B) evidence of fraud in several hotel locations. C) instances where company employees fell asleep on the job. D) situations where employees were not treating customers properly.

A) that the company's polyester uniform caused him to sweat a great deal

The legitimacy of customer orders is established by ________ in paper-based customer orders. A) the customer's signature B) the customer's pin number C) the customer's verbal authorization D) prior experience with the customer

A) the customer's signature

For strongest segregation of duties, the credit manager should never report to A) the marketing department. B) the accounting department. C) the credit department. D) the IT department.

A) the marketing department

What does the first term in the throughput formula, productive capacity, represent? A) the maximum number of units that can be produced given current technology B) the percentage of total production time used to manufacture a product C) the percentage of "good" units produced given current technology D) the percentage of "bad" units produced given current technology

A) the maximum number of units that can be produced given current technology

A master production schedule is used to develop detailed A) timetables of daily production and determine raw material needs. B) reports on daily production and material usage. C) daily reports on direct labor needs. D) inventory charts.

A) timetables of daily production and determine raw material needs

The purpose of a general ledger payroll clearing account is A) to check the accuracy and completeness of payroll recording and its allocation to cost centers. B) to make the bank reconciliation easier. C) to make sure that all employees are paid correctly each week. D) to prevent the cashier from having complete control of the payroll cycle.

A) to check the accuract and completeness of payroll recording and its allocation to cost centers

Identify one way "rainbow tables" are often used. A) to discover plaintext passwords associated with a hash B) to integrate different tables into one, master table C) to perform a zero-balance check D) to ensure referential integrity of all the associated tables

A) to discover plaintext passwords associated with a hash

A JIT inventory system would be especially useful for a company that manufactures A) toys associated with new movie releases. B) toothpaste. C) alarm clocks. D) motor oil.

A) toys associated with new movie releases

Suppose management wanted to increase the speed of processing customer payments. One way to speed up payment transaction processing is to A) use a FEDI. B) use JEDI analysis software. C) eliminate credit sales. D) extend the amount of credit offered to customers.

A) use a FEDI

When purchasing miscellaneous supplies, companies can reduce costs, improve efficiency, and combat employee fraud by A) using procurement cards. B) implementing a JIT inventory system. C) requiring employees to personally purchase items then reimbursing employees at the end of each month. D) paying amounts out of petty cash

A) using procurement cards

A type of data entry control that would ensure that adjusting entries are posted to existing general ledger accounts is called a(n) ________ check. A) validity B) existence C) closed loop verification D) reasonableness

A) validity

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) validity check. B) closed loop verification. C) zero-balance check. D) completeness test.

A) validity check

How is credit approval generally handled for established customers with a documented payment history? A) A new credit application is requested. B) General authorization by a sales clerk C) Specific authorization by the credit manager D) A formal credit check should be made for each sale.

B) General authorization by a sales clerk

Which of the decisions below is not ordinarily found as part of the revenue cycle? A) What credit terms should be offered? B) How often should accounts receivable be subjected to audit? C) How can customer payments be processed to maximize cash flows? D) What are the optimal prices for each product or service?

B) How often should accounts receivable be subjected to audit

________ is an efficient way to track and process information about raw materials used in production. A) A just-in-time inventory system B) Identifying materials with bar codes or RFID tags C) A materials resources planning

B) Idenetifying materials with bar codes or RFID tags

________ costs are expenses associated with quality assurance activities. A) Prevention B) Inspection C) Internal failure D) External failure

B) Inspection

MRP-II is to MRP, as lean manufacturing is to A) EOQ. B) JIT. C) push manufacturing. D) reorder point.

B) JIT

Identify the most accurate statement below. A) Several purchase requisitions are often created to fill one purchase order. B) Several purchase orders are often created to fill one purchase requisition. C) Every purchase requisition should lead to the creation of one purchase order. D) Every purchase order should lead to the creation of one purchase requisition.

B) Several purchase orders are often created to fill one purchase requisition

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) General authorization to approve the order is given to sales clerks. B) Specific authorization must be granted by the credit manager. C) The sale should be rejected. D) The sales clerk should order a report from a credit bureau before approving the order.

B) Specific authorization must be granted by the credit manager

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) The controller or treasurer must approve accounting subsystem journal entries before any updating may occur. D) Nonroutine transactions are entered into the system by the treasurer's office.

B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger

What issue did Airbus encounter when using CAD software to help design the A380 Superjumbo airliner? A) The actual A380 was heavier than the CAD model. B) The actual A380 was not able to carry as much weight as the CAD model. C) Design teams used different versions of the same CAD software, resulting in key information loss. D) The CAD software was not advanced enough to help design the A380.

B) The actual A380 was not able to carry as much weight as the CAD model

Which of the following is not one of the principles of proper graph design for bar charts? A) Include data values with each element. B) Use 3-D rather than 2-D bars to make reading easier. C) Use colors or shades instead of patterns to represent different variables. D) Use titles that summarize the basic message.

B) Use 3-D rather than 2-D bars to make reading easier

What is the best control to mitigate the threat of paying prices that are too high for goods ordered? A) Require the receiving department to verify the existence of a valid purchase order. B) Use only approved suppliers and solicit competitive bids. C) Only pay invoices that are supported by the original voucher package. D) Use bar-code technology to eliminate data entry errors.

B) Use only approved suppliers and solicit competitive bids

Which of the controls below would be least effective at preventing a company from ordering goods at a price higher than market? A) Only place orders with vendors on an approved vendor list. B) Variance analysis of actual expenses to budgeted expenses C) For high-dollar goods, solicit competitive bids from possible vendors. D) Frequent review of, and update to, vendor price lists stored in the AIS

B) Variance analysis of actual expenses to budgeted expenses

The risks associated with over-production are likely of greatest concern to which company below? A) a cereal manufacturer B) a manufacturer that produces designer clothing C) a manufacturer of printer paper D) a mailbox manufacturer

B) a manufacturer that produces designer clothing

Two documents usually accompany goods shipped to a customer. What are the two documents? A) a bill of lading and an invoice B) a packing slip and a bill of lading C) an invoice and a packing slip D) an invoice and a sales order

B) a packing slip and a bill of lading

A voucher package should include A) a purchase requisition, vendor invoice, and receiving report. B) a purchase order, vendor invoice, and receiving report. C) a purchase requisition, purchase order, and receiving report. D) a bill of lading and vendor invoice.

B) a purchase order, vendor invoice and receiving report

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 subsytem; treasurer originated

Identify a useful tool for monitoring accounts receivable. A) ERP exception report B) accounts receivable aging report C) accounts receivable tolerance report D) customer credit limit report

B) accounts receivable aging report

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) accounts receivable clerk; controller C) cashier; controller D) cashier; treasurer

B) accounts receivable clerk; controller

Elif Package Delivery calculates the cost per delivery by identifying variables as cost drivers, and allocating overhead accordingly. What costing approach does Elif Package Delivery use? A) job-order B) activity-based C) unit-based D) process

B) activity-based

For replacement of inventories and assets destroyed by fire or other disasters, an organization needs A) stand-by facilities. B) adequate insurance coverage. C) source data automation. D) All of the above are correct.

B) adequate insurance coverage

Identify one control that can be used to mitigate the threat of poor product design that results in excess costs. A) production planning systems B) analysis of warranty and repair costs C) encryption D) insurance

B) analysis of warranty and repair costs

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) proper segregation of duties B) automation of data collection C) sound hiring procedures D) review of appropriate performance metrics

B) automation of data collection

What control procedure(s) should be used to reduce the risk of the destruction of financial statement master data? A) multifactor authentication B) backup and disaster recovery C) encryption D) all of the above

B) backup and disaster recovery

Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size. One variable, the costs associated with holding inventory, is referred to as A) ordering costs. B) carrying costs. C) the reorder point. D) stockout costs.

B) carrying costs

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 credit memos B) cash and vouchers C) cash D) cash and checks

B) cash and vouchers

Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should distribute paychecks. A) accounts payable department B) cashier C) internal audit department D) external auditor

B) cashier

All of the following edit checks for online editing of accounts receivable transactions would probably be included except A) validity checks on customer ID and invoice numbers. B) check digit verification on the amount of the sale. C) closed loop verification on the customer ID. D) field checks on the values in dollar fields.

B) check digit verification on the amount of the sale

The manager of Cezary Foods was purchasing inventory from Bogumil Distributors online. The manager entered the items and quantities, completed the checkout and payment process, but received the following error message before the order could be processed: "Please enter your phone number." This message is likely the result of a A) validity check. B) completeness test. C) closed-loop verification. D) customer relationship management software application.

