CHAPTER 12

1. Which activity is part of the sales order entry process?

a. setting customer credit limits

b. preparing a bill of lading

c. checking customer credit

d. approving sales returns

2. Which document often accompanies merchandise shipped to a customer?

a. picking ticket

c. credit memo /

b. packing slip

d. sales order

3. Which method is most likely used when a company offers customers discounts for prompt payment? .

a. open-invoice method

c, accounts receivable aging method

b. balance-forward method

d. cycle billing method

4. Which of the following techniques is the most efficient way to process customer pa)ments and update
accounts receivable?

a. BET .

c. FED

b. CRM

d. ACH
5. Which of the following revenue cycle activities can potentially be eliminated by technology?

a. sales order entry /

c. billing

b. shipping

d. cash collections

6. The integrated database underlying an ERP system results in which of the following general threats to
the revenue cycle?

a. inaccurate or invalid master data

b. unauthorized disclosure of sensitive information

c. loss or destruction of data .

d. all of the above

7. Which document is used to authorize the release of merchandise from inventory control (warehouse)
to shipping? .

a. picking ticket

c. shipping order

b. packing slip

d. sales invoice

8. Which of the following provides a means both to improve the efficiency of processing customer
payments and also to enhance control over those payments?

a. CRM

c. aging accounts receivable

b. lockboxes

d. EDI
9. For good internal control, who should approve credit memos?

a. credit manager

c. billing manager

b. sales manager

d. controller

10. For good internal control over customer remittances, the mailroom clerk should sepal‘ate the checks
from the remittance advices and send the customer payments to which department? a. billing

c. cashier

b. accounts receivable

d. sales

CHAPTER 13

1. which of the following inventory control methods is most likely to be used for a product such as
lumber (1 x 2's, 2 x 4's, etc.) for which sales can reliably forecast?

a. JIT

b. EOQ

c. MRP

d. ABC

2. Which of the following matches is performed in evaluated receipt settlement (ERS)?

a. the vendor invoice with the receiving report

b. the purchase order with the receiving report

c. the vendor invoice with the purchase order

d. the vendor invoice, the receiving report, and the purchase order
3 Which of the following is true?

a. ERS systems involve a three-way match of purchase orders, receiving reports, and supplier invoices.

b. Setting up petty cash as an imprest fund violates segregation of duties.

c. The EOQ formula is used to identify when to reorder inventory

d. A voucher package usually includes a debit memo.

4. Which document is used to establish a contract for the purchase of goods or services from a supplier?

a. vendor invoice

c. purchase order

b. purchase requisition

d. disbursement voucher

5. Which method would provide the greatest efficiency improvements for the purchase of noninventory
items such as miscellaneous office supplies?

a. bar-coding

c. procurement cards

b. EDI

d. EFT

6 Which of the following expenditure cycle activities can be eliminated through the use of IT or
reengineering?

a. ordering goods

c. receiving goods

b. approving vendor invoices

d. cash disbursements
7. What is the best control procedure to prevent paying the same invoice twice?

a. Segregate check-preparation and check-signing functions.

b. Prepare checks only for invoices that have been matched to receiving reports and purchase orders.

c. Require two signatures on all checks above a certain limit.

d. Cancel all supporting documents when the check is signed.

8. For good internal control, who should sign checks?

a. cashier

c. purchasing agent

b. accounts payable

d. controller

9. Which of the following procedures is designed to prevent the purchasing agent from receiving
kickbacks?

a. maintaining a list of approved suppliers and requiring all purchases to be made from suppliers on that
list

b. requiring purchasing agents to disclose any tinancial investments in potential suppliers

c. requiring approval of all purchase orders

d. prenumbering and periodically accounting for all purchase orders

10. Which document is used to record adjustments to accounts payable based on the return 0f
unacceptable inventory to the supplier?

a. receiving report

c. debit memo

b. credit memo

d. purchase order
CHAPTER 14

1. Most costs are locked in at which stage in the production cycle?

a. product design

c. production operations

b. production planning

d. cost accounting

2. Which of the following is an advantage of bar-coding over RFID?

a. speed

c. cost

b. accuracy

d. safety

3. Which document lists the components needed to manufacture a specific product? a. operations list

c. bill of materials

b. master production schedule

d. production order

4. Which document captures information about labor used in production?

a. move ticket

c. operations list

b. job-time ticket

d. bill of materials

5. An increase in which component of quality costs is most likely to result in a decrease in the other
three components?
a. prevention costs

c. internal failure costs

b. inspection costs

d. external failure costs

6. Activity-based costing can be used to refine which of the following?

a. job-order costing

c. both job-order and process costing

b. process costing

d. neither job-order nor process costing

7. Which system is most likely to be used by a company that mass-produces large batches of standard
items in anticipation of customer demand?

