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Study Resources (Accounting)

41.When purchasing miscellaneous supplies, companies can reduce costs, improve efficiency, and combat employee fraud by using a)procurement cards. b)a JIT inventory system. c)credit cards. d)debit cards. 42.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.
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11.MRP-II and JIT manufacturing systems both plan production in advance. What is the main difference between these two systems? a)the length of the planning horizon b)JIT uses long-term customer demand for planning purposes c)MRP-II relies on EDI d)There are no differences between the two systems. 12.A master production schedule is.
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61.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)companywide d)expenditure-based 62.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 63.The expenses associated with a product recall are ______ costs. a)prevention b)inspection c)internal.
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41.The __________ procedure for auditing computer process controls uses a hypothetical series of valid and invalid transactions. a)concurrent audit techniques b)test data processing c)integrated test facility d)dual process 42.The auditor uses __________ to continuously monitor the system and collect audit evidence while live data are processed. a)test data processing b)parallel.
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61.The management at Sad Clown Pajamas, an Internet-based wholesaler, is considering a new inventory control system. The current system is inadequate because it results in stockouts that interrupt production and excess stocks of some materials that result in markdowns and high carrying costs. The new system, which will focus on.
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11.The inventory management approach that attempts to minimize, if not eliminate, carrying and stockout costs is a)the materials requirements planning. b)the economic order quantity. c)a just-in-time inventory system. d)There is no such inventory management approach. 12.What aspect below best characterizes a JIT inventory system? a)frequent deliveries of smaller quantities of.
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Chapter 11 MULTIPLE CHOICE 1.In the expenditure cycle, the primary external exchange of information occurs with a)customers. b)suppliers.  c)management. d)the audit committee. 2.Within the expenditure cycle, internal information flows a)from the production cycle to the expenditure cycle. b)from the revenue cycle to the expenditure cycle. c)to the general ledger from the expenditure.
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SHORT ANSWER 72.What is the production cycle.  73.What are the basic activities in a production cycle? 74.Identify and discuss the two documents that are the result of product design activities. 75.What is a master production schedule (MPS)? 76.Define the following: production order, materials requisition, and move ticket. 77.What is CIM? .
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21.Much of the effort spent in an audit entails the collection of evidence.  Verifying the accuracy of certain information, often through communication with certain third parties, is known in the language of the auditor as a)reperformance. b)confirmation. c)substantiation. d)documentation. 22.The evidence collection method that examines all supporting documents to determine.
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61.An expansion of a firm's operations to include production in Russia and China will have the effect of a)increasing inherent risk. b)reducing inherence risk. c)increasing control risk. d)reducing control risk. 62.An increase in the effectiveness of auditing software will have the effect of a)increasing detection risk. b)reducing detection risk. c)increasing control risk. d)reducing control risk. 63.An auditor examines all documents.
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21.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. 22.The accountant's role in the __________ step of production cycle activities is to understand how CIM affects the AIS. a)production operations.
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51.Which control would be best to 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 52.In the expenditure cycle, good control dictates that expenditures.
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31.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. 32.A legal obligation arises at the time goods are received from a supplier.  The objective of accounts payable.
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81.When doing an information systems audit, auditors must review and evaluate the program development process.  What two things could go wrong during the program development process? 82.Briefly describe tests that can be used to detect unauthorized program modifications. 83.What does an auditor examine when performing a detailed analysis of program.
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41.Activity-based costing (ABC) can refine and improve cost allocations using either job-order or process cost systems.  There are three significant differences between ABC and traditional cost accounting approaches. One difference between the two systems is how clearly the results of management activities are measured on overall profitability.  This benefit is.
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51.All of the following edit checks for online editing of accounts receivable transactions would probably be included except a)validity checks on customer and invoice numbers. b)check digit verification on the amount of the sale. c)closed loop verification on the customer name to ensure the proper account is being updated. d)field.
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71.Sad Clown Pajamas is an Internet-based wholesaler. The customer account manager at Sad Clown received a call from the manager at Callow Youth Clothing. The firm was entering bankruptcy liquidation and it was unlikely that they would be able to pay the outstanding balance on their account. The account manager.
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SHORT ANSWER 78.a) Define revenue cycle.  b) What are the basic revenue cycle activities? 79.Explain how validity checks, completeness tests and reasonableness tests can be users to ensure accuracy of customer ordes. 80.What is a CRM system? 81.How can EDI help the billing and account receivable process? 82.How does a company avoid.
