TRUE/FALSE
1. The GL/BR process is an interacting structure of people, equipment, methods, and controls that is designed to accomplish both operations and information system functions.
ANS: T
2. The business reporting process comprises accumulating, classifying, and recording data, fueling the financial reporting, business reporting, and other reporting subsystems..
ANS: F
3. The general ledger process is concerned with preparing external financial statements, ensuring they conform to GAAP, generating Web-based forms of key financial statement and related business reporting via the Internet, and supporting the generation of both ad hoc and predetermined business reports.
ANS: F
4. A feeder process is any business process that accumulates event data that is then communicated to and processed by the general ledger/financial reporting (GL/BR) process.
ANS: T
5. The managerial reporting officer is responsible for reporting GAAP financial statements.
ANS: F
6. The financial reporting officer is primarily responsible for budgeting.
ANS: F
7. The controller notifies the business reporting process of investing and financing transaction activities
ANS: F
ANS: T
9. A performance report compares actual results with budgeted expectations.
ANS: T
10. Often, performance reports are part of a managerial reporting system known as a responsibility accounting system. ANS: T
11. A journal voucher is an internal source document used to notify the general ledger to make an accounting entry. ANS: T
12. The general ledger master data contains summarized information of all company event data.
ANS: T
13. An audit trail provides the linkages necessary to trace financial transactions forward through the general ledger/financial reporting (GL/BR) process. ANS: F
14. The ordering of items in descending order, where each successive rank order is subordinate to the rank above is known as numerical coding.
ANS: F
15. The National Automated Accounting Research Service (NAARS) is an example of a public database service. ANS: T
16. Balanced scorecard is methodology for assessing an organization's business performance via four components: (1) financial, (2) external business process, (3) vendors, and (4) innovation and improvement activities.
ANS: F
facilitate complex analyses of data warehouses by managers and decision makers.
ANS: T
18. XML is an XBRL-based language consisting of a set of tags that are used to unify the presentation of business reporting information into a single format that can be easily read by almost any software package and can be easily searched by web browsers.
ANS: F
19. XML is a generic web-based language that works on a set of user-defined tags to determine the presentation of
information on a web site and to provide a key to the tags that can be applied by web users to easily search a given site. ANS: T
20. Situations where two or more personal computer network users try to access the same information resources simultaneously are described as network contention or concurrency.
ANS: T
21. Call-up procedures are often used to authenticate the identity of users who access a network from remote locations through dial-in ports.
ANS: F
22. A diskless workstation contains no disk drive so no data can be written to floppy disks.
ANS: T
23. A network computer is one that consists of a processor and a connection to the server, but it has no storage capability within itself.
ANS: T
24. System access logs include reports of invalid access attempts. ANS: T
25. The intent of Sarbanes Oxley is to protect the company by improving the accuracy and reliability of all disclosures. ANS: F
MULTIPLE CHOICE
1. The general ledger process comprises all of the following except:
a. providing information for financial reporting b. serving the needs of managerial reporting c. classifying data by general ledger accounts d. none of the above
ANS: D
2. The business reporting process comprises all of the following except:
a. preparing general purpose external financial statements
b. generating ad hoc and predetermined business reports for management c. ensuring that the external financial statements adhere to GAAP d. none of the above
ANS: D
3. In contrast to the managerial reporting process, the financial reporting process prepares all of the following financial statements except:
a. the balance sheet b. the income statement
c. the standard costing variance report d. the statement of owner equity changes ANS: C
4. Typically, you would expect general ledger updates for financing and investing activities to be fed to the general ledger/financial reporting (GL/BR) process by:
a. the controller b. the treasurer
c. the chief executive officer (CEO) d. one of the AIS feeder systems ANS: B
5. Typically, you would expect general ledger updates for periodic adjusting entries (e.g., for depreciation, accruals, and the like) to be fed to the general ledger/financial reporting (GL/BR) process by:
a. the controller
b. the treasurer
c. the chief executive officer (CEO) d. one of the AIS feeder systems ANS: A
6. Which of the following individuals should possess the greatest knowledge of GAAP?
a. general ledger accounting department manager b. budgeting department manager
c. financial reporting officer d. managerial reporting officer ANS: C
7. Which of the following usually would be responsible for preparing operating center budgets?
a. general ledger accounting department b. budgeting department
c. financial reporting officer d. operating department managers ANS: D
8. Which of the following usually would be responsible for preparing operating center performance reports? a. general ledger accounting department b. budgeting department
c. financial reporting officer d. managerial reporting officer ANS: D
9. Normally, you would expect that operating event data updates would be sent to the general ledger/business reporting (GL/BR) process by:
a. the controller b. the treasurer
c. the vice president of finance d. various business feeder processes ANS: D
10. Performance reports to various cost center, profit center, and investment center managers are usually sent by?
a. the controller b. the treasurer
c. the managerial reporting officer d. the budgeting department ANS: C
11. Actual and budgeted figures are usually sent to the managerial reporting officer by
a. the controller b. the treasurer
c. the business reporting department d. the budgeting department ANS: C
12. Actual and budgeted figures are usually sent to the budgeting department from
a. the controller b. the treasurer
c. the business reporting department d. the managerial reporting officer ANS: C
13. Adjusted trial balance figures are usually sent from the business reporting department to the:
a. the financial reporting officer b. the managerial reporting officer c. the business reporting department d. the budgeting department ANS: A
14. Which of the following has responsibilities and expertise to preparing internal reports:
a. the financial reporting officer b. the managerial reporting officer c. the business reporting department d. the budgeting department ANS: B
15. Finalized budget figures are sent to the business reporting department by
a. the financial reporting officer b. the budgeting department c. the business reporting department d. the managerial reporting officer
ANS: B
16. Although the controller usually provides adjustments as mandated by GAAP, who else might provide adjusting entry data?
a. the financial reporting officer b. the budgeting department c. the business reporting department d. none of the above
ANS: A
17. Which of the following advises and assists the cost center, profit center, and investment center managers in preparing the budget?
a. the financial reporting officer b. the budgeting department c. the business reporting department d. none of the above
ANS: B
18. Which of the following could be a journal voucher? a. general ledger cash disbursements update b. customer invoice
c. receiving report d. purchase requisition ANS: A
19. Which of the following statements related to journal vouchers is false for most ERP systems?
a. The person completing the adjustment will enter it directly into the computer. b. The voucher will be electronic.
c. Business event updates from feeder systems may take the form of a journal voucher.
d. To provide an adequate audit trail, a printed copy of journal vouchers is required to capture the signature of the person making the entry.