a. MRP-II

c. activity-based costing

b. lean manufacturing

d. throughput

8. The development of an MPS would be most effective in preventing which of the following threats?

a. recording and posting errors

c. productlon of poor-quality goods

b. loss of inventory

d. excess production

9. Which control procedure is probably least effective in reducing the threat of inventory loss?

a. limiting physical access to inventory

b. documenting all transfers of inventory Within the company

c. regular materials usage reports that highlighy variances from standards

d. periodically counting inventory and investigating any discrepancies between those counts and
recorded amounts

10. what is the number of good units produced in a given period of time called?

a. productive capacity

b. productive processing time

c. yield

d. throughput

CHAPTER 15

1. Traditionally, accountants have been most involved with which portion of the HRM/ payroll cycle?

a. hiring

c. training

b. payroll

d. performance evaluation

2. Which of the following statements is true?

a. Financial statements repon the value of employee knowledge and skills.

b. Turnover and absenteeism are costly.

c. All employees must fill out time cards.

d. Default configurations of ERP packages typically provide good segregation 0f duties.

3. Which document lists the current amount and year-to-date totals of gross pay, deductions, and net
pay for one employee?
a. payroll register

c. paycheck

b. time card

d. earnings statement

4. Online processing is most useful for which of these tasks?

a. preparing payroll checks

b. reconciling job-time tickets and time cards

c. paying payroll tax obligations

d. making changes in employee benefit choices

5. Use of a payroll service bureau or a PEO provides which of the following benefits? a. fewer staff
needed to process payroll

b. lower cost of processing payroll

c. less need for deve10ping and maintaining payroll tax expertise

d. all of the above

6. Which control procedure would be most effective in detecting the failure to prepare a paycheck for a
new employee before paychecks are distributed?

a. validity checks on the employee number on each time card

b. record counts of time cards submitted and time cards processed

c. zero-balance check

d. use of a separate payroll bank account

7. Which department should have responsibility for authorizing pay-rate changes?

a. timekeeping
c. HRM

b. payroll

d. accounting

8. To maximize effectiveness of internal controls over payroll, which of the following persons should be
responsible for distributing employee paychecks?

a. departmental secretary

b. controller

c. payroll clerk

d. departmental supervisor

9. where should unclaimed paychecks be returned?

a. HRM department

b. cashier

c. payroll department

d. absent employee's supervisor

10. whcih of the following is an important supporting document to authorize the transfer of funds to the
payroll bank account?

a. earnings statement

b. time card

c. payroll register

d. W-2 form

CHAPTER 16

1. From where do adjusting entries usually come?

a. treasurer

b. controller

c. various accounting cycle subsystems, such as sales order entry

d. unit managers

2. Preparing performance reports that contain data only about items that a specific organizational unit
controls is an example of which of the following?

a. flexible budget system

c. closing the books

b. responsibility accounting system

d. management by exception

3. The definition of an XBRL element, including such information as whether its normal account balance
is a debit or a credit, is found in which of the following?

a. linkbase

c. schema

b. instance document

d. style sheet

4. Which of the following shows the implied linkages among the portions of the balanced scorecard?

a. Financial --> Internal --> Innovation and learning --> Customer

b. Innovation and learning --> Internal --> Customer --> Financial

c. Customer ~-> Financial -> Internal --> Innovation and learning

d. Internal --> Customer --> Innovation and learning --> Financial

5. Which of the following XBRL documents contains the actual data values for a company’s net income
for a particular year?
a. style sheets

c. linkbases

b. schema

d. instance document

6. The number of orders shipped per warehouse worker each day is a metric that would most likely
appear in which part of the balanced scorecard?

a. innovation and learning

c. internal operations

b. customer

d. financial

7. Which of the following is an important part of the audit trail?

a. journal vouchers

c. trial balance

b. flexible budgets

d. data warehouse

8. An adjusting journal entry to record interest revenue that has been earned but not yet received is an
example of which of the following?

a. accrual

c. estimate

b. deferral

d. revaluation

9. Which of the following is designed primarily to improve the efficiency of financial reporting?
a. XML

c. IFRS

b. XBRL

d. the balanced scorecard

10. Which of the following graph design principles is most important for ensuring that financial data are
accurately interpreted?

a. including a title that summarizes the point of the graph

b. attaching data values to specific elements in the graph

c. starting the y-axis of the graph at zero

d. using different colors for different variables