B) completeness test

It has been discovered that credit sales have been made to customers with a poor credit rating. If this continues, the company will face increasing uncollectible receivables and losses due to bad debts. Separation of duties between ________ and ________ should help resolve the problem. A) shipping; billing duties B) credit approval; marketing C) billing; credit approval D) marketing; accounts receivable

B) credit approval; marketing

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

Which type of payroll report lists the voluntary deductions for each employee? A) payroll register B) deduction register C) earnings statement D) federal W-4 form

B) deduction register

Identify the adjusting entry that is made at the end of an accounting period to reflect an exchange of cash prior to the performance of a related event is classified as a(n) A) accrual entry. B) deferral entry. C) revaluation entry. D) correcting entry.

B) deferral entry

Adjusting entries that are made to recognize revenue that has been received but not yet earned are classified as A) estimates. B) deferrals. C) accruals. D) revaluations.

B) deferrals

Regularly reviewing an accounts receivable aging report can help management do what? A) identify customers who have not purchased anything lately B) determine whether changes are needed in the firm's credit policies C) improve the speed which customers make payments D) determine whether the firm's pricing policy is effective

B) determine whether changes are needed in the firm's credit policies

Evaluated receipt settlement increases efficiency by A) eliminating the need for receiving reports. B) eliminating the need for vendor invoices. C) eliminating the need for purchase orders. D) eliminating the need to prepare and mail checks.

B) eliminating the need for vendor invoices

Executive immersion experiences are important because A) CEOs often have no idea what rank-and-file employees do on a daily basis. B) employees who have positive attitudes contribute to increasing company profits. C) many employees feel upper management is out of touch. D) it is important for organizations to take social responsibility seriously.

B) employees who have positive attitudes contribute to increasing company profits

An accounts receivable aging report is useful for doing everything except A) estimating bad debts. B) estimating future sales. C) projecting the timing of future cash flows. D) deciding whether to increase a specific customer's credit limit.

B) estimating future sales

Marina Filimena is an accountant at Jasmina Hair Products. Marina 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

It costs ________ times as much to acquire a new customer as it does to make a sale to an existing customer. A) two B) five C) eight D) ten

B) five

Just-In-Time (JIT) inventory is best characterized by A) frequent deliveries of large quantities to be held at the work centers. B) frequent deliveries of smaller quantities of items to the work centers. C) less frequent deliveries of large quantities of goods to central receiving. D) infrequent bulk deliveries of items directly to work centers.

B) frequent deliveries of smaller quantities of items to the work centers

If a firm uses an ERP, the best way to mitigate the risk of the destruction of master data is to A) frequently update the ERP system. B) implement the ERP system in three separate instances. C) periodically audit the ERP system. D) integrate the ERP system with all IT functions.

B) implement the ERP system in three separate instances

In the expenditure cycle, good control dictates that expenditures should be paid by check. This may not be feasible when minor purchases are made. To facilitate quick payment for minor purchases, a(n) ________ should be set up and maintained using ________. A) special bank account; disbursement vouchers B) imprest fund; vouchers C) cash box; small denomination bills D) petty cash fund; procurement cards

B) imprest fund; vouchers

Involving accountants in executive compensation plans is often especially helpful A) in keeping track of the executive compensation plan. B) in identifying the appropriate metrics to use when linking compensation to performance. C) in reducing the total amount of compensation paid to executives. D) in suggesting the appropriate amount of compensation executives should be paid.

B) in identifying the appropriate metrics to use when linking compensation to performance

Which of the following is not a benefit of using a payroll service bureau or a professional employer organization? A) freeing up of computer resources B) increased internal control C) reduced costs D) wider range of benefits

B) increased internal control

The cashier deposits checks for Benedek Incorporated and also prepares payments to vendors. Of the following, who is best able to reconcile the bank statement to Benedek's records on a regular basis? A) cashier B) internal audit department C) treasurer D) external auditor

B) internal audit department

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

A workforce inventory report A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter. B) is used in preparing labor-related reports for government agencies. C) is used for employee information and annual payroll reports. D) is used to document compliance with applicable regulations.

B) is used in preparing labor-related reports for government agencies

An important control that can be used to reduce the risk of employee kickbacks is A) surveillance cameras. B) job rotation. C) off-site restrooms. D) use of ID badges.

B) job rotation

Elif Package Delivery determines the cost per delivery by averaging total cost over the number of deliveries. What costing approach does Elif Package Delivery use? A) unit-based B) job-order C) process D) activity-based

B) job-order

"Pull manufacturing" is also known as A) manufacturing resource planning (MRP). B) just-in-time manufacturing system (JIT). C) the economic order quantity (EOQ) system. D) ahead-of-time production implementation (ATPI).

B) just-in-time manufacturing system

Because many HRM / payroll master databases typically contain only descriptive information (such as which employees possess which skills), many firms have deployed ________ to more effectively leverage employees knowledge and skills. A) relational databases B) knowledge management systems C) Resources, Events, and Agents (REA) databases D) cardinality systems

B) knowledge management systems

Sule Technologies initiated a just-in-time inventory system in 2013. Now the production manager, Chan Ziaou, wants to apply the same principles to the entire production process. His recommendation is that Sule adopt a A) master production scheduling system. B) lean manufacturing system. C) manufacturing resource planning system. D) computer-integrated manufacturing system

B) lean manufactuing system

Which of the following is not a general threat to the revenue cycle? A) inaccurate master data B) loss of customers C) poor performance D) unauthorized disclosure of sensitive information

B) loss of customers

Which of the following is not a threat to the revenue cycle billing process? A) accounts receivable errors B) loss of customers C) failure to bill D) inaccurate credit memos

B) loss of customers

Yasamin Roshni owns and operates a small deli in Miami, Florida. Each afternoon, she prepares a shopping list that describes the quantity and variety of ingredients that she will purchase in the evening from her wholesaler. The shopping list is an example of a(n) A) bill of materials. B) materials requisition. C) operations list. D) production order.

B) materials requisition

A company uses the method for tracking accounts receivable where customers pay according to individual sales invoices. This describes the ________ method. A) monthly statement B) open-invoice C) balance forward D) cycle billing Answer: B

B) open-invoice

The ________ should always be included with a merchandise shipment to a customer. A) picking ticket B) packing slip C) sales invoice D) remittance advice

B) packing slip

Companies that specialize in processing payroll are known as A) paycheck distribution companies. B) payroll service bureaus. C) professional employer organizations. D) semi-governmental organizations.

B) payroll service bureaus

Which process or activity relates to overproduction? A) product design B) planning and scheduling C) production operations D) cost accounting

B) planning and scheduling

In activity-based costing, the expenses associated with planning and design of new products are ________ overhead. A) batch-related B) product-related C) company wide D) expenditure-based

B) product-related

Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as ________ centers. A) cost B) profit C) investment D) revenue

B) profit

Which of the following threats is not specific to the purchase requisition process of the expenditure cycle? A) stockouts B) purchasing from unauthorized vendors C) requisitioning goods not needed D) All of the above are threats in the purchase requisition process.

B) purchasing from unauthorized vendors

If duties are properly segregated, the authorization function is performed by ________, the recording function is performed by ________, and cash handling is performed by the ________. A) accounts payable; purchasing; cashier B) purchasing; accounts payable; cashier C) purchasing; cashier; accounts payable D) purchasing; accounts payable; treasurer

B) purchasing; accounts payable; cashier

What is a key feature of materials requirements planning (MRP)? A) minimize or entirely eliminate carrying and stockout costs B) reduce required inventory levels by scheduling production rather than estimating needs C) determine the optimal reorder point D) determine the optimal order size

B) reduce required inventory levels by scheduling production rather than estimating needs

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

Which item below is not considered a major input to the general ledger and reporting system? A) summary entries from the major subsystems B) reports from managers C) adjusting entries D) financing and investing activities

B) reports from managers

What is one of the best ways to improve the overall efficiency and effectiveness of the receipt and storage of ordered items? A) requiring all suppliers to have the carrier verify quantities and item numbers before shipment B) requiring all suppliers to include RFID tags on their items C) requiring all suppliers to use EDI to expedite the receiving department function D) requiring all delivery trucks to have satellite data terminals to expedite the receiving department function

B) requiring all suppliers to include RFID tags on their items

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) reconciliations. B) revaluations. C) estimates. D) accruals.

B) revalutations

There is a symmetrical interdependence between a firm's expenditure cycle and its suppliers' A) production cycle. B) revenue cycle. C) expenditure cycle. D) general ledger and reporting system.

B) revenue cycle

The benefits of a lockbox arrangement with a bank are maximized when A) the bank is located nearby to the company, so remittance advices can be delivered to the company every day. B) several banks around the country are used, in order to minimize the time payments spend in the mail. C) an arrangement is made with only one bank, so all remittance advices can be batched for processing. D) the bank deposits the payments and accesses the customer's information system to record the payments.

