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Study Resources (Accounting)

SHORT ANSWER/ESSAY QUESTIONS 1.List three of the four tasks that supply chain management systems can perform. 2.Name some factors that may cause management to deviate from an order size recommendation. 3.Discuss various activities in the inventory process. 4.List and discuss some reports that are used to help manage the inventory process. 5.What are the main.
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21.Which of the following is a part of the financial process? A.Inventory management B.Sales order processing C.Budget preparation D.Vendor invoicing 22.Which of the following is part of the financial process because it is an event that does not fall within the revenue, purchasing, or inventory processes? A.Cost accounting B.Payment of stock dividends C.Accounts receivable D.Cash receipts 23.Which of the following.
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SHORT ANSWER/ESSAY QUESTIONS 1.Monitoring control activities to determine if they are adequate and effective can be done on an ongoing basis, as a separate project, or as a combination of both.                 Briefly compare monitoring on an ongoing basis versus monitoring as a separate               project. 2.Identify and briefly describe the classification.
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31.The authority for ordering goods and services normally resides with which of the following? A.Treasurer B.Originating department manager C.Controller D.Employee who initiates the order 32.The authority for receiving incoming shipments of goods and the responsibility for checking them normally resides with which of the following? A.Receiving department and quality control personnel B.Purchasing agent and quality control personnel C.Employee.
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11.To enable a user to access data and program files, what should the user be required to enter? A.A parity check B.A personal identification code C.A self-diagnosis test D.An echo check 12.What is the purpose of user authentication? A.To verify that the user is entitled to enter transaction data B.To verify the identity of the user C..
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71Which of the following is the most effective type of internal control? A. Automated detective controls. B.Automated preventive controls. C.Manual detective controls. D.Manual preventive controls. 72.A disaster recovery plan is which of the following? A.An application control. B.An automated preventive control. C.A general control. D.An automated application control. 73.What are the three types of firewalls? A.On-screen applications, operating system-based firewalls, and.
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51.What are controls that concern all computer activities? A.General controls. B.Application controls. C.Change controls. D.IT audit controls. 52.What is (are) included in IT governance? A.The corporate charter, policies, and bylaws of the corporation. B.The issues surrounding IT management and security. C.The entire organization’s management of resources and risks. D.All of these are included in IT governance. 53.Which of the following.
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11.Purposes of the revenue cycle include not only reporting, but also the facilitation and control of certain business activities. 12.The revenue activities for a merchandising organization progress from advertising and soliciting orders; to recording and acknowledging a sales order; to shipping the order; to               billing the customer; to collecting, recording.
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SHORT ANSWER/ESSAY QUESTIONS 1.List three types of ratios that place information in a context so that relationships               may be judged. 2.List the types of entries recorded in the financial process. 3.In an accounting information system software package, is the ability to enter out-              of-balance entries a defect or a benefit?  Discuss your.
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11.The purchasing process normally includes purchase order processing, receiving, and accounts payable. 12.While a budget is important for planning and control, it does not have any special               purpose in the purchasing process. 13.Because purchase orders are not completed transactions, they do not need to be               stored in a file. 14.An organization.
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Chapter 8 MULTIPLE CHOICE QUESTIONS 1.What is the core activity of an accounting information system? A.The revenue process B.The purchasing process C.The financial process D.The transaction process 2.Which financial statements constitute the basic reporting requirements in the financial process? A.Statement of owners’ equity, statement of cash flow, and balance sheet B.Balance sheet, income statement, and statement of cash.
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Chapter 7 Control Activities MULTIPLE CHOICE QUESTIONS 1.Control activities can be designed to provide reasonable assurance that all except which of the following will happen? A.Transactions will be recorded to permit preparation of financial statements. B.All risks will be eliminated. C.Access to assets will be permitted only in accordance with management’s               authorization. D.The recorded accountability.
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TRUE/FALSE QUESTIONS 1.The revenue process includes not only reporting but also facilitating and controlling certain business processes of the firm. 2.In the open item system, payments are applied to the outstanding balance rather than against particular invoices. 3.In the balance forward system, invoices are regarded as open only during the current period, and.
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11.Which of the following statements is false? A.Payment for goods and services typically makes the largest demand on an                             organization’s cash. B.Most commonly, after a purchase order has been approved, a manager will               then deal with vendors directly. C.The order for goods and services has traditionally been in the form.
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21.An employee in the receiving department keyed in a receiving record and inadvertently omitted the purchase order number.  What control will prevent this error? A.Anticipation of contents B.Sequence check C.Reasonableness test D.Smartcard 22.Some of the more important control activities in computerized accounting information systems are validity checks, reasonableness checks, and checks for logical relationships.  How.