ANS: D
20. Which of the following is most related to vertical information flow in the GL/BR process?
a. treasury's financing functions
b. payroll c. order entry/sales d. budgeting ANS: D
21. Which of the following is least likely to be part of the relevant environment of the general ledger/business reporting (GL/BR) process?
a. the order entry/sales process
b. the billing/accounts receivable/cash receipts process c. the purchasing/accounts payable/cash disbursements process d. the inventory process
ANS: D
22. Inputs to a general ledger/business reporting (GL/BR) process typically include all of the following except: a. adjusting entry journal voucher
b. adjusted trial balance c. finalized budget
d. GAAP-based financial statements ANS: D
23. In a logical DFD for the general ledger/business reporting (GL/BR) process, which of the following processes normally would not update the general ledger master data?
a. Record budget. b. Post events data c. Record adjustments. d. Prepare financial statements. ANS: D
24. The general ledger master data does not contain: a. adjusting entry data
b. customer number
c. totals extracted by event type from business event data d. a chart of accounts
ANS: B
25. Tracing back to individual business events that have been aggregated into account balances is done by means of a(n): a. electronic reference service
b. general ledger account c. audit trail
d. data dictionary ANS: C
26. The coding system typically used in the general ledger chart of accounts is: a. serial coding b. hierarchical coding c. block coding d. mnemonic coding ANS: B
27. An account in the chart of accounts has the number 1113. Which of the following does the 3 likely represent? a. assets
b. current assets c. cash accounts d. cash in bank ANS: D
28. An account in the chart of accounts has the number 7111. Which of the following does the 7 likely represent? a. revenues
b. sales region c. merchandise sales d. golf merchandise sales ANS: A
29. Which of the following items is not one of the four components of the balanced scoreboard methodology? a. customers
b. financial
c. competitive environment d. internal business processes ANS: C
30. Which of the following statements related to eXtensible markup language is false?
a. XBRL provides uniformity for users of financial statement and other business reporting information in order to simplify delivery of the information via the web.
b. XBRL is was created by SAP and is available for download free of charge via the web. c. XBRL enables users to download information to other software packages.
d. XBRL is being incorporated into new versions of ERP software. ANS: B
31. When comparing a multiuser personal computer network with stand alone personal computers, the most important control issue related to the network is:
a. physical protection of the equipment b. minimizing the cost of redundant software
c. ensuring the validity of users d. providing adequate training of users ANS: C
32. Control plans for a networked multiuser environment address all of the following issues except:
a. physical protection of the equipment and data b. minimizing the cost of add on modules c. ensuring the validity of users
d. how to recover from a system failure ANS: B
33. An organization is concerned about authenticating the identify of users who access the network from remote locations through dial-in ports. The best defense against unauthorized access is to utilize a(n):
a. password b. automatic log-out c. call-back procedure d. encryption ANS: C
34. A diskless workstation has all of the following capabilities except:
a. doing mathematical calculations b. writing to a floppy disk c. printing a report or other output
d. downloading data from a central database ANS: B
35. A network computer workstation has all of the following capabilities except:
a. doing mathematical calculations b. printing reports
c. saving to a hard disk
d. downloading data from a central database ANS: C
36. The personal computer networking term that refers to obtaining data from a host computer's database is: a. file server
b. network operating software c. downloading
d. front-end machine ANS: C
37. A control procedure for workstation networks that includes reports of invalid access attempts is called:
a. file and record locking b. password protection c. call-back procedures d. system access logs ANS: D
38. The intent of the Sarbanes Oxley Act is:
a. to protect investors by improving the accuracy and reliability of corporate disclosures b. to improve GAAP
c. to increase the speed of disclosures d. to strengthen the internal audit department ANS: A
39. Which of the following control plans is directed at resolving contention between two network users?
a. call-back procedures b. diskless workstations c. file and record locking d. system access logs ANS: C
40. What is the least effective method of ensuring that invalid users of an ERP can not download usable data files to a floppy disk. a. network computers b. diskless workstations c. encryption d. password ANS: D COMPLETION
1. The is an interacting structure of people, equipment, methods, and controls that is designed to accomplish both operations and information system functions with the purpose of generating accounting and other reports.
ANS: general ledger and business reporting process (GL/BR)
2. The comprises accumulating, classifying, and recording data, fueling the financial reporting, business reporting, and other reporting subsystems..
ANS: general ledger process
3. The is concerned with preparing external financial statements, ensuring they conform to GAAP, generating Web-based forms of key financial statement and related business reporting via the Internet, and supporting the generation of both ad hoc and predetermined business reports.
ANS: business reporting process
4. A(n) ____________________ process is any business process that accumulates event data that is then communicated to and processed by the general ledger/financial reporting (GL/BR) process. ANS: feeder
5. The ____________________ officer possesses expertise in generally accepted accounting principles.
ANS: financial reporting
6. The ____________________ officer possesses expertise in preparing internal management reports.
ANS: managerial reporting
7. The ____________________ notifies the business reporting process of investing and financing transaction activities ANS: treasurer
8. The ____________________ is a list of all the accounts in the general ledger.
ANS: chart of accounts
9. A(n) ____________________ report compares actual results with budgeted expectations.
ANS: performance or variance
10. Often, performance reports are part of a managerial reporting system known as a(n) ____________________ system.
ANS: responsibility accounting (reporting)
11. A(n) ____________________ is an internal source document used to notify the general ledger to make an accounting entry.
ANS: journal voucher
12. The _______________ data contains summarized information of all company event data.
ANS: general ledger master
13. A(n) ____________________ provides the linkages necessary to trace financial transactions backward or forward through the general ledger/financial reporting (GL/BR) process.
ANS: audit trail
14. The ordering of items in descending order, where each successive rank order is subordinate to the rank above is known as ____________ coding.
ANS: hierarchical
15. The National Automated Accounting Research Service (NAARS) is an example of a(n) ____________________ service.
ANS: public database
16. is methodology for assessing an organization's business performance via four components: (1) financial, (2) internal business process, (3) customers, and (4) innovation and improvement activities.
ANS: Balanced scorecard
17. is the integration of statistical and analytical tools with decision support technologies to facilitate complex analyses of data warehouses by managers and decision makers. ANS: Business intelligence
18. is an XML-based language consisting of a set of tags that are used to unify the presentation of business reporting information into a single format.
ANS: eXtensible Business Reporting Language (XBRL)
19. is a generic web-based language that works on a set of user-defined tags to determine the presentation of information on a web site and to provide a key to the tags that can be applied by web users to easily search a given site.
ANS: eXtensible Markup Language (XML)
20. Situations where two or more personal computer network users try to access the same information resources simultaneously are described as network ____________________.
ANS: contention (or concurrency)
21. ____________________ are often used to authenticate the identity of users who access a network by requiring the user to type in a specific combination of letters and/or numbers . ANS: Passwords
22. A(n) ____________________ contains no disk drive to enable the writing of data to floppy disks.
ANS: diskless workstation
23. A(n) ____________________ computer is one that consists of a processor and a connection to the server, but it has no storage capability within itself.
ANS: network
24. ________________ include(s) reports of invalid access attempts.
ANS: System access logs
25. The intent of _____________________ is to protect investors by improving the accuracy and reliability of corporate disclosures.