B) several banks around the country are used, in order to minimize the time payments spend in the mail

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

Which of the following is not classified as a voluntary deduction? A) pension plan contributions B) social security withholdings C) insurance premiums D) deductions for a charity organization

B) social security withholdings

A reverse auction would likely be best suited to the purchase of A) central processing units (CPUs). B) soybeans. C) designer clothing. D) automobiles.

B) soybeans

The document that lists each employee's gross pay, payroll deductions, and net pay in a multicolumn format is called A) an employee earnings statement. B) the payroll register. C) a deduction register. D) an employee time sheet summary.

B) the payroll register

A serious exposure in the revenue cycle is loss of assets. What is the related threat and applicable control procedure that address this exposure? A) shipping errors; reconciliation of sales order with picking ticket and packing slip B) theft of cash; segregation of duties and minimization of cash handling C) making sales that turn out to be uncollectible; force sales people to make collection calls on customers with past due balances D) poor performance; preparation and review of performance reports

B) theft of cash; segregation of duties and minimization of cash handling

The payroll transaction file should contain A) entries to add new hires. B) time card data. C) changes in tax rates. D) All of the above are correct.

B) time card data

Variances for variable costs will be misleading when the planned output differs from budgeted output. A solution to this problem would be A) calling all costs fixed. B) to use flexible budgeting. C) better prediction of output. D) to eliminate the budgeting process

B) to use flexible budgeting

Basic segregation of duties requires the credit manager reports to the ________ and the treasurer report to the ________. A) treasurer; controller B) treasurer; vice president of finance C) controller; vice president of finance D) marketing manager; vice president of finance

B) treasurer; vice president of finance

Which of the following factors is not of key importance when selecting inventory suppliers? A) product price B) vendor corporate structure C) product quality D) vendor delivery dependability

B) vendor corporate structure

Checking the quantity of inventory available before accepting a sales order is a good practice for all of the reasons except to A) determine which items may need to be back ordered. B) verify the accuracy of the perpetual inventory records. C) inform the customer about availability and delivery times. D) update inventory records to reduce the quantity available by the number of items ordered

B) verify the accuracy of the perpetual inventory records

When would an MRP inventory approach be a preferred to a JIT inventory approach? A) when a product has a short life cycle B) when demand for inventory is fairly predictable C) when demand for inventory is very unpredictable D) MRP is always a preferred method over JIT.

B) when demand for inventory is fairly predicatable

Which is the best control to prevent invoicing customers for more than the actual quantity shipped? A) Use the information from the sales order to prepare the sales invoice. B) Use the information from the packing slip to prepare the sales invoice. C) Use the information from the bill of lading to prepare the sales invoice. D) Use the information from the picking ticket to prepare the sales invoice.

B)Use the information from the packing slip to prepare the sales invoice

Which of the following is true about accounting for fixed assets? A) Depreciation expense under IFRS will likely be higher than under GAAP, because acquisitions of assets with multiple components must be separately depreciated under IFRS, whereas under GAAP assets could be bundled and depreciated over the longest of the useful life for any of the components. B) IFRS doesn't allow capitalization of any asset that separately accounts for less than 20% of total assets. C) Depreciation expense under IFRS will likely be less than under GAAP, because standards for depreciable lives on asset classes are much longer than under GAAP. D) IFRS and GAAP account for fixed assets in much the same way.

A) Depreciation expense under IFRS will likely be higher than under GAAP, becaues acquisitions of assets with multiple components must be separately depreciated under IFRS, whereas under GAAP assets could be bundled and depreciated over the longest of the useful life for any of the components

Identify the item below that is not a desired result of an employee bonus systems. A) Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus. B) Employees may look for ways to improve service. C) Employees may analyze their work environment and find ways to cut costs. D) Employees may work harder and may be more motivated to exceed target goals to earn a bonus.

A) Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus

A way to incorporate the advantages of Electronic Data Interchange with the Electronic Funds Transfer is A) Financial Electronic Data Interchange. B) e-commerce. C) to use procurement cards. D) an electronic lockbox.

A) Financial Electronic Data Interchange

The following control can reduce the distribution of fraudulent paychecks. A) Have internal audit investigate unclaimed paychecks. B) Allow department managers to investigate unclaimed paychecks. C) Immediately mark "void" across all unclaimed paychecks. D) Match up all paychecks with time cards.

A) Have internal audit investigate unclaimed paychecks

IFRS is an acronym for what? A) International Financial Reporting Standards B) Internal Forensic Response System C) Input and Financial Reporting Standards D) Internal Fault Recovery System

A) International Financial Reporting Standards

How can CAD software help improve the efficiency and effectiveness of the product design process? A) It can eliminate the costs associated with creating and destroying physical prototypes. B) It can simulate how new products will be manufactured. C) It can store all the data associated with all products. D) All of the above

A) It can eliminate the costs associated with creating and destroying physical prototypes

How can PLM software improve the efficiency and effectiveness of the product design process? A) It can eliminate the costs associated with creating and destroying physical prototypes. B) It can simulate how new products will be manufactured. C) It can store all the data associated with all products. D) All of the above

A) It can eliminate the costs associated with creating and destroying physical prototypes

Don't be mad John, it was just a... A) Joke B) None of the above

A) Joke

________ attempts to minimize or eliminate carrying and stockout costs. A) Just-in-time inventory B) Materials requirements planning C) Economic order quantity D) Evaluated receipt settlement

A) Just-in-time inventory

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) Only pay from original invoices. B) Require three-way match for all inventory purchase invoices. C) Cancel all invoices and supporting documentation when paid. D) Establish strict access and authorization controls for the approved vendor master file.

A) Only pay from original invoices

Which objective listed below is not a cost accounting objective for the production cycle? A) Provide information for planning, controlling, and evaluating the performance of production operations. B) Provide cost data about products used in pricing and product mix decisions. C) Collect and process the information used to calculate inventory and cost of goods sold amounts that appear in the financial statements. D) Provide tests of audit control functions as part of the AIS.

A) Provide information for planning, controlling and evaluating the performance of production operations

Which of the following would be the best control to prevent receiving department employees from stealing inventory and claiming the ordered quantity wasn't received from the vendor? A) Reconcile quantity on packing slip to physical count when accepting delivery. B) Restrict physical access to the receiving area. C) Require all deliveries be made at the receiving area. D) Require dual signatures on the move ticket when receiving delivers the inventory to the warehouse.

A) Reconcile quantity on packing slip to physical count when accepting delivery

The accounts receivable clerk 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) Send monthly statements to all customers with balances owed. B) Reconcile sales invoices in the billing department to the total debits to accounts receivable subsidiary ledgers. C) Sequentially prenumber all invoices and prepare a sequence check at the end of each day. D) Reconcile the accounts receivable control account to the accounts receivable subsidiary ledger.

A) Send monthly statements to all customers with balances owed

Direct deposit of employee paychecks is one way an organization can improve efficiency and reduce payroll-processing costs. Which statement regarding direct deposit is false? A) The cashier does not authorize the transfer of funds from the organization's checking account to a payroll checking account. B) The cashier does not have to sign employee paychecks. C) Employees who are part of a direct deposit program receive a copy of their paycheck indicating the amount deposited. D) Employees who are part of a direct deposit program receive an earnings statement on payday rather than a paper check.

A) The cashier does not authorize the transfer of funds from the organization's checking account

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 the wrong merchandise. B) The company may be shipping the wrong quantities of merchandise. C) The company may be shipping orders to the wrong address. D) All of the above threats may apply to this scenario.

A) The company may be shipping the wrong merchandise

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) The sales order should be created and written to a file. C) Shipping should be notified of an order in process. D) A picking list should be generated for the warehouse.

A) The customer's available credit should be checked

What is the main difference between MRP-II and JIT manufacturing systems? A) The length of the planning horizon B) JIT uses long-term customer demand for planning purposes, but MRP-II uses short-term customer demand for planning purposes. C) MRP-II relies on EDI, but JIT does not. D) There are no significant differences between MRP-II and JIT.

A) The length of the planning horizon

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 provides sales forecast and customer order information to the production cycle, but the production cycle sends information back to revenue about finished goods production. B) The revenue cycle receives information from the production cycle about raw materials needs. C) The production cycle sends cost of goods manufactured information back to the revenue cycle. D) The production cycle does not exchange information with the revenue cycle.

A) 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

Which of the following is true about IFRS? A) There is a global trend towards using IFRS for reporting purposes, though U.S. companies are not currently required to do so. B) The switch to IFRS is required by the Sarbanes-Oxley Act. C) IFRS is only slightly different than U.S. GAAP. D) The switch to IFRS is cosmetic only—there isn't any real impact on AIS.

A) There is a global trend towards using IFRS for reporting purposes, though U.S. companies are not currently required to do so

The balanced scorecard attempts to solve what major issue associated with traditional accounting reports? A) Traditional accounting reports focus too narrowly on financial performance. B) Traditional accounting reports are not easily understood by non-accountants. C) Traditional accounting reports are expensive to produce. D) Traditional accounting reports are produced too slowly to provide value.