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TRUE / FALSE 1.Warehouse personnel are responsible for periodically reviewing the open purchase order file and following up on unfilled orders. 2.Competitive bidding is a relatively uncomplicated procedure in that the lowest priced bidder that can meet the needs of the organization will be accepted. 3.The delivery of goods or provision of contracted.
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4.What are the components of internal control? 5.What are four indications of management’s philosophy and operating style? 6. Define what a SAS 70 review is used for AND describe what the two different types of reports that can result from one of these reviews will               contain. 7. Describe 4 requirements pertaining to.
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21.What is a major source of purchasing errors? A.Data entry errors B.Not setting budgets for managers C.Not validating the purchase order D.EDI errors 22.What documents the receipt of goods? A.Receipt verification B.Ticket C.Purchase validation D.Invoice 23.When do disbursement activities begin? A.Upon receipt of goods B.After validation of receipt of goods C.Upon approval of the invoice D.After data has been keyed into the open invoice.
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11.Which of the following methods is the most commonly used payment application for open item accounts? A.Automatic identification B.Post-identification C.Pre-identification D.Intermittent identification 12.What document identifies the products and quantities ordered and gives the warehouse               location, aisle number, shelf position, bin number, or other reference to the location of the               goods? A.FOB B.Picking list C.Remittance advice D.Credit memo 13.Which.
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Chapter 10 MULTIPLE CHOICE QUESTIONS 1.What is a common flow of data in the purchasing process? A.Sales order processing, shipping, invoicing, and receiving cash B.Receiving inventory, storing inventory, and shipping inventory C.Ordering goods, receiving, invoicing, and disbursing cash D.Ordering goods, shipping, and disbursing cash 2.Why are audit trails for the purchasing process somewhat more complicated than              .
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61.What should be the role of an information services steering committee? A.Initiate all applications development; set priorities for implementing, applications; develop system security. B.Assign duties to systems personnel; prepare and monitor application implementation plans; prepare system flowcharts. C.Establish/approve information processing policies, system projects, and priorities for implementing systems; evaluate effectiveness of processing              .
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SHORT ANSWER QUESTIONS 1.The president of a small company boasted to associates at a business club, "Fortunately, we don't need internal control.  You see, we're a family               business, and we're not going to steal from one another."  Discuss the               wisdom of the president’s statement. 2.An organization has just been.
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4.Identify and describe at least three principal reports required for effective management of the purchasing process. 5.Identify and describe the two data entry points for the purchasing process that attention must be focused on. 6.What are the advantages of EDI over paper purchase orders? 7.What are some of the key reports required for.
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11.Which of the following is not a type of entry in the financial process? A.Data captured in and transferred from other processes to the financial               process B.Transactions originally recorded in the financial process C.End-of-period adjustments required in the financial process D.Planning and control for the purchase of inventory and other resources 12.What types of.
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21. The audit committee is composed of top managers of a company. 22. The organizational structure defines limits of managerial authority, areas of               responsibility, and lines of reporting. 23. The Enterprise Risk Management (ERM) framework discusses the relationship between risk and strategy-setting. 24. The Sarbanes-Oxley Act (SOX) allows the director of internal.
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SHORT ANSWER/ESSAY QUESTIONS 1.Why is preparing an aging schedule for balance forward accounts more difficult than for open item accounts? 2.What are the principal events to be recorded in the revenue process? 3.Discuss the advantages of a computerized accounting information system for recording payments. 4.Describe cycle billing and its advantages. 5.Explain why gross profit analysis.
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4.List and describe the two basic types of encryption. 5.Identify five commonly used input verification controls. 6.Describe the process of cryptography using private and public keys. 7.Explain what key(s) would be used by a business transmitting sensitive data and why the key(s) would be used. .
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21.Sales, sales order processing, shipping, and accounts receivable are all part of which of the following processes? A.The financial process B.The revenue process C.The purchasing process D.The inventory process 22.The process that encompasses events related to the distribution of good and services to customers and the receipt of money in exchange for these goods and.
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TRUE/FALSE QUESTIONS 1.Because of the similarities in inventory processes of manufacturing organizations,               treatment of inventory problems in the paper industry would be treated like those               in the automobile manufacturing industry. 2.Lead time is the period of time between the order of a product and receipt from               the vendor. 3.All.
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11.Physical controls protect assets from theft and destruction. 12.Duties that should be segregated are authorization of transaction and other events, custody of assets, and modification or creation of related data and program files. 13.General controls relate to the flow of data in and among individual applications, such as customer billing and cash.