ANS: Sarbanes Oxley
Chapter 15—Integrated Production Processes (IPP)
TRUE/FALSE
1. Production systems facilitate integration of all aspects of product design, marketing, and manufacturing.
ANS: F
2. Product life cycle management systems are add-ons or additional ERP modules that organize data by product, including design, manufacturing specifications, quality, and warranty performance.
ANS: T
3. Cycle time is the time it takes from when authorization is made for goods to be produced to when the goods are completed.
ANS: F
4. In the pull approach to manufacturing, the sales forecast drives the production plan and goods are produced in large batches.
ANS: F
5. Theoretically, in the push approach to manufacturing, each batch or job consists of one unit.
ANS: F
6. With the pull approach to manufacturing, factory machinery is arranged in clusters or cells.
ANS: T
7. Supply chain management software provides available to promise planning and capable to promise planning. ANS: T
8. A process costing system attempts to assign costs to products based on the amount of service operations, such as purchase order preparation, material handling, storage time, wait time, and other nonvalue-added processes, that the products consume.
ANS: F
9. A cost driver is one of the main factors influencing total cost. ANS: T
10. Lifecycle costs are the sum of costs to design, produce, market, deliver, and support a product from conception to ultimate discontinuance.
11. A supply chain is a sequence of activities performed by an organization that add value or utility to the product produced or service rendered.
ANS: F
12. The computer technology application that automates the product design process, including but not limited to the functions of geometric modeling, materials stress and strain analysis, drafting, storing product specifications, and mechanical simulation of a product's performance, is called CAD/CAE.
ANS: T
13. The inventory production schedule is a set of specific production goals developed from forecasts of demand, actual sales orders, and/or inventory information.
ANS: F
14. MRP is a process that uses bills of material, raw material and WIP inventory status data, open order data, and the master production schedule to calculate a time-phased order requirements schedule for materials and subassemblies. ANS: T
15. Continuous inventory management is an inventory management approach where inventory needs and inventory production capabilities are matched across the entire global enterprise
ANS: F
16. Capacity requirements planning is the process that uses the information from the master production schedule and the time-phased order requirements schedule to develop detailed machine and labor utilization schedule based on available capacity.
ANS: T
17. Purchase orders convey authority for the manufacture of a specified product or subassembly in specified quantity and describe the material, labor, and machine requirements for the job.
ANS: F
18. MRP is an integrated decision support system for planning, executing, and controlling manufacturing operations
ANS: T
19. JIT is a manufacturing philosophy or business strategy for designing production systems that are more responsive to precisely timed customer delivery requirements. ANS: T
20. An assembly line manufacturing system is a highly automated computer integrated manufacturing system that has its goal of achieving the ability to quickly produce wide varieties of products using the same equipment.
ANS: F
21. Computer aided manufacturing is the application of computer and communications technology to improve productivity by linking computer numerical control (CNC) machines, monitoring production, and providing automatic feedback to control operations.
ANS: T
22. Computer aided process planning is an automated decision support system that generates manufacturing operations instructions and routings based on information about machining requirements and machine capabilities. ANS: T
23. An automated storage and retrieval system is one type of automated materials handling system that typically is a computer-based cart system capable of delivering parts and tools among multiple work centers.
ANS: F
24. The automated storage and retrieval system is a computer-based system for storing and retrieving parts and tools. ANS: T
25. The financial accounting system is concerned with the flow of costs through the factory.
ANS: F
26. A bill of material contains the standard material quantities that are required to produce one unit of end product. ANS: T
27. The process of exploding the BOM calculates the standard material quantities required to produce the number of output units shown by the master production schedule (MPS). ANS: T
28. The process of exploding the bill of materials results in a master production schedule.
ANS: F
29. Shop floor control is used to monitor and record the status of manufacturing orders and work centers during the
manufacturing process. ANS: T
30. A step master shows the necessary steps and the time to complete each step in producing a product.
ANS: F
31. The material, labor, and machine requirements for each job are reflected in a manufacturing order.
ANS: T
32. Capable to promise planning is accumulation of the data on current inventories, sales commitments, and planned production to determine whether the production of finished goods will be sufficient to commit to additional sales orders. ANS: F
33. Available to promise planning is the accumulation of data on current inventories, sales commitments, planned production and excess production capacity or other planned production capacity that could be quickly converted to production of the desired finished goods necessary to fulfill a sales order request.
ANS: F
34. Variance analysis is the process of comparing actual information about input costs and usage to standards. ANS: T
35. The final move ticket marks the end of the conversion process and the movement of goods to the finished goods warehouse.
ANS: T
MULTIPLE CHOICE
1. Which of the following is not one key characteristics of companies that are successful at managing the pressures resulting from global complexity according to the Deloitte Touche report?
a. improved internal business processes in the areas of customers, products, and supply chains
b. better use of technology to increase integration within and between the areas of customers, products and supply chain c. pursuit of new lucrative marketing channels
d. better general capabilities in the areas of collaboration, flexibility, visibility, and technology ANS: C
2. Which of the following is not one of the key drivers of complexity in manufacturing operations according to the Deloitte Touche survey?
a. confront the realities of globalization. b. the quickening pace of product innovation c. pursuit of new lucrative marketing channels d. pressure to reduce costs throughout the value chain ANS: A
3. Designing new and creative products and getting them to market quickly is an example of:
a. product innovation
b. production process innovation c. supply chain management d. management accounting systems ANS: A
4. Which of the following has included management of throughput time and pull manufacturing?
a. product innovation
b. production process innovation c. supply chain management d. management accounting systems ANS: B
5. Which of the following is impacted heavily by flexible costing, ABC, shifting the cost structure more towards variable costs, and reducing direct labor costs? a. product innovation
b. production process innovation
c. supply chain management d. management accounting systems ANS: D
6. Which of the following is an ERP add on system that organizes data by product, including designs, manufacturing specifications, quality and warranty performance?
a. product life cycle management b. throughput time
c. push manufacturing d. pull manufacturing ANS: A
7. Which of the following involves measuring the time from authorization of goods to be produced to when the goods are completed?
a. product life cycle management b. throughput time
c. push manufacturing d. pull manufacturing ANS: B
8. Which of the following involves short production runs, continuous flow of operations, cellular manufacturing, reduced floor space, and reduced WIP?
a. product life cycle management b. throughput time
c. push manufacturing d. pull manufacturing ANS: D
9. Prevailing trends in production systems reflect all of the following except:
a. emphasis on customer satisfaction b. shortened product life cycles c. increased factory automation
d. the change from "pull" to "push" production scheduling ANS: D
10. Which of the following statements is true?
a. The lower the ratio of "process" time to total lead time, the more efficient the manufacturing process. b. The ratio of "process" time to total manufacturing lead time is higher in the United States than in Japan.
c. A prevailing trend in production systems is the switch from "pull" to "push" production scheduling.
d. In the push approach to manufacturing, the sales forecast drives the production plan and goods are produced in large batches.