A) Traditional accounting reports focus too narrowly on financial performance

To control for risks associated with the threat of inventory loss, who should have primary responsibility for work-in-process inventories? A) a factory supervisor B) the inventory stores department C) purchasing D) the receiving department

A) a factory supervisor

The management at Barks-a-Million is considering a new inventory control system. The current system is inadequate because it frequently causes stockouts that interrupt production and lead to excess stock of other materials — resulting in markdowns and high carrying costs. The new system will focus on reducing or completely eliminating carrying costs, most likely employing A) a just-in-time inventory system. B) a reorder point. C) materials requirements planning. D) the economic order quantity

A) a just-in-time inventory system

To minimize the number of checks that need to be written to pay vendor invoices, a company should use A) a voucher system. B) a just-in-time inventory system. C) a nonvoucher system. D) an evaluated receipt settlement system.

A) a voucher system

Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should record payroll. A) accounts payable department B) cashier C) internal audit department D) external auditor

A) accounts payable department

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) accruals. B) deferrals. C) revaluations. D) corrections.

A) accruals

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) an access control matrix B) passwords and user IDs C) closed-loop verification D) specific authorization

A) an access control matrix

Immediately after the adjusting entries are posted, the next step in the general ledger and reporting system is to prepare A) an adjusted trial balance. B) closing entries. C) financial statements. D) an unadjusted trial balance.

A) an adjusted trial balance

The accounts receivable management method typically used by credit card companies is A) balance forward. B) postbilling. C) monthly statement. D) open-invoice.

A) balance forward

Why might an organization find it most beneficial to involve accountants 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 accountants are generally able to improve the quality of new products C) because involving accountants in product design boosts firm morale D) because accountants are generally able to identify what consumers want in a new product

A) because generally at least 65% of product costs are determine in the design stage and accountants can help minimize

As responsibility reports are rolled up into reports for higher level executives, they A) become less detailed. B) become more detailed. C) become narrower in scope. D) look about the same.

A) becomes less detailed

The ________ is a legal contract that defines responsibility for goods that are in transit. A) bill of lading B) packing slip C) back order D) picking list

A) bill of lading

How does an MRP inventory system reduces inventory levels? A) by reducing the uncertainty regarding when materials are needed B) by receiving materials exactly when needed and in exact quantities C) by computing the exact costs of purchasing and carrying inventory D) none of the above

A) by reducing the uncertainty regarding when materials are needed

The disbursement voucher and supporting documents are sent to the ________ for payment prior to the due date. A) cashier B) treasurer C) controller D) accounts payable department

A) cashier

When a proper segregation of duties exists in the area of handling cash receipts, the ________, who reports to the ________, actually handles the cash and is not the same person who posts cash receipts to customer accounts. A) cashier; treasurer B) cashier; controller C) accountant; treasurer D) accountant; controller

A) cashier; treasurer

A payroll clearing account is used to A) check the accuracy of payroll costs. B) speed up payroll transaction processing. C) reduce the transaction costs associated with payroll transaction processing. D) eliminate the need to manually record payroll transactions.

A) check the accuracy of payroll costs

Which activity below is not performed by Human Resources management (HRM)? A) compensation B) training C) discharge D) recruitment and hiring

A) compensation

During the sales order entry process, a ________ is performed to verify that each transaction record contains all appropriate data items. A) completeness test B) redundant data check C) field check D) reasonableness test

A) completeness test

Accountants can help executive compensation plan boards A) comply with legal and regulatory requirements. B) by identifying the best ways to keep the details of compensation plans out of the hands of external parties. C) avoid paying excessive amounts of "perks" to executives. D) distribute information regarding how well each executive is performing their job

A) comply with legal and regulatory requirements

A major way in which IFRS differs from GAAP that will affect the design of a company's general ledger and reporting system is an IFRS principle known as A) componentization. B) monetization. C) securitization. D) none of the above

A) componentization

Using technology such as robots and computer-controlled machinery to shift from mass production to custom order manufacturing is referred to as A) computer integrated manufacturing (CIM). B) lean manufacturing. C) Six Sigma. D) computer-aided design (CAD).

A) computer integrated manufactuing (CIM)

Performance reports for cost centers should compare actual versus budget ________ costs. A) controllable B) uncontrollable C) fixed D) variable

A) controllable

Ideally, inventory purchases occur in response to ________ in a JIT inventory system. A) customer demand B) optimal demand C) forecast demand D) supplier demand

A) customer demand

Ngai Nhung is the sales manager at Hung Technologies. At lunch with the company CEO, Ngai complained that a recent shipment from a vendor had been unsatisfactory and was returned. As a result, Hung's purchasing manager needed to send a ________ to the supplier. A) debit memo B) purchase order C) blanket purchase order D) receiving report

A) debit memo

The legitimacy of customer orders is established by ________ in Internet-based customer orders. A) digital signatures B) the customer's pin number C) the customer's credit card number D) prior experience with the customer

A) digital signatures

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. The technology that is used for communication between GRCCo and PetCo is A) electronic data interchange. B) vendor-managed inventory. C) sales force automation. D) optical character recognition.

A) electronic data interchange

Customers that send their payments electronically directly to the billing company's bank are using A) electronic funds transfer (EFT). B) electronic data interchange (EDI). C) procurement cards. D) an electronic lockbox.

A) electronic funds transfer (EFT)

Separating the shipping and billing functions is designed to reduce the threat of A) failure to bill customers. B) billing customers for wrong quantities. C) billing customers before merchandise has been shipped. D) shipping the wrong merchandise.

A) failure to bill customers

Why is a separate payroll account used to clear payroll checks? A) for internal control purposes, to help limit any exposure to loss by the company B) to make bank reconciliation easier C) Banks don't like to commingle payroll and expense checks. D) All of the above are correct.

A) for internal control purposes, to help limit any exposure to loss by the company

Restricting access to the approved supplier list can A) help reduce the risk of fraudulent disbursements. B) cause purchase order approval delays. C) eliminate the risk of duplicate payment. D) improve the efficiency of the expenditure cycle.

A) help reduce the risk of fradulent disbursements

If a firm does not use an ERP, the best way to mitigate the risk of the destruction of master data is to A) implement backup and disaster recovery procedures. B) use an ERP. C) proper segregation of duties. D) use of multiple master data files.

A) implement backup and disaster recovery procedures

What is the main reason a list of potential alternative suppliers be maintained? A) in case the primary supplier is out of stock B) so the firm can sample different suppliers C) in case the primary supplier is more expensive D) to segregate purchasing suppliers

A) in case the primary supplier is out of stock

Which of the following is not a threat to the revenue cycle shipping process? A) incomplete orders B) inventory theft C) picking the wrong items D) wrong shipping address

A) incompelete orders

Labor productivity is measured by the quantity produced divided by the labor time required to produce it. All other things held constant, an increase in labor productivity will increase throughput by A) increasing productive capacity. B) increasing productive processing time. C) increasing yield. D) increasing all components of throughput.

A) increasing productive capacity

Key differences exist when an integrated Enterprise Resource Planning system (ERP) replaces an existing AIS or legacy system. For example, ________ are more accurate and timely, enabling sales order entry staff to provide customers more accurate information about delivery dates. A) inventory records B) cash receipts C) credit approval decisions D) exception reports

A) inventory records

Form 941 A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter. B) is used in preparing labor-related reports for government agencies. C) is used for employee information and annual payroll reports. D) is used to document compliance with applicable regulations.

A) is filed each quarter to reconcile monthly tax payments with total tax liability for the quarter

For recording time spent on specific work projects, manufacturing companies usually use a A) job time ticket. B) time card. C) time clock. D) labor time card.

A) job time ticket

Traditionally, what did manufacturing firms use to track the amount of time a worker spends on each specific task? A) job-time ticket B) barcoded ID card C) clock punchcard D) RFID chips

A) job-time ticket

Direct labor must be tracked and accounted for as part of the production process. Traditionally, direct labor was tracked using ________ but an AIS enhancement is to use ________ to record and track direct labor costs. A) job-time tickets; coded identification cards B) move tickets; coded identification cards C) employee earnings records; job-time tickets D) time cards; electronic time entry terminals

A) job-time tickets; coded identification cards

Which of the following is not a benefit of activity-based costing? A) lower cost B) better decisions C) improved cost management D) identification of cost drivers

A) lower cost

"Push manufacturing" is also known as A) manufacturing resource planning (MRP). B) just-in-time manufacturing system (JIT). C) the economic order quantity (EOQ) system. D) ahead-of-time production implementation (ATPI).

