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Study Resources (Accounting)

– CHAPTER 12 –PROBLEMS 142. If an accounting information system was entirely a manual system (no computers used), explain        how data would be captured, recorded, classified, summarized, and reported. Discuss how the        sophistication of the company’s computer system impacts the accounting output and,        alternatively, how the requirements for accounting.
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21.              When automated matching is used, the system will not approve an invoice for payment unless the items and quantities match with the packing slip and the prices match the purchase order prices. 22.The evaluated receipt settlement system is an IT enabled system that reduces the time and cost of processing.
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1) Analyzing the cash flow statement may help analysts determine the financial health of a company. Which of the following signs below is not an indicator of a financially healthy company? A) The company's operations are a major source (not a use) of cash. B)  The company's operations are a major use.
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21.    The exclusive output of an AIS is that it produces trading partner documents such as checks,          invoices, and statements. 22.    The output of an AIS is for external users only, such as trading partner documents and external          reports including financial statements. 23.    Internal reports produced by an AIS are designed.
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TRUE/FALSE: 1.              A business process has a well-defined beginning and end. 2.Each business process has a direct effect on the financial status of an organization. 3.Few accounting information systems rely on computer hardware and software to track business processes.   4.The rethinking and redesigning that occur during business process reengineering are aided by the.
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113. What occurs in an accounting information system that classifies accounting transactions?  114. What are the differences between internal reports and external reports generated by the    accounting information system?   115. What types of businesses are in the supply chain of an automobile manufacturer?  116. When a company evaluates a supplier.
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26) Based upon recent accounting scandals, identify potential red flags that may be discovered in financial analysis. 27) Barking Shark International Corporation Balance Sheet December 31, 2014 and 2013 20142013 Current assets Cash$ 10,000$ 5,000 Short-term investments7,00010,000 Accounts receivable, net30,00023,000 Inventory37,00035,000 Prepaid expenses4,0003,000 Total current assets$ 88,000$ 76,000 Property, plant, and equipment, net33,30035,000 Other assets27,00022,500 Total assets$148,300$133,500 Current liabilities Short-term borrowings$ 28,400$ 13,900 Accounts payable20,00022,500 Total current liabilities$48,400$36,400 Non-current.
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21) The debt ratio is an indicator of a company's: A) relationship between current liabilities and current assets B) relationship between debt and interest expense C) relationship between interest expense and income D) percentage of assets financed with debt 22) All of the following ratios directly relate to the analysis of a given stock as.
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145. Each of the points listed next represents an internal control that may be implemented within a        company’s accounting information system to reduce various risks.  For each point, identify the        appropriate business process (revenue, expenditure, conversion, administrative). In addition,        refer to the description of business processes under.
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30) As the accountant at Soil Test Corporation, you are responsible for preparing the cash flow statement. You have decided to prepare the statement using the direct method and have gathered together the following data from the accounting records: Payments of non-current debt$220,000 Collections on accounts receivable215,600 Acquisition of equipment by issuing non-current note.
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13.2   Perform vertical analysis 1) When performing vertical analysis of an income statement, which of the following is usually used as the base? A) gross sales B) net sales C) net income D) gross margin 2) Expressing gross margin for 2013 as a percentage of net sales in 2013 is an example of: A) vertical analysis B) horizontal.
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16) Name some common financial ratios used by investors to compare different companies. 17) How is it possible for investors to compare two companies of different sizes or companies that operate in different industries? 18) For each of the following items, explain its significance and show how the ratio mentioned is calculated: a..
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63.An integrated collection of enterprise-wide data that includes five to ten fiscal years of non-volatile data, used to support management in decision making and planning is referred to as: A.Operational Database. B.Relational Database. C.Data Storage. D.Data Warehouse. 64.This type of database contains the data that are continually updated as transactions are processed and includes data.
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43.Which of the following statements is true? A.Most accounting systems in use today are computerized systems. B.All accounting systems, whether computerized or not, must capture data, process the data, and provide outputs C.It is not necessary for an accounting system to maintain summary information if it maintains detail information. D.The general ledger will be.
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134. Explain a supply chain linkage and give an example. 135. Explain how business process reengineering occurs.  Also, explain how it differs from the typical        changes in company policies. 136. For an accounts receivable system, what kind of data would be found in the master files and        transaction.
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13.1   Perform horizontal analysis 1) Horizontal analysis involves the study of: A) percentage changes in comparative financial statements B) percentage and/or dollar amount changes in various financial statement amounts from year to year C) the change in key financial statement ratios over a certain time frame or horizon D) the changes in individual financial statement.
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73.The intercompany, computer-to-computer transfer of business documents in a standard business format is called: A.E-business. B.E-commerce. C.Local area network. D.Electronic data interchange. 74.Which of the following is NOT one of the three components of electronic data interchange? A.Commerce - encompasses all forms of electronic trading. B.Intercompany - two or more companies conducting business electronically. C.Standard business format -.