ANS: D
11. The two key developments in production systems are: a. managing throughput time and activity-based costing b. managing throughput time and just-in-time inventory
c. managing throughput time and an integrated view of manufacturing d. an integrated view of manufacturing and activity-based costing ANS: C
12. Which of the following statements is false?
a. With the pull approach to manufacturing, factory machinery typically is arranged in factory cells.
b. The pull approach to manufacturing should lead to reduced work in process and finished goods inventories. c. The pull approach to manufacturing should lead to shorter production runs.
d. Enterprise resource planning (ERP) employs a pull approach to manufacturing. ANS: D
13. Pull manufacturing should lead to all of the following except: a. short production runs
b. increased work in process and finished goods inventories c. continuous flow operations
d. a cellular arrangement of factory machinery ANS: B
14. Trends in cost management/cost accounting include all of the following except:
a. reductions in the administrative costs of gathering data
b. a trend toward job order cost systems and away from process cost systems c. adding a fourth cost category called direct technology
d. reduction in the direct labor cost component ANS: B
15. Performing a detailed analysis of cost per unit and cost drivers is an essential prerequisite for using:
a. concurrent engineering b. activity-based costing
c. computer-integrated manufacturing d. flexible manufacturing
ANS: B
16. Activity-based-costing (ABC) systems are directed more at ____________ than cost accounting.
a. cost management and cost reduction b. cost accumulation and cost assignment c. cost allocation and cost containment d. product costing and cost allocation ANS: A
17. The level 0 data flow diagram for the integrated production process includes all of the following process bubbles except a. design product and production processes
b. customer service
c. determine needs for materials d. record manufacturing events ANS: B
18. The objectives of computer-aided design (CAD) and computer-aided engineering (CAE) are all of the following except:
a. improve design productivity b. reduce design lead time c. enhance quantity d. enhance design quality ANS: C
19. Which of the following often includes global inventory management?
a. design product and production processes b. generate master production schedule c. determine needs for materials
d. develop detailed production instructions ANS: B
20. Which of the following lists the detailed specifications of each item of raw materials?
a. parts master b. routing master c. work center master d. bill of materials ANS: A
21. Which of the following specifies the operations necessary to complete a subassembly or finished good and the sequence of operations?
a. parts master b. routing master c. work center master d. bill of materials ANS: B
22. Which of the following is a statement of specific production goals developed from demand forecasts?
a. a master production schedule (MPS) b. materials requirements planning (MRP) c. shop floor control (SFC)
d. just-in-time (JIT) manufacturing ANS: A
23. The objectives of just-in-time (JIT) manufacturing usually include all of the following except:
a. large lot sizes b. zero defects c. zero setup times d. zero lead times ANS: A
24. The implementation features of just-in-time (JIT) manufacturing typically include all of the following except: a. arranging the factory in work cells
b. assigning each worker to a single machine c. allowing workers to stop the production line
d. requiring that the daily production schedule remain fairly constant ANS: B
25. A flexible manufacturing system (FMS) typically consists of all of the following components except:
a. manufacturing resource planning (MRP) b. computer aided manufacturing (CAM)
c. automated storage and retrieval systems(AS/RS) d. automated guided vehicle systems (AGVS ANS: A
26. What is the process that uses information from the master production schedule and time phased order requirements schedule to develop detailed machine and labor utilization schedules?
a. capacity requirements planning (CRP) b. manufacturing orders (MO)
c. move tickets
d. raw materials requisition ANS: A
27. What conveys authority for the manufacture of a specified product or subassembly in a specified quantity and describe the material, labor, and machine requirements for the job? a. capacity requirements planning (CRP)
b. manufacturing orders (MO) c. move tickets
d. raw materials requisition ANS: B
28. Materials requirements planning (mrp) normally would use all of the following inputs except:
a. the master production schedule (MPS) b. bills of material from the BOM file c. the routing file
d. the raw materials status file ANS: C
29. Which of the following typically shows the standard material quantities that are required to produce the number of output units shown by the master production schedule (MPS)? a. bill of materials
b. routing sheet
c. time-phased order requirements schedule d. parts master file
ANS: C
30. The process of comparing actual information about input costs and usage to standards is:
a. standard costing b. process costing c. variance analysis d. activity based costing
ANS: C
31. The raw material quantity variance can be determined by: a. an excess RM issue notice
b. an RM returned notice c. both a and b
d. none of the above ANS: C
32. The logic of the typical inventory system would likely include all of the following processes except: a. prepare purchase requisition
b. record vendor payable c. record receipt of inventory d. record cost of inventory receipts ANS: B
33. In an inventory system that interfaces with a
Purchasing/Accounts Payable/Cash Disbursements system, the following normally would all be process bubbles in an Inventory system except:
a. record sale of inventory b. requisition inventory c. record vendor invoice d. record receipt of inventory ANS: C
34. Which of the following inventory frauds is not identified by Practice Alert No. 94-2: Auditing Inventories--Physical Observations.
a. double-counting inventory
b. including goods that are scrap or obsolete
c. including inventory for which the corresponding payable has not been recorded d. employee theft of inventory item having high sales volume
ANS: D
COMPLETION
1. ________________ systems facilitate integration of all aspects of product design, marketing, and manufacturing. ANS: Enterprise
2. ________________ systems are add-ons or additional ERP modules that organize data by product, including design, manufacturing specifications, quality, and warranty performance.
ANS: Product life-cycle management
3. ________________ is the time it takes from when authorization is made for goods to be produced to when the goods are completed.
ANS: Throughput time
4. In the ____________________ approach to manufacturing, the sales forecast drives the production plan and goods are produced in large batches.
ANS: push
5. Theoretically, in the ____________________ approach to manufacturing, each batch or job consists of one unit. ANS: pull
6. With the pull approach to manufacturing, factory machinery is arranged in ____________________.
ANS: clusters or cells
7. Supply chain management software provides __________ to promise planning and ___________ to promise planning. ANS:
available capable
8. A(n) ____________________ attempts to assign costs to products based on the amount of service operations, such as purchase order preparation, material handling, storage time, wait time, and other nonvalue-added processes, that the products consume.
ANS: activity-based costing (ABC) system
9. ______________ are the sum of costs to design, produce, market, deliver, and support a product from conception to ultimate discontinuance.
ANS: Lifecycle costs
10. A(n) ____________________ is a sequence of activities performed by an organization that add value or utility to the product produced or service rendered.
ANS: value chain
11. The computer technology application that automates the product design process, including but not limited to the functions of geometric modeling, materials stress and strain analysis, drafting, storing product specifications, and mechanical simulation of a product's performance, is called ____________________.
ANS: computer-aided design/computer-aided engineering (CAD/CAE)
12. The _____________________ is a set of specific production goals developed from forecasts of demand, actual sales orders, and/or inventory information.
ANS: master production schedule or MPS
13. _____________________ is a process that uses bills of material, raw material and WIP inventory status data, open order data, and the master production schedule to calculate a _____________ order requirements schedule for materials and subassemblies.