A) manurfacuting resource planning (MRP)

What control would best mitigate the threat of paying an invoice twice? A) never authorizing payment of a photocopy of an invoice B) double-checking mathematical accuracy of invoices C) approval of purchase orders D) maintaining adequate perpetual inventory records

A) never authorizing payment of a photocopy of an invoice

A(n) ________ system posts an approved invoice to the vendor account and stores it in an open invoice file until payment is made by check. A) nonvoucher B) voucher C) cycle D) evaluated receipt settlement

A) nonvoucher

Gulshan Parvana operates a machine shop in Istanbul, Turkey. She places bids on small projects in the metropolitan area. Which of the following is most likely to be a cost driver that should be considered when determining how to allocate utility costs? A) number of projects completed B) number of units produced C) number of labor hours D) sales revenue

A) number of projects completed

If you believe not all adjusting entries were posted in the general ledger, you should prepare a general ledger control report listing journal vouchers in A) numerical sequence. B) chronological order. C) general ledger account number order. D) any order, since you have to review them all anyway.

A) numerical sequence

Yasamin Roshni owns and operates a small deli in Miami, Florida.. She maintains a file that lists the steps required to make each of her famous subs. These step-by-step instructions are examples of a(n) A) operations list. B) bill of materials. C) production order. D) materials requisition

A) operations list

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) payroll register

Payroll deductions fall into the broad categories of ________ and ________. A) payroll tax withholdings; voluntary deductions B) unemployment; social security taxes C) unemployment taxes; income taxes D) voluntary deductions; income taxes

A) payroll tax withholdings; voluntary deductions

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) picking ticket. B) bill of lading. C) packing slip. D) sales order.

A) picking ticket

The expenses associated with the use of clean rooms in the production of computer hard drives are ________ costs. A) prevention B) inspection C) internal failure D) external failure

A) prevention

Which of the following is generally not shown on a receiving report? A) price of the items B) quantity of the items C) purchase order number D) counted and inspected by

A) price of the items

MacDougalKids is a mid-sized manufacturer of organic baby food. MacDougalKids uses a JIT inventory management approach. Which of the following factors would likely be least important when selecting inventory suppliers? A) product price B) product quality C) vendor delivery dependability D) All would be equally important

A) product price

Identify one control that can be used to mitigate the threat of under-production. A) production planning systems B) analysis of warranty and repair costs C) encryption D) insurance

A) production planning systems

Although there are some similarities between JIT and MRP, identify one major difference below. A) production scheduling B) reducing the opportunity for inventory theft C) reducing inventory carrying costs D) requires more analysis than EOQ

A) production scheduling

A monthly statement sent to customers serves a control purpose by A) providing an opportunity for customers to verify the balance owed and activity on the account. B) triggering the process to record a customer payment. C) summarizing invoices and amounts due for customers. D) reminding customers of the balance due and due date.

A) providing an opportunity for customers to verify the balance owed and activity on the account

The packing slip A) lists the quantity, price, 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 and description of each item included in the shipment. D) lists the quantity and price of each item included in the shipment.

C) lists the quantity and description of each iterm included in the shipment

What system privileges should an employee involved in the general ledger and reporting system be given? A) general privileges to create, delete, update, or modify data B) no privileges permitting the creation, deletion, updating, or modification of data C) only the specific privileges necessary to perform an employee's assigned duties D) read-only privileges

C) only the specific privileges necessary to perform an employee's assigned duties

The ________ normally triggers the billing process in the revenue cycle. A) sales order received from the sales department B) picking ticket received from the sales department C) packing slip received from the shipping department D) journal voucher received from the shipping department

C) packing slip received from the shipping department

All of the following regarding payroll checks is correct except A) access to payroll checks should be restricted. B) payroll checks should be sequentially pre-numbered. C) payroll checks should be drawn on the organization's regular bank account(s). D) the cashier should sign payroll checks.

C) payroll checks should be drawn on the organization's regular bank account(s)

Detailed data about reasons for warranty and repair costs is considered an applicable control used to mitigate the threat of A) underproduction. B) overproduction. C) poor product design. D) suboptimal investment of fixed assets.

C) poor product design

Elif Package Delivery determines the cost per delivery by summing the average cost of loading, unloading, transporting, and maintenance. What costing approach does Elif Package Delivery use? A) job-order B) unit-based C) process D) activity-based

C) process

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 expansive regular periodic reports to cover all information needs. B) the real-time inquiry needs of all users. C) producing regular periodic reports and respond to real-time inquiry needs. D) access by investors and creditors of the organization to general ledger balances.

C) producing regular periodic reports and respond to real-time inquiry needs

Which organization provides payroll processing as well as other HRM services, like employee benefit design and administration? A) title companies B) payroll service bureau C) professional employer organization D) paycheck distribution companies

C) professional employer organization

Ngai Nhung is the sales manager at Hung Technologies. At lunch with the company CEO, Ngai proudly announced that he had received a ________ from a client. The client had just requested a large quantity of components from Hung. A) blanket purchase order B) voucher C) purchase order D) purchase requisition

C) purchase order

Research suggests which of the following is key to improving total customer satisfaction? A) price of product B) speed of shipping C) quality and nature of customer contact after the sale D) quality and nature of customer contact before the sale

C) quality and nature of customer contact after the sale

The least effective control for preventing an organization from processing fraudulent credit memo is to A) match each credit memo with a receiving report. B) require approval for each credit memo by the credit manager. C) reconcile total of credit memos to total debits posted to customers' subsidiary ledgers. D) sequentially prenumber all credit memos and perform a sequence check at the end of each day.

C) reconcile total of credit memos to total debits posted to customers' subsidiary ledgers

The ________ normally triggers the customer payment recording process. A) sales invoice B) deposit slip C) remittance advice D) customer monthly statement

C) remittance advice

One way a firm could reduce the risk of problems with supplier dependability is to A) purchase inventory from only U.S.-based suppliers. B) use an ERP system for purchases. C) require suppliers to be ISO 9000 certified. D) automate the purchasing function

C) require suppliers to be ISO 9000 certified

At a minimum, a switch to IFRS from GAAP will affect companies' accounting information system by A) requiring companies to increase the processing power of their existing accounting information systems. B) requiring IT departments to hire programmers that are fluent in languages besides English. C) requiring the creation of additional fields in research and development (R&D) records to capture information about the stage of research and development that costs are incurred in. D) requiring firms to completely redesign their existing accounting information systems because current systems are not compatible with IFRS accounting principles.

C) requiring the creation of additional fields in research and development (R&D) records to capture information about the stage of research and development that costs are incurred in

The most vital control in preventing unauthorized changes to the payroll master file is A) hiring totally honest people to access and make changes to this file. B) segregation of duties between the preparation of paychecks and their distribution. C) segregation of duties between the authorization of changes and the physical handling of paychecks. D) having the controller closely review and then approve any changes to the master file.

C) segregation of duties between the authorization of changes and the physocal handling of paychecks

Which of the following is not a common control for ensuring inventory is secure and inventory counts are accurate? A) control of physical access to the inventory storage areas B) transfers of inventory with proper documentation C) sending "blind" copies of purchase orders to inventory control for data entry D) making physical counts of inventory at least once per year

C) sending "blind" copies of purchase orders

Corrections are entries made to correct errors found in A) all journals. B) special journals. C) the general ledger. D) the financial statements

C) the general ledger

Identify item below that is the biggest purchasing function cost driver. A) the number of purchase requisitions processed B) the number of suppliers used C) the number of purchase orders processed D) the quantity of items ordered

C) the number of purchase orders processed

A "zero balance check" refers to which of the following control procedures? A) a type of batch total B) cross-footing the payroll register C) the payroll clearing account shows a zero balance once all entries are posted D) trial balance showing that debits equal credits

C) the payroll clearing account shows a zero balance once all entries are posted

Pay rate information should be stored in A) employees' personnel files. B) employee subsidiary ledgers. C) the payroll master file. D) electronic time cards.

C) the payroll master file

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) budget department B) controller C) treasurer D) chief executive officer

C) treasurer

By using an ERP to merge the billing, sales, and marketing functions, the firm may be able to A) bill the customer right after the sale occurs. B) market products and services on bills sent to customers. C) use customer's past purchase history to send information about related products and services the customer may be interested in. D) eliminate the need for a firm to have a billing, sales, and marketing department.

C) use customer's past purchase history to send information about related products and services the customer may be interested in

MacDougalKids is a mid-sized manufacturer of organic baby food. MacDougalKids uses the EOQ inventory management approach. Which of the following factors would likely be least important when selecting inventory suppliers? A) product price B) product quality C) vendor delivery dependability D) All would be equally important.

C) vendor delivery dependability

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) zero-balance check

The management at Barks-a-Million is considering a new inventory control system. The current system is inadequate because it frequently causes stockouts that interrupt production and lead to excess stock of other materials — resulting in markdowns and high carrying costs. The new system will focus on ensuring that these costs are minimized. The new inventory control system will likely employ A) a reorder point. B) a just-in-time inventory system. C) the economic order quantity. D) materials requirements planning.