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13.5   Use ratios to make business decisions 1) The acid-test ratio reflects the company's percentage of assets financed with debt. 2) Inventory turnover measures the number of times a company sells its average inventory level during a year. 3) A high current ratio means that a company's current assets represent a relatively large.
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– CHAPTER 12 – END OF CHAPTER QUESTIONS 97.When a customer returns goods that were purchased, the business process to accept the return would most likely be a(n): A.Administrative process. B.Conversion process. C.Expenditure process. D.Revenue process. 98.Which of the following is least likely to be an output of the accounting information system? A.A check B.A report C.An invoice D.A bar.
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21) Briefly state the information provided by the following ratios and briefly discuss how they are used in financial analysis: a. price/earnings ratio b. dividend yield 22) What is the basic assertion of the efficient capital market theory? What are the implications of an "efficient market" for: a. managers of companies who want to.
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TRUE/FALSE: 1.Technology has done little to help the hospitality industry improve the quality of services to customers. 2. Using IT will change the business processes and the way accounting data is collected. 3.When a business process occurs, there must be a way of capturing the data generated to input it into the AIS. 4.There.
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– CHAPTER 12 –SHORT ESSAY 132. For each category of business processes (revenue, expenditure, conversion, administrative),        give an example of a business process. 133. Think of a company that you have worked for or with which you have done business. Which        departments within the company need reports generated by.
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83.              Which of the following is not one of broad categories of controls? A.The risk that assets will be stolen or misused. B.The risk of errors in accounting data or information. C.The risk of loss due to a natural disaster. D.The risk of fraudulent activity by employees. 84.Which of the following is not a risk.
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143. Classify each of the following processes as either a revenue process, expenditure process, conversion process, or administrative process:a. Selling common stock to raise capital Purchasing electronic components to manufacture DVD players Moving electronic components from the stockroom to the production floor to begin making DVD players Paying employees at the.
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120.  What two kinds of efficiency improvement result from business process reengineering in     conjunction with IT systems?  121. Explain the differences between a field, record, and file.  122. Explain why random access files would be preferable to sequential access files when payroll        personnel are changing a pay rate for.
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12) Use the following data to prepare a common-size comparative income statement for Old Mill Corporation on December 31, 2014. Round percentages to one-tenth percent. Old Mill Corporation Comparative Income Statement For the Years Ended December 31, 2014 and 2013 20142013 Net sales$1,400,000$1,200,000 Expenses: Cost of goods sold$900,000$780,000 Selling and general expenses250,000220,000 Interest expense55,00052,000 Income tax expense64,00048,000 Total expenses$1,269,000$1,100,000 Net income$131,000$100,000 13) Horizontal.
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11) Hamilton Corporation reports the following data: Net sales$ 370,000 Cost of goods sold250,000 Gross margin$ 120,000 If net sales increases by 15%, and cost of goods sold increases by 20%, gross margin would: A) increase by 4.6% B) decrease by 4.6% C) decrease by 4.4% D) increase by 4.4% 12) Given the following data: Net sales$100,000 Cost of goods sold60,000 Gross.
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53.A collection of data stored on a computer in a form that allows the data to be easily accessed, retrieved, manipulated, and stored is referred to as a(n): A.Accounting Information System. B.Information Technology. C.Database. D.Master File. 54.A collection of data stored in several small two-dimensional tables that can be joined together in many varying ways.
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43.              The entities, processes, and information flows that involve the movement of materials, funds, and related information through the full logistics process, from the acquisition of raw materials to the delivery of the finished produces to the end use is a set of linked activities referred to as: A.Management Information System. B.Supply.
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34) Discuss any strengths and/or weaknesses disclosed by the following cash flow statement: Apsley Corporation Cash Flow Statement For the Year Ended December 31, 2014 Operating activities: Income from operations$ 27,500 Add (subtract) non-cash items: Amortization$ 13,400 Net reduction in current assets other than cash5,300 Net reduction in current liabilities(4,900)13,800 Net cash inflow from operating activities$ 41,300 Investing activities: Purchase of equipment$(85,000) Net cash outflow.
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32) Selected data from three companies appear below: Ashpot Co. Potassium Co. Phosphate Co. Sales $425,000 $325,000 $300,000 Cost of goods sold 280,000 230,000 200,000 Increase (decrease) in inventory (40,000) 25,000 42,000 Increase (decrease) in accounts receivable 63,000 (20,000) 22,000 Increase (decrease) in accounts payable 37,000 30,000 (16,000) Determine the cash paid to suppliers for inventory during the year for each company. The Accounts payable account relates solely to the purchase of inventory. 33).
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17) Prepare a vertical analysis for Young's Point Corporation's balance sheet to determine the component percentages of its assets, liabilities, and shareholders' equity. Round percentages to the nearest one-tenth percent. Young's Point Corporation Balance Sheet December 31, 2013 Assets Total current assets$ 320,000 Long-term investments100,000 Property, plant, and equipment, net855,000 Total assets$1,275,000 Liabilities Total current liabilities$210,000 Non-current debt480,000 Total liabilities$690,000 Shareholders' equity Total shareholders'.