ANS:
materials requirements planning (MRP) time phased
14. _____________________ is an inventory management approach where inventory needs and inventory production capabilities are matched across the entire global enterprise ANS: Global inventory management
Chapter 11—The Billing/Accounts Receivable/ Cash Receipts (B/AR/CR) Process
TRUE/FALSE
1. The B/AR/CR process completes the order to cash process by accomplishing the activities of billing customers, managing customer accounts, and securing payment for goods and services.
2. Recording billing/accounts receivable/cash receipts event data is generally the responsibility of the treasury
department, which typically reports to the controller function. ANS: F
3. In the organization structure shown in the text, although both report to the VP of Finance, the treasurer and controller functions should be segregated..
ANS: T
4. There sales department should be responsible for credit approval so sales personnel can immediately increase sales volume.
ANS: F
5. The objective of cash management is to free up funds so that they can either be invested to earn interest, or used to reduced debt, thus reducing interest charges. ANS: T
6. Float, when applied to cash receipts, is the time between customer payment and the availability of funds on deposit and available.
ANS: T
7. Funds on deposit and available are known as good funds. ANS: T
8. The AR master file address is a postal address, maintained by the firm’s bank, which is used solely for the purpose of collecting checks.
ANS: F
9. With electronic cash, a financial institution issues cash to an individual, which is placed into an electronic wallet. ANS: T
10. Database systems are Internet based systems for sending bills/invoices to customers and receiving the customer payment electronically.
ANS: F
11. An invoice is a business document used by a vendor to notify the customer of an obligation to pay the seller for
merchandise which was ordered and shipped. ANS: T
12. A purchasing statement is a business document designed to inform the payee of the invoices or other items covered by the check amount.
ANS: F
13. The accounts receivable master file is a repository of all unpaid invoices issued by an organization and awaiting final disposition.
ANS: T
14. The logical data dictionary definition of the sales event data file would comprise one or more invoice records.
ANS: T
15. Accepted sales requests are later processed through a separate exception routine.
ANS: F
16. The three types of accounts receivable systems discussed in the text are the lockbox, balance forward, and open item systems.
ANS: F
17. In a balance forward accounts receivable system, the details of open invoices for prior periods do not appear on the current-period customer statement.
ANS: T
18. In an open item accounts receivable system, the details of open invoices for both the current and prior periods appear on the current-period customer statement.
ANS: T
19. In a prebilling billing system, invoices are prepared after the goods have been shipped and the sales order notification has been matched to the shipping's billing notification.
ANS: F
20. In a post billing system, invoices are prepared upon acceptance of the customer order, and there is no separate sales order document as such.
ANS: F
21. Digital image processing systems are computerized systems for capture, storage, and retrieval of real or simulated objects, such as live scenes and photographs.
ANS: T
22. A bar code reader is used to translate an object's image into electronic digital signals.
ANS: F
23. The acronym MICR stands for magnetic information character recognition.
ANS: F
24. The acronym EFT stands for electronic funds transfer.
ANS: T
25. The acronym ACH stands for automated clearing house. ANS: T
26. A credit card system is better at reducing float time than a debit card system.
ANS: F
27. In an open item system accounts receivable records consist of a customer's current balance due, past-due balance, and the finance charges and payments related to the account. ANS: F
28. The B/AR/CR system supports the repetitive work routines of the credit department, the cashier, and the accounts receivable department.
ANS: T
29. A debit card is a method of payment whereby a third party, for a fee, removes from the collector the risk of noncollection of the account receivable.
ANS: F
30. A credit card is a form of payment authorizing the collector to transfer funds electronically from the payer's to the collector's balance.
ANS: F
31. An electronic check closely resembles a paper check with the inclusion of the customer's name, the seller's name, the customer's financial institution, the check amount, and a digital signature.
ANS: T
32. Lapping is a fraud resulting from the improper segregation of duties between the functions of handling cash and recording cash receipt events.
ANS: T
33. The ACH network electronically transfers funds by which the collector's bank account is credited and the payer's account is debited for the amount of a payment. ANS: T
34. The inventory payment data contains the details of each payment received.
ANS: F
35. The stub attached to the customer statement is also known as a turnaround document.
ANS: T
36. The accounts receivable master data is created as sales returns, bad debt write-offs, estimated doubtful accounts, or similar adjustments are processed.
ANS: F
37. Electronic cash is an electronic bank note issued by a financial institution to an individual who, in turn, can transfer the electronic note to make purchases or other payments. ANS: T
38. An electronic lockbox is a banking service in which the bank keys the remittance advice details into its computer system from the customer's remittance advice and then transfers the remittance advice data electronically from the bank's computer to the collector's accounts receivable computer system.
ANS: T
39. A customer relationship management system is an information systems extension that allows a customer to complete an inquiry or perform a task within an organization's business process without the aid of the organization's employees.
ANS: F
40. In the control matrix for the cash receipts function the first present control plan should be to immediately endorse checks.
ANS: T
MULTIPLE CHOICE
1. As discussed in the text, the functions of the billing/accounts receivable/cash receipts process:
a. is identical to those of the order entry/sales process
b. support decision making by managers in the order entry/sales process c. incomes collections of receivables
d. is unrelated to the functions of the order entry/sales process ANS: C
2. According to the concept of segregation of duties, which of the following managers should report to the controller rather than to the treasurer?
a. credit department manager
b. accounts receivable department manager c. cashier
d. investments manager ANS: B
3. In an organization in which the order entry/sales (OE/S) and billing/accounts receivable/cash receipts (B/AR/CR) processes are separate processes, the B/AR/CR process usually accomplishes all of the following activities except: a. shipping goods to customers
b. billing customers
c. managing customer accounts
d. securing payment of customer accounts ANS: A
4. Which of the following pairs of functions would you expect might report directly to the vice president of finance? a. credit department and controller
b. shipping department and controller
c. accounts receivable department and treasurer d. treasurer and controller
ANS: D
5. For a charge sale event, the cashier is to the cash custodial function as the __________ is to the recording function. a. shipping department
b. credit department
c. accounts receivable department d. none of the above
ANS: C
6. For a charge sale event, the cashier is to the cash custodial function as the __________ is to the authorization function. a. shipping department
b. credit department
c. accounts receivable department d. warehouse
ANS: B
7. In the context diagram for a billing/accounts receivable/cash receipts process, which of the following is least likely to be an external entity?
a. the bank b. the customer c. the general ledger d. the cashier ANS: D
8. Which of the following process bubbles would you not expect to see in the logical DFD for a billing/accounts receivable/cash receipts process?
a. perform billing b. requisition inventory c. receive customer payment d. manage customer accounts ANS: B
9. Which of the following normally would trigger the billing process in a billing/accounts receivable/cash receipts process?
a. a copy of the sales order b. a shipping notice c. a picking ticket
d. a customer acknowledgment ANS: B
10. Which of the following normally would trigger the billing/accounts receivable/cash receipts process to record a customer payment?