C)the economic order quantity

Anong Mali is the purchasing manager at Wattana Technologies. She has responsibility for reviewing and authorizing purchase orders. She also reviews receiving reports, approves or corrects them, and authorizes the cashier to pay vendor invoices. Which of the following would correct control weaknesses related to these activities? A) Controls are adequate under the current system. B) Vendor invoices should be reviewed by accounts receivable and then cancelled when paid. C) Vendor invoices should be reviewed by the purchasing manager to ensure that they are correct. D) Accounts payable should reconcile purchase orders, receiving reports, and invoices.

D) Accounts payable should reconcile purchase orders, receiving reports and invoices

Who does the payroll system issue checks to? A) employees and to banks participating in direct deposit B) a company payroll bank account C) government agencies D) All of the above are correct.

D) All of the above are correct

Which of the following tasks are facilitated by maintaining a strong and secure audit trail? A) tracing a transaction from original source document to the general ledger to a report B) tracing an item in a report back through the general ledger to the original source document C) tracing changes in general ledger accounts from beginning to ending balances D) All of the above are facilitated by the audit trail.

D) All of the above are facilitated by the audit trail

Identify in which of the following scenarios a company could adjust the balance due the vendor by issuing a debit memo. A) quantity different from that ordered B) damage to the goods C) goods that fail inspection for quality D) All of the above are possible scenarios.

D) All of the above are possible scenarios

Which of the following statements is false regarding the use of incentives, commissions and bonuses in the payroll system? A) Using incentives, commissions, and bonuses requires linking the payroll system and the information systems of sales and other cycles in order to collect the data used to calculate bonuses. B) Bonus/incentive schemes must be properly designed with realistic, attainable goals that can be objectively measured. C) Incentive schemes can result in undesirable behavior. D) All of the above are true.

D) All of the above are true

Which of the following is not an advantage of a voucher system? A) Several invoices may be included on one voucher, reducing the number of checks. B) Disbursement vouchers may be pre-numbered and tracked through the system. C) The time of voucher approval and payment can be kept separate. D) It is a less expensive and easier system to administer than other systems

D) It is a less expensive and easier system to administer than other systems

What is the key difference between the MRP and JIT inventory management approaches? A) Only JIT reduces costs and improves efficiency. B) MRP is especially useful for products such as fashion apparel. C) JIT is more effectively used with products that have predictable patterns of demand. D) MRP schedules production to meet estimated sales needs; JIT schedules production to meet customer demands.

D) MRP schedykes production to meet estimated sales needs; KIT schedules production to meet customer demands

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

________ are incurred to ensure that products are created without defects the first time. A) External failure costs B) Inspection costs C) Internal failure costs D) Prevention costs

D) Prevention costs

What is not an advantage of using disbursement vouchers? A) Disbursement vouchers reduce the number of checks written. B) Disbursement vouchers can be prenumbered which simplifies the tracking of all payables. C) Disbursement vouchers facilitate separating the time of invoice approval from the time of invoice payment. D) There are no disadvantages to using disbursement vouchers.

D) There are no disadvantages to using disbursement vouchers

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) How can cash payments to vendors be managed to maximize cash flow? B) What is the optimal level of inventory and supplies to carry on hand? C) Where should inventories and supplies be held? D) What are the optimal prices for each product or service?

D) What are the optimal prices for each product or service

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) Should credit be extended to customers? C) How can customer payments be processed to maximize cash flow? D) Which vendor should inventory be purchased from?

D) Which vendor should inventory be purchased from?

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) HTML code. B) XML. C) pdf file. D) XBRL.

D) XBRL

Which of the following statements is not true regarding XBRL? A) XBRL is a variant of XML. B) XBRL is specifically designed for use in communicating the content of financial data. C) XBRL creates unique tags for each data item. D) XBRL's adoption will require accountants and systems professionals tag data for their clients.

D) XBRL's adoption will require accountants and systems professionals tag data for their clients

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) electronic funds transfer for small, occasional purchases from suppliers. B) a nonvoucher system. C) EDI for all small, occasional purchases from suppliers. D) a disbursement voucher system.

D) a disbursement voucher

The management at Barks-a-Million is considering a new inventory control system. The current system is inadequate because it frequently causes stockouts that interrupt production and lead to excess stock of other materials — resulting in markdowns and high carrying costs. The new system will focus on ensuring that orders are placed with sufficient lead time to prevent stockouts by using A) a just-in-time inventory system. B) the economic order quantity. C) materials requirements planning. D) a reorder point

D) a reorder point

Vendor invoices are approved by the ________, which reports to the ________. A) purchasing department; controller B) accounts payable department; treasurer C) purchasing department; treasurer D) accounts payable department; controller

D) accounts payable department; controller

Identify the role below that accountants can play in the production cycle. A) participate in product design B) perform cost analysis C) help an organization choose an inventory control system D) all of the above

D) all of the above

Segregation of duties controls dictates that the collection and recording functions be kept separate from each other. However, the accounts receivable department needs to know when customers pay their invoices. What is a solution to this potential internal control problem? A) Establish a lockbox arrangement with a bank. B) Have customers send a remittance advice with their payment. C) Have mailroom personnel prepare a remittance list which can be forwarded to accounts receivable. D) all of the above

D) all of the above

The operations list shows A) the labor and machine requirements. B) the steps and operations in the production cycle. C) the time expected to complete each step or operation. D) all of the above

D) all of the above

What control procedure(s) should be used to reduce the risk of unauthorized disclosure of the financial statements? A) multifactor authentication B) physical security C) encryption D) all of the above

D) all of the above

The best control procedure for accurate data entry is A) the use of on-line terminals. B) an access control matrix. C) passwords and user IDs. D) automation of data collection.

D) automation of data collection

Ngai Nhung is the sales manager at Hung Technologies. At lunch with the company CEO, Ngai proudly announced that he had negotiated a(n) ________ with a client that represented the customer's long-term commitment to buy components from Hung. A) purchase order B) evaluated receipt settlement C) voucher D) blanket purchase order

D) blanket purchase order

The ________ is the managerial report that shows planned cash inflows and outflows for major investments or acquisitions. A) journal voucher list B) statement of cash flows C) operating budget D) capital expenditures budget

D) capital expenditures budget

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 data you have entered does not include a source reference code. Please enter this data before saving." This is an example of a A) validity check. B) field check. C) zero-balance check. D) completeness test.

D) completeness test

One way of ensuring that recurring adjusting journal entries are made each month would be to A) make all the entries a month in advance. B) rotate the responsibility among the accounting staff. C) program the entries to be made automatically. D) create a standard adjusting journal entry file.

D) create a standard adjusting journal entry file

Identify the following item that should contribute to the efficiency of a payroll system. A) segregation of check distribution from payroll duties B) prompt redeposit of unclaimed paychecks C) a separate payroll bank account D) direct deposit of checks

D) direct deposit of checks

Evaluated receipt settlement approves payment of vendor invoices after reconciling the purchase order and the A) receiving report. B) vendor invoice. C) sales invoice. D) disbursement voucher.

D) disbursement voucher

An organization can implement which of the following controls to reduce the threat of inventory theft or damage? A) review and approval of fixed asset acquisitions B) improved and more timely reporting C) better production and planning systems D) document all movement of inventory through the production process

D) document all movement of inventory through the production process

Which of the following is not a perspective reflected in the balanced scorecard? A) customer perspective B) internal operations perspective C) financial perspective D) efficiency and effectiveness perspective

D) efficency and effectiveness perspective

In the expenditure cycle, Financial Electronic Data Interchange (FEDI) increases efficiency by A) eliminating the need for receiving reports. B) eliminating the need for vendor invoices. C) eliminating the need for purchase orders. D) eliminating the need to prepare and mail checks.

D) eliminating the need to prepare and mail checks

Depreciation expense and bad debt expense are examples of which type of adjusting journal entry? A) deferrals B) accruals C) revaluations D) estimates

D) estimates

The expenses associated with a product recall are ________ costs. A) prevention B) inspection C) internal failure D) external failure

D) external failure

The cost of a product liability claim can be classified as a(n) A) prevention cost. B) inspection cost. C) internal failure cost. D) external failure cost.

D) external failure cost

Which of the following duties could be performed by the same individual and not violate segregation of duty controls? A) handling cash and posting to customer accounts B) issuing credit memos and maintaining customer accounts C) handling cash and authorizing credit memos D) handling cash receipts and mailing vendor payments

D) handling cash receipts and mailing vendor payments

Professional employer organizations (PEOs) are especially attractive to small and mid-sized businesses for all of the following reasons except A) reduced costs. B) wider range of benefits. C) freeing up computer resources. D) improved service quality.

