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TRUE / FALSE 1.It is not necessary to get specific authorization for each individual routine transaction. 2.Routine transactions refer to common business transactions such as payroll and fixed asset transactions. 3.Accounting for a fixed asset over the life of the asset would have features of non-routine transactions only. 4.The payroll process starts when an.
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141. What are the advantages of outsourcing payroll?  142. Fixed assets are purchased and retired frequently.  Given this frequent change, why are clear        accounting records of fixed assets necessary?  143. Why is it important to conduct an investment analysis prior to the purchase of fixed assets? 144. Explain why categorizing fixed.
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58.Internal control activities within the purchasing process, identified as segregation of duties, would include all of the following, except: A.Responsibility for authorization, custody, and record keeping are to be assigned to different individuals. B.Duties related to requisitioning, ordering, purchase approval, receiving, inventory control, accounts payable, and general accounting are to be delegated.
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59.Personnel records will typically include all of the following, except: A.Documentation related to the initial hiring B.Personal information, such as the employee address C.Medical history subsequent to hiring D.Social security number 60.Each of the following items would likely be found in an employee’s personnel records related to the initial hiring, except: A.Employment application B.Recommendation letters C.Background investigation results D.Overtime.
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21.The human resources department should be responsible for the record keeping function related to payroll. 22.The cash disbursements department should have the responsibility of signing, essentially approving all paychecks. 23.The paymaster should be independent from the departmental supervision responsibilities, so that it can be determined that the paychecks are being distributed to.
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– CHAPTER 10 – END OF CHAPTER QUESTIONS:               111.Which of the following statements about payroll and fixed asset processes is true? A.Both have only routine processes B.Both have only non-routine processes C.Both have routine and non-routine processes D.Payroll has only routine processes, while fixed assets has only non-routine processes               112.For a given pay period,.
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88.In order to help safeguard the security and confidentiality in an electronic business environment, a company should implement controls such as user ID, password, log-in procedures, access levels, and authority tables in order to reduce the risk of: A.Unauthorized access B.Incomplete audit trail C.Virus and worm attacks D.Repudiation of purchase transactions 89.In order to help.
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31.Because the evaluated receipts settlement process relies heavily on an IT system that can quickly access online purchase-order files, a system slowdown could halt all receiving activity. 32.E-business and EDI have much different advantages and risks to the vendor than what exists for the customer. 33.Redundancy is needed for servers, data, and.
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159. Visit the e-commerce website for Jupitermedia Corporation at www.ecommerce-guide.com and        search for EIPP under the News and Trends tab.  Identify the company that introduced an EIPP        product in 2002 as part of its Financial Management Solutions Package.  What does this        company call its EIPP application? 160. You are.
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157. Using a search engine, search the internet for information about Evaluated Receipt Settlement,        or ERS.    You may have more success by searching for the terms ERS and invoices together in        one search.  Based on what you read about ERS on the web, what appears to be the difficulties.
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– CHAPTER 9 – SHORT ESSAY   142. Describe what is likely to occur if company personnel erroneously recorded a purchase        transaction for the wrong vendor?  What if a cash disbursement was posted to the wrong        vendor?  Identify internal controls that would detect or prevent this from occurring.    .
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11.It is common that personnel related expenses are one of the largest expenses reported on the company’s income statement. 12.A challenging area of payroll computation is computing the amount of deductions related to each employee’s pay. 13.Accounting software is available to assist with payroll but it is not very efficient because of.
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137. Why is it important to use an independent paymaster to distribute paychecks?  138. Why do payroll processes result in sensitive information and what is the sensitive information? 139. Why is batch processing well-suited to payroll processes?  140. What are the advantages of automated time keeping such as bar code readers.
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- CHAPTER 10 - MULTIPLE CHOICE 49.Routine business transactions would include which of the following? A.Purchase of merchandise inventory. B.Payment of principal on a note. C.Purchase of fixed asset. D.Paying wages and salaries to employees. 50.This type of transaction is one that a business encounters on a regular, recurring basis.  The volume of the transactions is.
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– CHAPTER 9 – PROBLEMS 149. Identify an internal control procedure that would reduce the following risks in a manual system: The purchasing department may not be notified when goods need to be purchased.  Accounts payable may not be updated for items received.  Purchase orders may be prepared based on unauthorized requisitions. .