a. invoice
b. remittance advice c. deposit slip
d. a notification to the general ledger to record a cash receipts update ANS: B
11. The principal master data that you would expect to see in a billing/accounts receivable/cash receipts process is the: a. sales order data
b. shipping notifications data c. sales journal
ANS: D
12. In a logical DFD for a billing/accounts receivable/cash receipts process, which of the following data stores is least likely to interact with a process called "perform billing"? a. inventory master data
b. customer master data
c. accounts receivable master data d. sales event data
ANS: A
13. In a logical DFD for a billing/accounts receivable/cash receipts process, which of the following data stores would you expect to interact with a process called "manage customer accounts"?
a. inventory master data
b. accounts receivable master data c. sales event data
d. cash receipts event data ANS: B
14. In a logical DFD for billing/accounts receivable/cash receipts process, you would expect that a credit memo would be sent by the B/AR/CR process to the customer from which of the following processes?
a. perform billing
b. manage customer accounts c. receive payment
d. validate sales order ANS: B
15. Inputs to the billing/accounts receivable/cash receipts process normally could include all of the following except:
a. a copy of the sales order sent by the sales order function to the billing function b. a shipping notice sent by the shipping function to the billing function c. deposit slip
d. remittance advice ANS: C
16. In an organization in which the order entry/sales (OE/S) and billing/accounts receivable/cash receipts (B/AR/CR) processes are separate processes, outputs of the B/AR/CR process normally could include all of the following except: a. invoice
b. deposit slip
c. credit memo d. shipping notice ANS: D
17. In general, adjustments to customer balances in the accounts receivable master data will be necessary for all of the following except:
a. sales returns and allowances
b. reversals of mispostings and other errors c. bad debt write-offs
d. estimates of uncollectible accounts ANS: D
18. The data dictionary definition of an invoice usually contains all of the following elements except:
a. the customer's credit limit b. an invoice header c. an invoice line(s) d. all of the above ANS: D
19. In an entity-relationship (E-R) diagram for the
billing/accounts receivable/cash receipts (B/AR/CR) process, you would expect that the word trigger would appear between the boxes for ?
a. CUSTOMER and SHIPMENT b. CUSTOMER and SALES INVOICE c. STOCK PICK and SHIPMENTS d. SALES INVOICE and SHIPMENT ANS: C
20. A company using a database approach to data management might not maintain a relational table for ACCOUNTS RECEIVABLE. Rather, accounts receivable balances at any point in time could be computed as the difference between the relations for which of the following continuous events? a. SHIPMENTS and SALES INVOICES
b. SALES INVOICES and CASH RECEIPTS c. SHIPMENTS and CASH RECEIPTS d. CUSTOMER and SALES INVOICES ANS: B
21. In a database containing (among others) five relations--CUSTOMERS, SHIPMENTS, SALES INVOICES, CASH RECEIPTS, and SALES-RELATIONS--you would expect that the Remit_No (Remittance number) would be the primary key for the __________ relation.
a. CUSTOMERS b. SHIPMENTS c. SALES INVOICES d. CASH RECEIPTS ANS: D
22. All of the following are types of accounts receivable systems except:
a. debit card system b. balance-only system c. balance-forward system d. open-item system ANS: A
23. The following is a list of three types of accounts receivable systems and two organizations/systems:
I. Open item II. Balance forward III. Balance only IV. Public utilities
V Credit card companies (i.e., VISA) Which of the following pairs normally are correct? a. I and IV, II and V
b. I and V, II and IV c. II and IV, III and V d. II and V, III and IV ANS: D
24. In a prebilling system, invoices are prepared
a. immediately upon acceptance of a customer order
b. when there is to be a delay between the time that the order is accepted and the time it is shipped c. where inventory balances can be determined only through physical count
d. to improve customer relations ANS: A
25. In a fraud scheme known as __________, the perpetrator attempts to cover the theft of cash received from customer A by applying cash collected from customer B to A's account, then applying a receipt from C to B's account, and so forth. a. kiting
b. lapping c. schmoozing d. hacking ANS: B
26. Deposit slips are usually generated by the billing/accounts receivable/cash receipts process:
a. at the time invoices are prepared b. by manual procedures
c. to satisfy particular control goals d. as part of processing cash receipts ANS: D
27. Typically, the operations process goals of the billing/accounts receivable/cash receipts process:
a. vary, depending on whether we are dealing with the functions of billing, accounts receivable, or cash receipts b. remain the same when dealing with the functions of billing, accounts receivable, or cash receipts
c. vary inversely with the information process goals d. are the same as the information process goals ANS: A
28. In the control matrix for a cash receipts process, the first present control is:
a. receive turnaround documents b. endorse incoming checks c. edit cash receipts for accuracy d. procedure for rejecting inputs ANS: B
29. Which of the following is most likely to appear in the UC and UA columns of a control matrix for the billing process? a. immediately endorse incoming checks
b. receive turnaround documents c. manual agreement of batch totals
d. one for one checking of deposit slip and checks ANS: C
30. For the cash receipts process, the control plan receive turnaround documents helps to achieve which of the following pairs of information process control goals? a. input validity and input completeness
b. input validity and input accuracy c. input accuracy and input completeness d. input accuracy and update accuracy ANS: B
31. For the cash receipts process, which of the following control plans addresses the information process control goal of master data update accuracy?
a. immediately endorse incoming checks b. compare input data with master data c. receive turnaround documents
d. enter cash receipts close to where cash is received ANS: B
32. In the cash receipts process, the control plan of immediately endorsing incoming checks is designed to achieve the control goal of:
a. assuring the timely deposit of cash receipts b. ensuring security of the cash asset c. ensuring cash receipts input accuracy d. ensuring cash receipts input completeness ANS: B
33. In the billing process, the control plan of review shipped not billed sales orders (tickler file) helps to ensure:
a. effectiveness of operations b. efficient employment of resources c. security of resources
d. none of the above ANS: A
34. The billing/accounts receivable/cash receipts process comprises three different but related process--namely, B, AR, and CR. Which of the following would not be an operations process goal?
a. ensure effectiveness of operations b. ensure AR master data update accuracy c. ensure effectiveness of operations d. ensure security of resources
ANS: B
35. The __________ normally would comprise one or more invoice records, but each record would not contain all of the detail reflected on the invoice itself.
a. invoice data b. sales event data
c. accounts receivable adjustments data d. cash receipts data
ANS: B
36. A remittance advice generally would be recorded in which of the following pairs of data stores?
a. customer master data and accounts receivable master data b. sales event data and accounts receivable master data
c. accounts receivable adjustments data and accounts receivable master data d. cash receipts data and accounts receivable master data
ANS: D 37. Digital images
a. help reduce paper in the B/AR/CR system b. are stored in electronic folders
c. may be scanned or created via software d. all of the above
ANS: D
38. In addition to storing an image of the document itself, the typical electronic-based image processing system accompanies the document image with:
a. a paper file of the documents
b. an index used to retrieve the document image c. the MICR code contained on each document d. a "jukebox"
ANS: B
39. Which of the following statements is false?
a. The typical billing/accounts receivable/cash receipts system assists in preparing internal and external reports, including GAAP-based financial statements.
b. Separating the credit function from the sales function is often defended on the grounds that if they were not separated, credit might be extended to high-risk customers, simply to achieve sales targets.
c. The two types of adjustments that commonly result from a periodic review of the balances are a recurring entry for estimated bad debts and a bad debt write-off.