D) improved service quality

Which of the following is not a potential effect of inaccurate data on employee time cards? A) increased labor expenses B) erroneous labor expense reports C) damaged employee morale D) inaccurate calculation of overhead costs

D) inaccurate calculation of overhead costs

Once a vendor is selected for a product, the vendor's identity is recorded in the A) purchase requisition transaction file. B) purchase requisition master file. C) inventory transaction file. D) inventory master file.

D) inventory master file

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) sign check. B) validity check. C) reasonableness test. D) limit check.

D) limit check

The traditional approach to inventory management generally involves A) high stockout costs. B) minimizing item cost. C) receiving goods or services just prior to the time they are needed. D) maintaining inventory levels so that production can continue even if inventory use is greater than expected.

D) maintaining inventory levels so that production can continue even if inventory use is greater than expected

Which type of information below should not be maintained by the AIS in accounting for fixed assets? A) identification/serial number B) cost C) improvements D) market value

D) market value

A method for tracking accounts receivable that matches specific invoices and payments from the customer is called a(n) ________ method. A) specific identification B) balance forward C) cycle billing D) open-invoice

D) open-invoice

Yasamin Roshni owns and operates a small deli in Miami, Florida. Each morning she prepares a list that describes the quantity and variety subs that will be prepared during the day. This list is an example of a(n) A) bill of materials. B) operations list. C) materials requisition. D) production order.

D) production order

During the sales order entry process, a ________ is performed to compare the quantity ordered with the standard amounts normally ordered. A) completeness test B) redundant data check C) field check D) reasonableness test

D) reasonableness test

Internal file labels can be used to prevent the loss of data in the revenue cycle since they A) record off-site storage locations. B) keep competitors from accessing files. C) organize the on-site physical storage site. D) reduce the possibility of erasing important files.

D) reduce the possibility of erasing important files

Identify a key feature associated with materials requirements planning. A) determining economic order quantity for all materials B) minimizing or eliminating carrying and stockout costs C) determining the optimal reorder points for all materials D) reducing required inventory levels by scheduling production, rather than estimating needs

D) reducing required inventory levels by scheduling production, rather than estimating needs

Which of the following is not one of the controls when customer payments are commingled with other mail? A) preparing a remittance list as mail is opened B) restrictively endorsing checks when received C) requiring two mail room clerks to open mail together D) requiring the controller to be personally present when mail is received and opened

D) requiring the controller to be personally present when mail is received and opened

Adjusting entries that reflect a change in accounting principle used to value inventories are classified as A) corrections. B) estimates. C) deferrals. D) revaluations.

D) revaluations

What information is necessary to create the master production schedule? A) engineering department specifications and inventory levels B) engineering department specifications and sales forecasts C) special orders information and engineering department specifications D) sales forecasts, special orders information, and inventory levels

D) sales forecasts, special orders information, and inventory levels

Who should provide the adjusting entries in a well-designed general ledger and reporting system? A) various user departments B) the treasurer's area C) the other major AIS subsystems D) the controller's area

D) the controller's area

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 receiving clerk B) the controller C) the vendor D) the purchasing department manager

D) the purchasing department manager

Which of the following documents would be likely to yield the greatest cost saving by converting from paper to electronic? A) payroll register B) earnings statement C) deduction register D) time card

D) time card

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) feedback B) returnable C) closed-loop D) turnaround

D) turnaround

What is a potential threat to the specific activity of payroll processing? A) hiring unqualified employees B) poor system performance C) violations of employment laws D) unauthorized changes to the payroll master file

D) unauthorized changes to the payroll master file

A clerk at a 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) physical inventory count B) segregation of duties C) limited physical access to bar codes D) use of RFID tags

D) use of RFID tags

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) field check. C) reasonableness test. D) validity check.

D) validity check

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) sales force automation. B) electronic data interchange. C) optical character recognition. D) vendor-managed inventory.

D) vendor-managed inventory

Which of the following is not an activity performed in the expenditure cycle? A) ordering B) receiving C) cash disbursement D) shipping

D)Shipping

Which of the following organization controls should be implemented and maintained to counteract the general threat that the loss of production data will greatly slow or halt production activity? A) Store key master inventory and production order files on-site only to prevent their theft. B) Back up data files only after a production run has been physically completed. C) Access controls should apply to all terminals within the organization. D) Allow access to inventory records from any terminal within the organization to provide efficient data entry.

C) Access controls should apply to all terminals within the organization

The benefits of XBRL include A) organizations can publish financial information only once, using standard XBRL tags. B) tagged data is readable and interpretable by computers, so users don't need re-enter data into order to work with it. C) Both are benefits of XBRL. D) Neither is a benefit of XBRL.

C) Both are benefits of XBRL

________ are used to transmit time and attendance data directly to the payroll processing system. A) Badge readers B) Electronic time clocks C) Magnetic cards D) none of the above

C) Electronic time clocks

What control should be put in place that assigns responsibility for EFT payments made to vendors? A) Encrypt all EFT transmissions. B) Time stamp all EFT transactions. C) Establish a control group to monitor EFT transactions for validity and accuracy. D) Number all EFT transactions.

C) Establish a control group to monitor EFT transactions for validity and accuracy

What is the best way to prevent the acceptance of goods that were never ordered? A) Order only from approved vendors. B) Enforce an appropriate conflict of interest policy in place. C) Match the packing slip to a purchase order before accepting delivery. D) Require specific authorization from the purchasing manager before accepting any goods.

C) Match the packing slip to a purchase order before accepting delivery

Procurement cards differ from corporate credit cards in which of the following ways? A) Credit limits can be set for procurement cards, but not corporate credit cards. B) Credit cards can be used to make purchases without an explicit sign off by supervisors, but procurement cards require a sign off. C) Procurement cards can only be used with approved vendors, but credit cards can be used anywhere. D) Procurement card invoices are sent separately for each card, whereas corporate credit cards are consolidated into a single invoice.

C) Procurement cards can only be used with approved vendors, but credit cards can be used anywhere

The acronym "RFP" stands for what? A) Request for Project B) Request for Processing C) Request for Proposal D) Request for Purchase

C) Request for proposal

Which of the following poses an internal control problem? A) Physical inspection of inventory quantity and condition is outsourced to a firm that specializes in this service. B) Products are released from inventory after a warehouse employee and a shipping clerk both sign the pick list. C) Sales representatives have authority to increase customers' credit limits in $1,000 increments. D) When customer payments are received in the mail, checks are sent to the cashier's office and remittance advices are sent to the accounts receivable department.

C) Sales representatives have authority to increase customers credit limits in $1,000 increments.

Once a purchase request is approved, what is the next step? A) The system creates a purchase order. B) The accounts payable department approves the purchase request, creating a purchase order. C) The inventory master file is accessed to find the preferred supplier(s). D) The department that created the purchase request may buy the requested item(s).

C) The inventory master file is accessed to find the preferred suppliers

Which of the following is a control that can be implemented to help prevent paychecks being issued to a "phantom" or "ghost" employee? A) The cashier should sign all payroll checks. B) Sequentially prenumber all payroll checks. C) Use an imprest account to clear payroll checks. D) Paychecks should be physically distributed by someone who does not authorize time data or record payroll.

C) Use an imprest account to clear payroll checks

A major cost in the purchasing function is the number of purchase orders processed. One technique that may reduce purchasing-related expenses is to have suppliers compete with each other to meet demand at the lowest price. The name of this technique is A) an EDI auction. B) a trading exchange. C) a reverse auction. D) a supplier consortium.

C) a reverse auction

Which of the following will limit a firm's potential loss exposure from paycheck forgery? A) segregation of check distribution from payroll duties B) prompt redeposit of unclaimed paychecks C) a separate payroll bank account D) direct deposit of checks

C) a separate payroll bank account

Source data automation is often effective in reducing A) unintentional errors. B) intentional errors. C) accuracy. D) theft.

C) accuracy

For strongest segregation of duties, a sales representative should never be allowed to A) discuss the company's products. B) negotiate the sales price. C) approve a sale on credit. D) send a customer a gift.

C) approve a sale on credit

What is the best control to reduce the risk of losing payroll data? A) passwords B) physical security controls C) backup and disaster recovery procedures D) encryption

C) backup and disaster recovery procedures

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) open-invoice C) balance forward D) remittance advice

C) balance forward

Which type of graph is the most commonly used to display trends in financial data? A) pie chart B) scatterplot chart C) bar chart D) stochastic chart

C) bar chart

Yasamin Roshni owns and operates a small deli in Miami, Florida. She maintains a file that contains the ingredients used to make each of her famous subs. The ingredients needed to make a specific sub are most similar to a(n) A) operations list. B) production order. C) bill of materials. D) materials requisition.