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- CHAPTER 9 - MULTIPLE CHOICE 38.The policies and procedures that employees following in completing the purchase of goods or materials, capturing vendor data and purchase quantities, and routing the resulting purchasing documents to the proper departments within the company are called: A.Systems B.Processes C.Activities D.Requisitions 39.The information from a purchase must flow into the purchase.
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148. Why are some fixed assets susceptible to theft?  149. Explain why a real-time update of fixed asset records might be preferable to batch processing of        fixed asset changes.  150. Why is the beginning of a fiscal year the best time to implement a fixed asset software system? 151. What negative.
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134. Identify compensating controls needed for an effective ERS system.  135. What is typically the most time-consuming aspect within the expenditures process?  136. Identify the category of risk that can be reduced by using authority tables, computer logs,        passwords, and firewalls.    .
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21.Cash should be periodically verified by comparing the cash balance with the bank statement. 22.Only the purchasing department should authorize the processing of a cash disbursement transaction. 23.The authorization of a cash disbursement occurs when the accounts payable department matches the purchase order, receiving report, and the invoice, and then forwards the.
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121.The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the: A.Authorization of transactions from the custody of related assets. B.Operational responsibility from the record keeping responsibility. C.Human resources function from the controllership function. D.Administrative controls from the internal accounting controls.               122.              Which of the following departments or.
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69.Types of fraud that may occur in the payroll function include all of the following, except: A.Overstated hours B.Incorrectly computed tax withholdings C.False claims of sick leave D.Pay claims made by ghost employees 70.Which of the following correctly states a reconciliation process to be completed related to payroll? A.Time sheets reconciled to the payroll register. B.Payroll register.
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68.Internal controls related to the purchase returns would include all of the following, except: A.The accounts payable employee who prepares the debit memo should also be responsible for handling the inventory and approving the return. B.Special authorization should be required to officially reject and return the items. C.Debit memos should be issued on.
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99.The security of assets and documents would include all of the following, except: A.Supervisors need to make certain that the assets are being used for their intended purpose. B.Designated members of management should be assigned responsibility for the disposal of any assets C.Maintaining adequate insurance coverage D.Electronic controls are needed to control access to.
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146. Describe how the use of pre-numbered forms for debit memos can help a company determine        that purchase return transactions have not been omitted from the accounting records.  147. Describe how an ERS system could improve the efficiency of expenditure processes?  148. Describe how a procurement card improves the efficiency.
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125. What accounting records are used by accounts payable personnel to keep track of amounts        owed to each vendor?  126. Identify some inefficiencies inherent in a manual expenditures processing system.  127. What are the advantages of BPR?  128. List three examples of BPR used in the expenditures processes.  129. Explain.
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167. Question not available. 168. Question not available. 169. Following are ten internal control failures related to the revenues and cash collection processes. _____ A customer ordered 12 boxes of your product (total of 144 items) for express shipment.  Your data entry clerk inadvertently entered 12 individual items. _____ You enter sales and accounts.
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11.The accounting department is responsible for implementing internal controls over each business process. 12.Independent reconciliation of the accounts payable subsidiary ledger to the general ledger control account will help to assure that all inventories has been properly recorded. 13.Independent reconciliation of the periodic inventory counts and the inventory ledger and the general.
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153. Hitchins, Inc. computerization. Required: Assume that Hitchins, Inc. is preparing to        computerize the manual input processes such as completing a receiving report.  Use Microsoft      Excel to perform the following: Design an appropriate format for a data entry screen that      could be used at the receiving dock to.
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155. Fracho and EDI Controls.  Required: Describe the IT controls that Frimco should include when        it implements an internet EDI system.  For each control you suggest, describe the intended        purpose of the control.  156. Wikkam Company and segregation of duties: Accounts payable record keeping. Authorization of new vendors Authorization of purchase returns Authorization of.
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121. Why would some checks need to include two signatures?  122. During the process of reconciling the bank account, why is it necessary to review the dates,        payees, and signatures on the canceled checks? 123. What specifically does a cash disbursements clerk do when he or she “cancels” an invoice? .
