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Chapter 8—General Ledger, Financial Reporting, and Management Reporting Systems TRUE/FALSE 1.The most common means of making entries in the general ledger is via the journal voucher. 2.Individuals with access authority to general ledger accounts should not prepare journal vouchers. 3.The journal voucher is the document that authorizes entries to be made to the general.
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11.Where does the responsibility lie for reconciling the labor distribution summary and the payroll disbursement voucher? a.cash disbursements b.cost accounting c.personnel d.general ledger 12.Which of the following statements is not true? a.Routine payroll processing begins with the submission of time cards. b.Payroll clerks must verify the hours reported on the time cards. c.Payroll reconciles personnel action forms with.
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11.Inventory control performs all of the following tasks except it a.provides production planning and control with the inventory status report of finished goods b.updates the raw material inventory records c.prepares a materials requisition for each production batch d.records the completed production as an increase to finished goods inventory 12.The storekeeper releases raw materials based on.
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ESSAY 1.Itemize the disadvantages of ABC that have cause some firms to abandon this technique. 2.Contrast the treatment of inventories in the traditional manufacturing environment and the lean manufacturing environment. 3.Discuss the key segregation of duties that should exist in the traditional manufacturing environment. .
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ESSAY 1.Differentiate between a purchase requisition and a purchase order. 2.What general ledger journal entries are triggered by the purchases system? From which departments do these journal entries arise? 3.The Soap Manufacturing Company has three employees who work in the warehouse. All of the warehouse workers are authorized to order inventory when it.
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11.Which statement is not correct? a.the post-closing trial balance reports the ending balance of each account in the general ledger b.one purpose of preparing the unadjusted trial balance is to ensure that debits equal credits c.financial statements are prepared based on the unadjusted trial balance d.the unadjusted trial balance reports control account balances but.
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MULTIPLE CHOICE 1.The document that captures the total amount of time that individual workers spend on each production job is called a a.time card b.job ticket c.personnel action form d.labor distribution form 2.An important reconciliation in the payroll system is a.general ledger compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable b.personnel.
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MULTIPLE CHOICE 1.All of the following are basic data management tasks except a.data deletion b.data storage c.data attribution d.data retrieval 2.The task of searching the database to locate a stored record for processing is called a.data deletion b.data storage c.data attribution d.data retrieval 3.Which of the following is not a problem usually associated with the flat-file approach to data management? a.data redundancy b.restricting.
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11.One benefit of the Management Reporting System is that it can alert management to delays in project implementation. 12.Responsibility refers to an individual’s obligation to achieve desired results. 13.A firm with a wide span of control tends to have relatively more layers of management. 14.The control function entails evaluating a process against a.
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6.What are the major exposures in the general ledger/financial reporting system? 7.Why is the audit trail necessary? 8.The _______________________________ principle suggests that management should structure the firm around the work it performs rather than around individuals with unique skills. 9.Employees who are responsible for a task must have the __________________________ to make decisions.
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6.What is one benefit of the flexible production system? 7.List two disadvantages of using a traditional cost accounting system. 8.In Activity Based Costing, what is the term used to refer to the work performed by a firm? 9.Discuss inventory control objectives. .When should inventory be purchased? 2.How much inventory should be purchased? PTS:1 10.Describe the primary goal.
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SHORT ANSWER 1.List, in order, the steps in the Financial Accounting Process. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 2.List two duties that the general ledger clerk should not perform. 3.Explain the purpose and contents of the general ledger master file. 4.Explain two types of coding schemes and give examples of their use. 5.Why do many firms no longer use a general.
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16.Explain the three types of responsibility centers. 17.Describe at least three characteristics of strategic planning decisions and their information requirements. 18.What three elements must be present for a problem to be “structured?” 19.How does management by exception help to alleviate information overload by a manager? 20.What is a data warehouse? .
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16.Explain the purpose of each of the following documents used in the payroll system: the personnel action form, the job ticket, the time card. 17.How do fixed asset systems differ from the expenditure cycle? 18.What is recorded by the asset maintenance part of the Fixed Asset System? 19.How are the following carried out in.