C) bill of materials

The shipping department at Eka Toys follows policies that determine which carrier will deliver orders according to the size, weight, and destination of the shipment. It maintains standing agreements with shippers that specify legal responsibility for the shipment while it is in transit. The terms of the shipping agreements are documented on A) picking tickets. B) packing slips. C) bills of lading. D) RFID tags.

C) bills of lading

Which of the following is not a threat to the revenue cycle sales order entry process? A) incomplete orders B) invalid orders C) cash flow problems D) uncollectible accounts

C) cash flow problems

Which of the following is generally not a major source of input to a payroll system? A) payroll rate changes B) time and attendance data C) checks to insurance and benefits providers D) withholdings and deduction requests from employees

C) checks to insurance and benefits providers

In activity-based costing, expenses associated with the purchase of health care insurance for employees are ________ overhead. A) batch-related B) product-related C) company wide D) expenditure-based

C) company wide

The use of various forms of information technology in the production process is referred to as A) computerized investments and machines. B) computerized integration of machines. C) computer-integrated manufacturing. D) computer intense manufacturing.

C) computer-integrated manufacturing

In an Activity-Based Costing (ABC) system, a cause-and-effect relationship is known as a A) cost stimulator. B) overhead stimulator. C) cost driver. D) cost catalyst.

C) cost driver

Manufacturing overhead is best described as A) costs that cannot be traced directly to specific jobs or processes. B) costs that are economically feasible to trace directly to specific jobs or processes. C) costs that are not economically feasible to trace directly to specific jobs or processes. D) costs that management has decided not to trace directly to specific jobs or processes.

C) costs that are not economically feasible to trace directly to specific jobs or processes

To ensure proper segregation of duties, only the ________ has authority to issue credit memos. A) accounts receivable supervisor B) controller C) credit manager D) cashier

C) credit manager

Which control would be most appropriate to address the problem of inaccurate payroll processing? A) encryption B) direct deposit C) cross-footing of the payroll register D) an imprest payroll checking account

C) cross-footing of the payroll register

A(n) ________ system prepares and mails monthly statements to customers throughout the entire month, instead of just at the end of the month. A) continuous B) open-invoice C) cycle billing D) balance forward

C) cycle billing

The operating budget A) compares estimated cash flows from operations with planned expenditures. B) shows cash inflows and outflows for each capital project. C) depicts planned revenues and expenditures for each organizational unit. D) is used to plan for the purchase and retirement of property, plant, and equipment.

C) depicts planned revenues and expenditures for each organizational unit

Which type of payroll report includes the details of the current paycheck and deductions as well as year-to-date totals? A) payroll register B) deduction register C) earnings statement D) federal W-4 form

C) earnings statement

The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as A) safety stock. B) just-in-time production. C) economic order quantity. D) optimal inventory quantity.

C) economic order quantity

An ________ is an arrangement where a bank receives customer payments and transmits payment data to the organization. A) e-commerce. B) electronic funds transfer (EFT). C) electronic lockbox. D) electronic data interchange (EDI).

C) electronic lockbox

XBRL stands for A) extensible business reporting language. B) extreme business reporting ledgers. C) external business reporting language. D) extensive business report logic.

C) external business reporting language

Many companies offer their employees a "cafeteria" approach to voluntary benefits in which employees can pick and choose the benefits they want. This plan is normally called a(n) A) elective plan. B) menu options benefit plan. C) flexible benefit plan. D) buffet plan.

C) flexible benefit plan

If you believe a general ledger account was not adjusted properly or at all, you should prepare a general ledger control report listing journal vouchers in A) numerical sequence. B) chronological order. C) general ledger account number order. D) any order, since you have to review them all anyway.

C) general ledger account numnber only

The threat of violation of employment laws relates directly to which activity? A) payroll processing B) collecting employee time data C) hiring and recruiting D) all of the above

C) hiring and recruiting

Sule Technologies installed a new production monitoring system that will reduce system breakdowns by 35%. The new system will increase throughput by A) increasing productive capacity. B) increasing yield. C) increasing productive processing time. D) increasing all components of throughput.

C) increasing productive processing time

In addition to identifying and dealing with defective products before they reach customers, quality management is concerned with initiating process changes that will reduce the number of defective units produced. All other things held constant, a decrease in the number of defective units will increase throughput by A) increasing productive capacity. B) increasing productive processing time. C) increasing yield. D) increasing all components of throughput.

C) increasing yield

The general ledger and reporting system consists of the ________ involved in ________ the general ledger and ________ reports. A) business transactions; updating; processing B) data processing; business transactions for; printing C) information processing; updating; creating D) business transactions; data processing; preparing

C) information processing; updating; creating

Which of the following balanced scorecard dimensions provides measures on new products? A) financial B) internal operations C) innovation and learning D) customer

C) innovation and learning

Falk Noam is the internal auditor for Matan Incorporated. Before investigating the HRM / payroll cycle at Matan, Falk decided to read up on the proper segregation of duties regarding payroll disbursement processes. For strongest segregation of duties, the ________ should periodically observe the paycheck distribution process. A) accounts payable department B) cashier C) internal audit department D) external auditor

C) internal audit department

The expenses associated with disposal of defective products are ________ costs. A) prevention B) inspection C) internal failure D) external failure

C) internal failure

According to generally accepted accounting principles, a sale is recognized when A) cash is received from the customer. B) inventory is removed from the warehouse. C) inventory becomes the legal property of the customer. D) a sales order is approved by sales, inventory control, and credit departments

C) inventory becomes the legal property of the customer

Which electronic files are either read or updated when goods are ordered from a vendor? A) inventory, vendors, and accounts payable B) vendors and accounts payable C) inventory, vendors, and open purchase orders D) open purchase orders and accounts payable

C) inventory, vendors, and open purchase orders

Which of the following is not proposed to be an advantage of activity-based costing? A) better product mix decisions B) better product pricing decisions C) less complex than traditional cost systems D) none of the above

C) less complex than traditional cost system

Using financial incentives requires organizations to A) pay employees less than they would have to if pay was a fixed salary. B) better monitor employee attendance. C) link the payroll system to other cycles to calculate incentive payments. D) better monitor employee effort.

C) link the payroll system to other cycles to calculate incentive payments

If available, a 1% discount for payment within 10 days instead of 30 days represents an approximate savings of ________% annually. A) 1 B) 12 C) 18 D) 36

C) 18

Which of the following scenarios will not be allowed under IFRS? A) A landscaping and garden retail store keeps piles of river rock, gravel, paving stones, and small decorative rocks in a fenced area on the side of the store. The store uses the most recent inventory costs when calculating cost of goods sold, since new inventory is piled on top of the older inventory. B) A grocery store strictly enforces a shelf rotation policy, so that older inventory is always at the front and sold first. The store uses the oldest inventory costs to calculate cost of goods sold. C) A farm chemical supplier maintains a large holding tank of chemicals, into which deliveries are periodically combined with the older chemicals. The supplier averages the cost of all inventory to calculate cost of goods sold. D) All of the above are acceptable under IFRS.

A) A landscaping and garden retail store keeps piles of river rock, gravel, paving stones, and small decorative rocks in a fenced area on the side of the store. The store uses the most recent inventory costs when calculating cost of goods sold, since new inventory is piled on top of the older inventory

Requiring all packing slips be reconciled to purchase orders before accepting a delivery of inventory would be most likely to prevent which of the following situations? A) A supplier delivers more inventory than ordered at the end of the year and sends an invoice for the total quantity delivered. B) An employee mails a fake invoice to the company, which is then paid. C) The inventory records are incorrectly updated when a receiving department employee enters the wrong product number on the receiving report. D) Receiving department employees steal inventory and then claim the inventory was received and delivered to the warehouse.

A) A supplier delivers more inventory than ordered at the end of the year and sends an invoice for the total quantity delivered

The receiving clerk at Wattana Technologies examines incoming shipments and reconciles their contents with the relevant purchase orders. A receiving report is then sent to accounts receivable and the vendor's invoice is approved for payment. Which of the following would correct control weaknesses related to these activities? A) Accounts payable should reconcile the purchase order and the receiving report. B) The invoice should be approved for payment by the shipping clerk after the purchase order and receiving report are reconciled. C) Invoices, purchase orders, and receiving reports should be reconciled by the receiving clerk. D) Controls are adequate under the current system.

A) Accounts payable should reconcile the purchase order and the receiving report

________ identifies costs with the corporation's strategy for production of goods and services. A) Activity-based costing B) Job-order costing C) Process costing D) Manufacturing costing

A) Activity-based costing

Identify one way to improve the accuracy of inventory records that use a perpetual inventory approach A) use of an ERP system B) require the accounting department to calculate cost of goods sold periodically C) use IT to eliminate the need for manual data entry D) use of an MRP inventory system

C) use IT eliminate the need for manual data entry

John is... A) an a$$hole B) a bully C) funny sometimes D) All of the above E) A&B but not C

E) A&B but not C -Michael