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13.3   Prepare common-size financial statements 1) Of the items listed below, the one most helpful in the comparison of different size companies is: A) horizontal analysis B) comparison of their net incomes C) preparation of common-size financial statements D) comparison of their working capital balances 2) Common-size financial statements represent a form of: A) ratio analysis B) vertical.
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11) The following data represent selected information from the comparative income statement and balance sheet for Hot Rolled Corporation for the years ended December 31, 2014 and 2013: 2014 2013 Cash $ 10,000 $ 15,000 Net accounts receivable 30,000 25,000 Inventory 43,000 40,000 Prepaid expenses 5,000 7,000 Total current assets 88,000 87,000 Total non-current assets 112,000 114,000 Total current liabilities 70,000 60,000 Total non-current liabilities 40,000 45,000 Common shares 60,000 60,000 Retained earnings 30,000 36,000 Net credit sales 370,000 333,000 Cost of goods sold 150,000 160,000 Gross margin 220,000 173,000 Income from.
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141. Adrienne Camm is currently pursuing her accounting degree at Ridge University.  She has        excelled in each of her major courses to date; however, she has always struggled with her        computer classes and with assignments requiring use of computer technology.  Nevertheless,        Adrienne confidently claims that she will.
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11) Following is a comparative balance sheet for Wildfire Corporation: Wildfire Corporation Comparative Balance Sheet December 31, 2014 and 2013 20142013 Current assets: Cash$ 140,000$ 90,000 Short-term investments90,00080,000 Accounts receivable, net350,000220,000 Inventory500,000430,000 Prepaid expenses30,00030,000 Total current assets$1,110,000$ 850,000 Property, plant, and equipment, net750,000500,000 Other assets280,000300,000 Total assets$2,140,000$1,650,000 Current liabilities: Short-term notes payable$650,000$670,000 Accounts payable200,000225,000 Total current liabilities$850,000$895,000 Non-current debt380,000220,000 Total liabilities$1,230,000$1,115,000 Shareholders' equity: Common shares$500,000$500,000 Retained earnings410,00035,000 Total shareholders' equity$ 910,000$535,000 Total liabilities and shareholders'.
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19) Prepare a horizontal analysis of the following comparative income statement for Westwind Corporation. Round percentage changes to the nearest one-tenth percent. Westwind Corporation Comparative Income Statement For the Years Ended December 31, 2014 and 2013 20142013 Total revenue$1,400,000$1,250,000 Expenses: Cost of goods sold$925,000$830,000 Operating expenses313,000280,000 Interest expense14,00012,000 Income tax expense48,30038,000 Total expenses$1,300,300$1,160,000 Net income$99,700$90,000 20) Data for the most recent four fiscal.
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– CHAPTER 12 –SHORT ANSWER QUESTIONS 107. How might the sales and cash collection processes at a Wal-Mart store differ from the sales and   cash collection processes at McDonald’s?  108. Can you think of any procedures in place at McDonald’s that are intended to ensure the        accuracy of your order?  109..
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– CHAPTER 2 – MULTIPLE CHOICE: 33.IT systems have dramatically affected many aspects of business.  Which of the following is not one of the changes? A.Data input into accounting information systems. B.The way that data is processed in the system. C.The accounting information that is reported by the system. D.The outputs of the system. 34.Which of.
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11.   The software market segment for small companies is usually for companies who have less than        $10,000,000 in revenue. 12.    Oracle is considered as a software program for the beginning ERP market. 13.    ERP systems usually don’t allow the user the flexibility to set it up to customize it for their         specific.
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11.              Online processing is the opposite of real-time processing. 12.Batch processing is best suited to sequential access files. 13.Online processing is best suited to sequential access files. 14.Online processing is best suited to situations were there is a large volume of records but only a few records are needed to process any individual.
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53.Special journals are created, or established, to record specific types of transactions.  Which of the following is not one of the special journals? A.Fixed Asset Journal B.Cash Receipts Journal C.Purchases Journal D.Payroll Journal 54.The purpose of this item is to maintain the detailed information regarding routine transactions, with an account established for each entity. A.Purchases Journal B.Subsidiary.
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– CHAPTER 1 – MULTIPLE CHOICE 33.A prescribed sequence of work steps preformed in order to produce a desired result for the organization is called a(n): A.Accounting Information System. B.Business Process. C.Financial Transaction. D.Capital Transaction Process. 34.The process that must identify the transactions to be recorded, capture all the important details of the transactions, properly process.
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144. Business processes are composed of three common stages: an initial event, a beginning, and an        end.  For each of the processes a through h in Problem 47, identify the applicable initial event,        beginning, and end of the process. Student responses may vary as their experiences are likely.
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