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Chapter 9—Database Management Systems TRUE/FALSE 1.The database approach to data management is sometimes called the flat file approach. 2.The Database Management System provides a controlled environment for accessing the database. 3.To the user, data processing procedures for routine transactions, such as entering sales orders, appear to be identical in the database environment and in.
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31.Deficiencies of the traditional cost accounting information system include all of the following except a.an emphasis on financial performance b.inaccurate cost allocations c.an emphasis on standard costs d.immediate feedback about deviations from the norm 32.Which statement is not correct? a.cost objects are the reasons for performing activities b.cost object describes the work performed in a firm c.activities cause.
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21.The personnel action form provides authorization control by a.preventing paychecks for terminated employees b.verifying pay rates for employees c.informing payroll of new hires d.all of the above 22.Accounting records that provide the audit trail for payroll include all of the following except a.time cards b.job tickets c.payroll register d.accounts payable register 23.Personnel actions forms are used to do all of.
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11.Typically the only allocated cost in the value stream is a charge per square foot for the value stream production facility. 12.Computer Integrated Manufacturing focuses on reducing the complexity of the physical manufacturing layout of the shop floor. 13.The only objective of the Just-In-Time philosophy is to reduce inventory levels. 14.Accounting in a.
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21.Which statement is not true? The manager’s span of control a.is narrow for routine and repetitive tasks b.is related to the number of layers of management c.affects the amount of detail provided to a manager d.can affect employee morale and motivation 22.Short-range planning involves a.setting goals and objectives of the firm b.planning the production schedule for the.
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11.Ideally, payroll checks are written on a special bank account used only for payroll. 12.The supervisor is the best person to determine the existence of a “phantom employee” and should distribute paychecks. 13.Payroll processing can be automated easily because accounting for payroll is very simple. 14.Timekeeping is part of the personnel function. 15.Fixed asset.
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4.How does a voucher payable system work? What documents are reconciled? Who prepares the voucher? How is the A/P balance determined? How does the voucher payable system improve control over cash? 5.Before authorizing payment for goods purchased, accounts payable reconciles three documents related to the purchase. Name them and explain what.
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21.Which situation violates the segregation of functions control procedure? a.production planning and control is located apart from the work centers b.inventory control maintains custody of inventory items c.cost accounting has custody of and makes entries on cost records d.work centers record direct labor on job tickets 22.All of the following are internal control procedures that.
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31.A fundamental principle of responsibility accounting is that a.managers are accountable only for items they control b.a manager’s span of control should not exceed eight people c.structured reports should be prepared weekly d.the information flow is in one direction, top-down 32.Which statement is not true? Responsibility accounting a.involves both a top-down and bottom-up flow of information b.acknowledges.
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SHORT ANSWER 1.Describe an internal control procedure that would prevent an employee from punching the time clock for another, absent employee. 2.Why should the employee’s supervisor not distribute paychecks? 3.Describe an internal control procedure that would prevent a supervisor from stealing the unclaimed paychecks of employees who have been terminated. 4.Why should employee paychecks.
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21.An ER diagram is a graphical representation of a data model. 22.The term occurrence is used to describe the number of attributes or fields pertaining to a specific entity. 23.Cardinality describes the number of possible occurrences in one table that are associated with a single occurrence in a related table. 24.A table in.
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4.The Baccus Corp. manufactures medical equipment. This is a capital intensive industry and investments in fixed assets exceed $5 million a year. The minimum cost for production equipment is $75,000. When supervisors want new production machinery, they contact the plant manager. The plant manager approves or denies the request based.
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31.Depreciation a.assures that assets are reported at fair market value b.is discretionary for many firms c.allocates the cost of an asset over its useful life d.is the responsibility of the department using the asset 32.The Fixed Asset System is similar to the expenditure cycle except a.fixed asset transactions are non-routine and require special authorization and controls b.fixed.
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11.Describe an internal control that would prevent an employee from stealing a computer and then reporting it as scrapped. 12.Describe an internal control that would prevent the payment of insurance premiums on an automobile that is no longer owned by the company. 13.Describe an internal control that would prevent the charging of.
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16.Differentiate between essential and non-essential activities. 17.What is a company’s value stream? 18.What document signals the completion of the production process? 19.What document triggers the beginning of the cost accounting process for a given production run? 20.Name five documents associated with batch production systems. .