ANS: D
40. Which of the following statements is true?
a. In a prebilling system, invoices are prepared after the goods have been shipped and the sales order notification has been matched to the shipping's billing notification.
b. In a postbilling system, invoices are prepared upon acceptance of the customer order, and there is no separate sales order document as such.
c. Of the two types of billing systems discussed in the text, the prebilling system requires the more accurate inventory records.
d. Of the two types of billing systems discussed in the text, the prebilling system is appropriate in situations where there is a significant delay between acceptance of the customer's order and its shipment.
ANS: C
41. Which of the following statements is false?
a. The check and remittance advice trigger the receive payment process.
b. A bank lockbox provides more protection for cash than a system where cash receipts are mailed to the payee company and then deposited.
c. The hardware, software, maintenance, and communications costs associated with operating a credit card system are lower than for a debit card system.
d. From the standpoint of reducing the collector's float, a customer check is a better payment method than a debit card. ANS: D
42. The billing/accounts receivable/cash receipts process completes the:
a. billing process b. production process c. order to cash process d. inventory process ANS: C
43. An example of the vertical information flows supported by the B/AR/CR process is a(n):
a. accounts receivable aging report b. customer invoice
c. remittance advice
d. general ledger accounts receivable notification ANS: A
44. Which of the following is most commonly associated with the treasury function?
a. recording of event data b. security of funds
c. reporting of results of business events d. maintaining accounting records ANS: B
45. Segregation of duties is most clearly accomplished in most organizations by separating:
a. billing and accounts receivable b. treasury and controllership c. sales and accounts receivable d. order entry and cash receipts ANS: B
46. Which of the following is not an external entity for the B/AR/CR process?
a. order entry/sales process b. general ledger
c. customer d. inventory process ANS: D
47. Which of the following is part of the header section of the invoice?
a. seller identification b. invoice lines c. invoice total d. item description ANS: A
48. Which of the following is a ratio used to monitor the investment in accounts receivable?
a. accounts receivable aging report b. days' sales outstanding c. sales turnover d. inventory turnover ANS: B
49. A customer statement serves a control purpose by: a. notifying that payment is due
b. triggering the receive payment process
c. confirming with the customer the amount still owed d. updating the accounts receivable master file ANS: C
50. The accounts receivable system in which all the outstanding invoices are listed is called the:
a. balance-only system b. open-item system c. balance-forward system d. postbilling system ANS: B
51. The accounts receivable system typically used by credit card companies is the: a. balance-only system b. open-item system c. balance-forward system d. postbilling system ANS: C
52. Quantities of items shipped to a customer would typically be found in the relational table for:
a. CUSTOMERS b. SALES_RELATIONS c. BANKS
d. DEPOSITS ANS: B
53. The billing system in which the invoice is prepared immediately on acceptance of a customer order is called a: a. postbilling system
b. balance-only system c. prebilling system d. balance-forward system ANS: C
54. A billing system that is used when there is little or no delay between the receipt of the customer order and the shipment of the goods is a: a. postbilling system b. balance-only system c. balance-forward system d. prebilling system ANS: D
55. The technology that allows information on documents to be converted into machine-readable data through a scanner is called a(n):
b. MICR c. Bar code reader d. digitizer ANS: A
56. An overall management objective is to: a. minimize the number of sales transactions b. minimize the total amount of accounts receivable
c. minimize the time from the beginning of the selling process to the end of cash collections d. maximize the amount of float
ANS: C
57. Which of the following is most effective in reducing the amount of float? a. credit cards b. debit cards c. MICRs d. charge cards ANS: B
58. Which of the following implies computer-to-computer interchange of data? a. CIP b. lockbox c. EDI d. MICR ANS: C
59. A form of fraud in which the payments made by one customer are systematically applied to the account of another is called:
a. lapping b. malfeasance c. ACH
d. aged trial balance ANS: A
60. In the billing function described in the text, the control goal that contributes to effective operations is:
a. edit the shipping notification for accuracy b. independent billing authorization
c. calculate batch totals
d. review shipped not billed sales orders (tickler file) ANS: D
61. Which control is most effective in contributing to the goal of input completeness in the billing function?
a. one-to-one checking of sales orders to invoices b. batch sequence checks
c. key verification d. none of the above ANS: A
62. Which control plan for the cash receipts function has as its primary control goal to ensure security of resources? a. Reconcile bank account regularly.
b. Enter cash receipts close to where cash is received. c. Immediately endorse incoming checks.
d. One-to-one checking of deposit slips and checks. ANS: C
63. The cashier deposits checks in the bank for XYZ Corp. Who should reconcile the bank statement on a regular basis for operational purposes? a. the treasurer b. internal auditor c. the cashier d. an external auditor ANS: B
64. Which of the following is not an example of a customer self-service system?
a. pay-at-the-pump gasoline station b. drive-thru lanes at a bank c. web-based courier tracking system d. telephone access to credit card balances ANS: B
65. A customer is instructed to send his remittance advice and check to a bank's postal address. This method for collecting customer cash receipts is called:
a. electronic cash
b. automated clearing house
c. electronic lockbox d. lockbox
ANS: D
66. To reduce the cost of collecting its accounts receivable, a company sells its accounts receivable to a financial organization. The service is called:
a. a collection agency b. automated clearing house c. factoring
d. funding ANS: C
COMPLETION
1. The B/AR/CR process completes the order to cash process by accomplishing the activities of billing customers, managing customer accounts, and ___________________.
ANS:
securing payment for goods or services or
collection
2. Recording billing/accounts receivable/cash receipts event data is generally the responsibility of the accounts receivable department, which typically reports to the
____________________ function. ANS: controller
3. In the organization structure shown in the text, although both report to the VP of Finance, the ____________________ and ____________________ functions should be segregated.. ANS:
treasurer controller
4. There should be a segregation of duties between the sales department and the ___________ department.
ANS: credit
5. The objective of ____________________ is to free up funds so that they can either be invested to earn interest, or used to reduced debt, thus reducing interest charges.
ANS: cash management
6. __________, when applied to cash receipts, is the time between customer payment and the availability of funds on deposit and available.
ANS: Float
7. Funds on deposit and available are known as ________ funds.
ANS: good
8. A __________ is a postal address, maintained by the firm’s bank, which is used solely for the purpose of collecting checks.
ANS: lockbox
9. With _______________, a financial institution issues an individual cash that is placed into an electronic wallet. ANS: electronic cash
10. ___________ systems are Internet based systems for sending bills/invoices to customers and receiving the customer payment electronically.