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SHORT ANSWER 75.Name the different types of audits. 76.Name the four major stages of all audits. 77.List the types of risk possible when conducting an audit. 78.Explain why the auditor's role in program development and acquisition should be limited. 79.How and to whom does an auditor communicate the audit results? 80.Why.
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41.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 42.When.
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83.What are the two major types of cost accounting systems and what are the differences between the two? 84.Describe five threats to the production cycle and the applicable control procedures used to mitigate each threat. 85.Discuss two measures that can address the threats of inefficiencies and quality controls problems. .
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21.The receiving department has two major responsibilities in connection with the expenditure cycle. Identify one of these responsibilities. a)shipping products most efficiently and at the lowest cost b)deciding if the delivery should be accepted  c)verifying any purchase discounts for the delivery d)deciding on the location where the delivery will be.
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Chapter 9 MULTIPLE CHOICE 1.Which characteristics below is not a characteristic of auditing? a)evidence collection b)establishing audit criteria c)objectivity d)systems development 2.Auditing involves the a)collection, review, and documentation of audit evidence. b)planning and verification of economic events. c)collection of audit evidence and approval of economic events. d)testing, documentation, and certification of audit.
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SHORT ANSWER 69.Identify a fundamental control procedure for protecting that confidentiality of sensitive information. 70.Identify four source data controls. 71.Identify four data entry controls. 72.Identify four processing controls. 73.What is fault tolerance? 74.Define and contrast a recovery point objective and a recovery time objective. .
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ESSAY 75.Identify four useful procedures for controlling access to system outputs. 76.Identify the 10 internationally recognized best practices for protecting the privacy of customers' personal information. 77.Describe some steps you can take to minimize your risk of identify theft. .
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51.There are various costs associated with quality control, or its absence in a production operation.  Such information can help a company determine the effects of actions taken to improve production and identify areas of improvement.  The cost of a product liability claim can be classified as a(n) a)prevention cost. b)inspection.
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51.What is the primary purpose of computer audit software? a)to free the auditor from the attest phase of the audit b)to assist the auditor in reviewing and retrieving information in computer files  c)to look for unauthorized modifications and changes to system program code d)to assist the auditor in reviewing and.
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81.a) What is the major cost driver in the purchasing function?  b) How can information technology be used to control this cost driver? 82.How is the expenditure cycle a "mirror image" of the revenue cycle? 83.What are the possible problems associated with receiving goods ordered from a vendor? 84.Name and.
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CH 12 MULTIPLE CHOICE 1.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.
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31.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.
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11.One type of audit that is concerned with the economical and efficient use of resources and the accomplishment of established goals and objectives corresponds to the fourth and fifth standards set forth by the IIA.  This is known as a(n) __________ audit. a)financial b)information systems c)internal control d)operational or management  .
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31.Using the risk-based auditing approach, when the auditor identifies a control deficiency, the auditor should inquire about a)tests of controls. b)the feasibility of a systems review. c)materiality and inherent risk factors. d)compensating controls. 32.The __________ to auditing provides auditors with a clear understanding of possible errors and irregularities and the related.
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31.With a(n) __________ system, customers pay according to the amount showing on their monthly statement and payments are simply applied against the total account balance. a)closed invoice b)open invoice c)balance forward d)invoice forward 32.In billing systems, the __________ is sent to the customer that summarizes all transactions occurring during a.
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Chapter 10 MULTIPLE CHOICE 1.The credit manager reports to the __________ and the treasurer reports to the __________. a)controller; vice president of finance b)treasurer; controller c)marketing manager; vice president of finance d)treasurer; vice president of finance 2.The revenue cycle is a recurring set of business activities and related information processing operations associated.
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86.What is cycle billing? 87.Poor performance in the area of cash collections is a threat to the business.  What controls can be used to help neutralize this threat? 88.A well-designed AIS should provide adequate controls to ensure that objectives in the revenue cycle are met. What are those objectives? 89.Identify two.
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SHORT ANSWER 76.a) Define expenditure cycle.  b) What are the basic expenditure cycle activities? 77.What is the EOQ approach?  What are the components of EOQ? 78.Define the materials requirement planning (MRP) 79.Define just-in-time (JIT) inventory methods.  80.Briefly discuss the differences among EOQ, MRP, and JIT. .
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11.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 12.A number of edit checks should be performed to ensure that all of the data required to process an order.
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21.Another essential part of the revenue cycle is filling customer orders and shipping merchandise to customers.  Automating warehouse systems cut costs, improve efficiency, and enable more customer-responsive shipments.  The essential element(s) required for an automated perpetual inventory system consist(s) of a)conveyor belts and forklifts b)conveyor belts and forklifts equipped with RFDC c)conveyor.
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