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3.Many financial reports produced by organizations are nondiscretionary–publicly traded firms have no choice but to prepare income statements, tax returns, etc. Applications that are part of the management reporting system are discretionary–they are optional. How does this characteristic affect the system? 4.There are two basic types of management reports–programmed and ad.
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Chapter 6—The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures TRUE/FALSE 1.Time cards are used by cost accounting to allocate direct labor charges to work in process. 2.The personnel department authorizes changes in employee pay rates. 3.Most payroll systems for mid-size firms use real-time data processing. 4.To improve internal control, paychecks should be.
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Chapter 7—The Conversion Cycle TRUE/FALSE 1.The philosophy of customer satisfaction permeates the world-class firm. 2.Reports generated by the cost accounting system include performance reports and budget reports. 3.The cost accounting system authorizes the release of raw materials into production. 4.Batch processing creates a homogeneous product through a continuous series of standard procedures. 5.The bill of materials.
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7.How does the procedure for determining inventory requirements differ between a basic batch processing system and batch processing with real-time data input of sales and receipts of inventory? What about for the procedures used by the receiving department? 8.What are the key segregation of duties issues in purchasing and cash disbursements? 9.Supervision.
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11.Data normalization groups data attributes into tables in accordance with specific design objectives. 12.Under the database approach, data is viewed as proprietary or “owned” by users. 13.The data dictionary describes all of the data elements in the database. 14.A join builds a new table by creating links. 15.The deletion anomaly is the least important.
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10.Discuss three common problems associated with inventories. 11.Automation is at the heart of the lean manufacturing philosophy. Discuss its stages and its distinguishing features. 12.How can a firm control against excessive quantities of raw materials being used in the manufacturing process. 13.Explain the relationship between MRP, MRPII and ERP. .
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6.What is the implication for the Management Reporting System of an organization that implements the formalization of tasks principle? 7.What are the reasons the companies use coding schemes in their accounting information systems? 8.Compare and contrast the relative advantages and disadvantages of sequential, block, group, alphabetic and mnemonic codes. .
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11.The difference between the actual performance and the standard is called the __________________________. 12.How does the Management by Exception principle affect the Management Reporting System? 13.For reports to be useful they must have information content. Describe a reporting objective which gives reports information content. 14.What is information overload? How does it affect decision-making? 15.Explain.
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ESSAY 1.The Golf Club Company makes custom golf clubs. The manufacturing supervisor interviews people who have specialized manufacturing skills, and he informs payroll when an employee is hired. The employees use a time clock to record the hours they work. The employees are also required to keep a record of the.
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MULTIPLE CHOICE 1.Which statement is true? a.World-class companies must maintain strategic agility and be able to turn on a dime. b.World-class companies motivate and treat employees like appreciating assets. c.Manufacturing firms that achieve world-class status do so by following a philosophy of lean manufacturing d.All the above are true 2.Which function is not a.
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MULTIPLE CHOICE 1.The coding scheme most appropriate for a chart of accounts is a.sequential code b.block code c.group code d.mnemonic code 2.A common use for sequential coding is a.creating the chart of accounts b.identifying inventory items c.identifying documents d.identifying fixed assets 3.The most important advantage of sequential coding is that a.missing or unrecorded documents can be identified b.the code itself lacks informational content c.items.
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14.Explain how CAD can contribute to a firm’s move toward world-class status. 15.Explain how CAM can contribute to a firm’s move toward world-class status. 16.Explain why traditional cost allocation methods fail in a CIM environment. 17.What is meant by the term “product family” and what is its relationship to value stream accounting. .
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SHORT ANSWER 1.Which type of manufacturing creates a homogeneous product through a continuous series of standard procedures? 2.What information is contained in the bill of materials (BOM)? 3.What is the difference between a materials requisition and a purchase requisition? 4.List one authorization control in the traditional manufacturing environment. 5.Explain the conversion cycle. .
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11.What is meant by the term "islands of technology"? 12.In a traditional manufacturing environment, cost accounting provides independent verification of what information? What are the benefits? 13.How are cost structures fundamentally different between the traditional and CIM environments? 14.What are the key segregation of duties issues in the conversion cycle? 15.Traditional accounting assumes that.
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