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14. Explain why an analysis of vendor performance is an important control in the purchase function. 15. Discuss the typical authorization controls one would expect to find in the purchasing process in information processing. 16. Describe output controls typically found in the purchasing process. 17.List four of the five actions that result from.
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11.Most data entry relating to inventory occurs in the revenue and purchasing processes rather that in the inventory module. 12.Two methods to account for inventory are flexible and static. 13.Lead time stock is that quantity of inventory deemed necessary to avoid the loss               of sales due to stockouts. 14.The reorder point is.
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41.When using both private and public keys for cryptography, which of the following statements is correct? A.The digital certificate is used for encryption. B.The private key is used for decryption. C.The public key is used for decryption. D.The digital certificate is used for decryption. 42.Which of the following statements regarding cryptography is not correct? A.Much emphasis.
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15.List and discuss two exception-type reports generated in the revenue process related to the collection accounts receivable and how a manager would make use of these reports. 16.List five of the six actions that result from a shipment notification (shipment to a customer) in a merchandising or manufacturing organization. 17.List two of.
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TRUE/FALSE QUESTIONS 1.A network that uses fiber optic cable provides better access security than cables that transmit electrical impulses. 2.To provide a high level of assurance, a large organization would normally not need more than fifty controls. 3.Computer hardware controls are built in by the manufacturer. 4.General controls apply to the reliability and consistency.
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11. List and explain three of the common control activities associated with sales and billing. 12.  List and explain three examples of information processing authorization controls. 13. Give two examples of data verification controls found in the revenue process. 14. Describe three of the functions typically found in the sales order function. .
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6.When is it necessary to have a sales order processing module in the revenue process? 7.What is the difference between credit limit, credit rating, and credit hold? 8.What is the difference in the balance forward and the open item methods of accounting for customer accounts? 9. List two exception-type reports that would be.
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8.What are the underlying fundamental concepts of control activities? 9.What are the three types of firewalls? 10.  Name and define the three kinds of batch backup strategies. 11. List AND describe three of the four methods available for auditing through the computer described in SAS 94.  Indicate the LEVEL of IT knowledge necessary.
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TRUE/FALSE QUESTIONS 1.The financial process is the core activity of the accounting information system. 2.Accounting information system software packages are usually composed of modules, with one or more modules composing a part of related accounting               information system processes. 3.The balance sheet and statement of cash flow constitute the basic reporting requirements in.
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11. Which of the following control activities would protect inventory from theft? A.Limited access to the warehouse containing inventory. B.Allowing only the inventory manager to authorize removal of items from                             the warehouse. C.Only the shipping clerks can verify the shipments and deliver the items to                             the warehouse. D.All of the.
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31.After an organization compares the vendor invoice with the purchase order data               and the receiving data, the invoice data are then keyed into which file? A. Open purchase order file. B. Open vendor invoice file. C.Open accounts transaction file. D.Open customer invoice file. 32.Which of the following are the principal reports required for the.
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31.  Which of the following represent cash handling risks in the revenue process? A. Misappropriation of cash receipts. B. Improper reconciliation of the cash account. C. Uncollectible accounts written off without proper authorization. D. All of the above are associated with cash handling risks in the revenue process. D. 32. Which of the following represents the.
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Chapter 9 The Revenue Process MULTIPLE CHOICE QUESTIONS 1.What is the location at which title to goods changes from the shipping organization to the               customer known as? A.Picking list B.Cash and carry C.Standing orders D.FOB point 2.What is(are) the method(s) of accounting for accounts receivable? A.Balance forward B.Open item C.Both A and B are methods of accounting for accounts receivable. D.Neither.
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8.Describe the risk response component of the Enterprise Risk Management (ERM) framework. 9.Define Enterprise Risk Management. 10.Provide some examples of risks to accounting information systems. 11.List some examples of things that would change the risk profile of an organization. 12.Define the following risk responses: avoid, reduce, share, accept. .
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Chapter 11 MULTIPLE CHOICE QUESTIONS 1.What is lead time? A.The period of time between shipment of ordered goods and receipt B.The time required by customers for receipt of goods purchased C.The period of time between the ordering of a product and its receipt D.The maximum time inventory is to remain on the shelf 2.What is safety stock? A.The.
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6.Explain the difference in master accounts, sub-accounts, and normal accounts. 7.What are the three types of transactions recorded in the financial process? 8.Why is the time-sensitive entries feature useful? 9. List and explain four examples (out of the ten listed in the text) of transaction risk in the financial process. 10. List and explain.
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