ANS: EBPP
or electronic bill presentment and payment
11. A(n) ____________________ is a business document used by a vendor to notify the customer of an obligation to pay the seller for merchandise which was ordered and shipped. ANS: invoice
12. A(n) ____________________ is a business document designed to inform the payee of the invoices or other items covered by the check amount.
ANS: remittance advice
13. The ____________________ file is a repository of all unpaid invoices issued by an organization and awaiting final disposition.
ANS: accounts receivable master 14. The logical data dictionary definition of the
____________________ event data file would comprise one or more invoice records.
ANS: sales
15. Rejected sales requests are later processed through a separate _____________.
ANS: exception routine
16. The two types of accounts receivable systems discussed in the text are the balance only and ____________________ systems.
ANS: open-item
17. In a(n) ____________________ accounts receivable system, the details of open invoices for prior periods do not appear on the current-period customer statement.
ANS: balance-only
18. In a(n) ____________________ accounts receivable system, the details of open invoices for both the current and prior periods appear on the current-period customer statement. ANS: open-item
19. In a(n) ____________________ billing system, invoices are prepared after the goods have been shipped and the sales order notification has been matched to the shipping's billing notification.
ANS: postbilling
20. In a(n) ____________________ billing system, invoices are prepared upon acceptance of the customer order, and there is no separate sales order document as such.
ANS: prebilling
21. ____________________ processing systems are
computerized systems for capture, storage, and retrieval of real or simulated objects, such as live scenes and photographs.
ANS: Digital image (or image)
22. A(n) ____________________ or image processing camera is used to translate an object's image into electronic digital signals.
ANS: optical scanner
23. The acronym MICR stands for ____________________. ANS: magnetic ink character recognition
24. The acronym ACH stands for ____________________. ANS: automated clearinghouse
25. The acronym EFT stands for ____________________. ANS: electronic funds transfer
26. A(n) ____________________ card system has the advantage of eliminating float.
ANS: debit
27. The ____________________ supports the repetitive work routines of the credit department, the cashier, and the accounts receivable department.
ANS: billing/accounts receivable/cash receipts (B/AR/CR)
28. In a(n) ____________________, accounts receivable records consist of a customer's current balance due, past-due balance, and the finance charges and payments related to the account. ANS: balance-only system
29. A(n) ____________________ is a method of payment whereby a third party, for a fee, removes from the collector the risk of noncollection of the account receivable. ANS: bank credit card
30. A(n) ____________________ is a form of payment authorizing the collector to transfer funds electronically from the payer's to the collector's balance.
ANS: debit card
31. A(n) ____________________ closely resembles a paper check with the inclusion of the customer's name, the seller's name, the customer's financial institution, the check amount, and a digital signature.
ANS: electronic check
32. ____________________ is a fraud resulting from the improper segregation of duties between the functions of handling cash and recording cash receipt events. ANS: Lapping
33. The ____________________ is created as sales returns, bad debt write-offs, estimated doubtful accounts, or similar adjustments are processed.
ANS: accounts receivable adjustments data 34. The ____________________ network electronically
transfers funds by which the collector's bank account is credited and the payer's account is debited for the amount of a payment.
ANS: automated clearing house (ACH)
35. The ____________________ contains the details of each payment received.
ANS: cash receipts event data
36. Often times a stub is attached to the customer statement. This stub is also known as a ___________ document. ANS: turnaround
37. ____________________ is an electronic bank note issued by a financial institution to an individual who, in turn, can transfer the electronic note to make purchases or other payments.
38. A(n) ____________________ is a banking service in which the bank keys the remittance advice details into its computer system from the customer's remittance advice and then transfers the remittance advice data electronically from the bank's computer to the collector's accounts receivable computer system.
ANS: electronic lockbox
39. A(n) ______________________ is an information systems extension that allows a customer to complete an inquiry or perform a task within an organization's business process without the aid of the organization's employees. ANS: customer self-service system
40. In the control matrix for the cash receipts function the first present control plan should be to
_________________________. ANS: immediately endorse checks
15. _____________________ is the process that uses the information from the master production schedule and the time-phased order requirements schedule to develop detailed machine and labor utilization schedule based on available capacity.
ANS: Capacity requirements planning
16. _____________________ convey authority for the manufacture of a specified product or subassembly in specified quantity and describe the material, labor, and machine requirements for the job.
ANS: Manufacturing orders (MOs)
17. _____________ is an integrated decision support system for planning, executing, and controlling manufacturing operations
ANS: Manufacturing resource planning (MRP) 18. ____________________ is a manufacturing philosophy or
business strategy for designing production systems that are more responsive to precisely timed customer delivery requirements.
ANS: Just-in-time (JIT)
19. A(n) ____________________ is a highly automated CIM system that has its goal of achieving the ability to quickly produce wide varieties of products using the same equipment.
ANS: flexible manufacturing system (FMS)
20. ____________________ is the application of computer and communications technology to improve productivity by linking computer numerical control (CNC) machines, monitoring production, and providing automatic feedback to control operations.
ANS: Computer-aided manufacturing (CAM)
21. ____________________ is an automated decision support system that generates manufacturing operations instructions and routings based on information about machining requirements and machine capabilities.
ANS: Computer-aided process planning (CAPP) 22. A(n) ____________________ is one type of automated
materials handling system that typically is a computer-based cart system capable of delivering parts and tools among multiple work centers.
ANS: automated guided vehicle system (AGVS)
23. The ____________________ is a computer-based system for storing and retrieving parts and tools.
ANS: automated storage and retrieval system (AS/RS) 24. The ____________________ system is concerned with the
flow of costs through the factory. ANS: cost accounting
25. A(n) ____________________ contains the standard material quantities that are required to produce one unit of end product.
ANS: bill of material (BOM)
26. The process of ____________________ calculates the standard material quantities required to produce the number of output units shown by the master production schedule (MPS).
ANS: exploding the BOM
27. The process of exploding the bill of materials results in a(n) ____________________ requirements schedule.
ANS: time-phased order
28. _______________ is used to monitor and record the status of manufacturing orders and work centers during the
manufacturing process. ANS: Shop floor control
29. A(n) ____________________ shows the necessary steps and the time to complete each step in producing a product. ANS: routing master
30. The material, labor, and machine requirements for each job are reflected in a(n) ____________________.
ANS: manufacturing order
31. ________________________ is accumulation of the data on current inventories, sales commitments, and planned production to determine whether the production of finished goods will be sufficient to commit to additional sales orders. ANS: Available to promise planning
32. ___________________________ is the accumulation of data on current inventories, sales commitments, planned production and excess production capacity or other planned production capacity that could be quickly converted to production of the desired finished goods necessary to fulfill a sales order request.
ANS: Capable to promise planning
33. __________________ is the process of comparing actual information about input costs and usage to standards. ANS: Variance analysis
34. The ________________ marks the end of the conversion process and the movement of goods to the finished goods warehouse.