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143. Debate the logic used in the following statement:  “The person responsible for approving cash        disbursements should also prepare the bank reconciliation because he is most familiar with the        checks that have been written on that bank account.”  144. Expenditure systems are crucial in the automobile manufacturing industry, where.
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152. The following list presents statements regarding the expenditure processes. Each statement is separate and should be considered to be from a separate company.  For each statement, determine whether it is an internal control strength or weakness, then describe why it is a strength or weakness.  If it is an internal.
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170. Brathert Company is a small company with four people working in the revenue processes.  One        of the four employees supervises the other three.  Some tasks that must be accomplished within        the revenue processes are the following: Accounts receivable record keeping Approving credit of customers Authorizing customer returns Authorizing new customers Billing customers Cash receipts.
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89.A detailed listing of the company’s fixed assets, divided into categories consistent with the general ledger accounts is called a: A.Fixed Asset Journal B.Fixed Asset Subsidiary Ledger C.Fixed Asset Schedule D.Fixed Asset Budget 90.This phase of the fixed asset processes relates to those required to maintain accurate and up-to-date records regarding all fixed assets throughout.
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130. Explain how system availability problems could cause cash management problems.  131. How is an audit trail maintained in an IT system where no paper documents are generated? 132. What can a company do to protect itself from business interruptions due to power outages? 133. What paper document is eliminated when.
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79.An electronic payroll time keeping device that collects time and attendance data when employees enter their time sheets is called: A.Timekeeper B.Paymaster C.Electronic time clock D.Badge readers 80.An electronic payroll time keeping device that collects data when employee identification badges are swiped through an electronic reader are called: A.Timekeeper B.Badge reader C.Paymaster D.Electronic time clock 81.In order to smooth out.
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137. Explain why the availability of computer systems in the receiving department is such an        important component of an automated expenditures process.  138. Identify three ways that buyers and sellers may be linked electronically.  139. What techniques can a company use to reveal problems concerning potential exposure to        unauthorized access.
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145. What are some of the practical characteristics of fixed assets that complicate the calculation of        depreciation?  146. What is different about the nature of fixed asset purchasing that makes authorization controls        important?  147. Explain the necessity of supervision over fixed assets.  .
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– CHAPTER 9 – END OF CHAPTER QUESTIONS: 98.Within the purchases processes, which of the following is the first document prepared and thereby the one that triggers the remaining purchasing processes? A.The invoice B.The receiving report C.The purchase order D.The purchase requisition 99.Personnel who work in the receiving area should completed all of the following processes,.
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48.There are different ways to issue a purchase order to a vendor.  Which of the following is not one of the ways? A.Hard copy via fax or mail B.Hard copy by hand C.Electronically via e-mail D.Directly through the computer network 49.When purchased goods are received, which of the following tasks should be completed in the.
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78.When a payment has been made, the cash disbursements clerk will clearly mark the invoice with information pertaining to the date and the check number used to satisfy the obligation.  This process is called: A.Marking the invoice B.Retiring the invoice C.Cancelling the invoice D.Destroying the invoice 79.A chronological listing of all payments is referred to.
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41.For most companies, fixed asset acquisitions are considered to be routine processes. 42.One area where earnings management may be prevalent due to the judgmental nature of the underlying data is with fixed assets. 43.Earnings management related to fixed assets would occur when reducing expenses by decreasing the useful life of the fixed.
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– CHAPTER 10 – SHORT ANSWER QUESTIONS 129. Sales and inventory purchases are routine processes that occur nearly every day in a business.        How are these routine processes different from payroll or fixed asset processes?  130. Even though payroll and fixed asset processes may not be as routine as revenue processes,.
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108.A manager suspects that certain employees are ordering merchandise for themselves over the Internet without recording the purchase or receipt of the merchandise.  When vendors’ invoices arrive, one of the employees approves the invoices for payment.  After the invoices are paid, the employee destroys the invoices and related vouchers.  To.
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133. Explain why an employee’s individual record is accessed frequently, but changed relatively        infrequently.  134. Explain two things that should occur to ensure that hours worked on a time card are accurate        and complete.  135. Explain the reasons that an organization would have a separate bank account established.
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