Exam 2- Ch 9-13

What type of payroll processing control is designed to avoid inaccurate payroll data and inappropriate payments to employees?

A. Reconcile payroll and employee records.

B. Complete a payroll processing checklist for each pay period.

C. Controller reviews and signs payroll checks.

D. Reconcile payroll withholdings and the general ledger accounts.

A. Reconcile payroll and employee records

Henri joined a public accounting firm as an intern for the summer. Henri's final project involved evaluating the firm's employee termination control activities with a goal of developing additional control activities to prevent unnecessary reputation damages for the firm. Which of the following control activities might Henri suggest?

A. Remove employee's authority to act on behalf of the firm and conduct firm business.

B. Require HR presence at firings to ensure proper procedures and mitigate risks.

C. Complete an HR-authorized employee termination checklist and submit to HR.

D. All of these answer choices are correct.

D. All of these answer choices are correct

What type of payroll fraud is analyzed using the comparison of current payroll period wages with previous payroll periods?

A. Duplicate employees

B. Unauthorized payroll deposits

C. Unauthorized payroll adjustments

D. Ghost employees

C. Unauthorized payroll adjustments

What role in the company should be the control owner to restrict access to employee master data to a limited number of individuals segregated from payroll processing?

A. HR manager

B. Accounts payable manager

C. Controller

D. Payroll manager

A. HR manager

The human resources (HR) business function is responsible for all employees and employee-related operations, including

A. recruiting and hiring employees.

B. transitioning employees.

C. training and developing employees.

D. All of these answer choices are correct.

D. All of these answer choices are correct

A successful employee onboarding program reduces what risks for a company?

A. Decreased productivity

B. Diminished company reputation

C. Training expenses

D. All of these answer choices are correct.

D. All of these answer choices are correct

Which of the following human resources activities is frequently outsourced?

A. Maintaining employee master data

B. Benefits administration

C. Annual performance reviews

D. Involuntary termination

B. Benefits administration

The primary purpose of a company is to

A. Pay their employees

B. Maximize profits

C. Please shareholders

D. Create products

B. Maximize profits

The human resources department activities are part of the

A. Information processes

B. Conversion processes

C. Marketing, sales, and collection processes

D. Acquisition and payment processes

D. Acquisition and payment processes

Which department owns the data used for payroll processing?

A. Accounting

B. Sales

C. Human resources

D. All of these answer are correct

C. Human resources

At what phase of maturity would a company be that has implemented a HR and payroll module in a fully integrated enterprise resource planning system?

A. Phase 1- Limited

B. Phase 2- Informal

C. Phase 3- Defined

D. Phase 4- Optimized

D. Phase 4- Optimized

What type of control activity is implemented to prevent a terminated employee from using proprietary company information elsewhere?

A. Company credit cards are collected from the employee, paid, and closed at the end of the billing cycle

B. Employee access to the system is disabled immediately upon termination

C. All employee issued technology, including storage devices, are collected at the exit interview

D. Terminated employees sign a noncompete agreement during the exit interview

D. terminated employees sign a noncompete agreement during the exit interview

For what reasons do employee terminations present risks to a company?

A. Ex-employee could retaliate with legal or defamatory actions

B. Employee onboarding is time-consuming and expensive

C. Changing employees decreases productivity

D. All of these answer choices are correct

D. All of these answer choices are correct

Employee termination analytics may lead to improvements in business processes and departmental operations. What type of analytics may identify issues between the onboarding experience and retention?

A. Trend analysis of reasons provided during exit interviews for voluntary terminations

B. Comparison of length of employment to feedback from onboarding activities

C. Time series analysis of season trends in voluntary terminations

D. Drilling into employee termination reports by department and supervisors

B. Comparison of length of employment to feedback from onboarding activities

Highly valuable data is collected during the exit interview. What types of employee termination reports might be valuable for review?

A. Number of each type of employee terminations

B. Turnover rate

C. Number of completed employee terminations

D. All of these answer choices are correct

D. All of these answer choices are correct

What type of payroll processing control is designed to avoid inaccurate payroll data and inappropriate payments to employees?

A. Reconcile payroll and employee records

B. Complete a payroll processing checklist for each pay period

C. Controller reviews and signs payroll checks

D. Reconcile payroll withholdings and the general ledger accounts

A. Reconcile payroll and employee records

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic calculates purchasing ratios, such as accounts payable turnover days, purchasing to sales, and purchases growth to sales growth?

a. Vendor performance

b. Receiving reconciliation

c. Financial ratios

d. Vendor prices

C. Financial ratios

There are four departments in a company that are directly involved in the purchasing processes. Which department receives the vendor invoices?

a. Inventory Control

b. Purchasing

c. Receiving

d. Accounts Payable

D. Accounts payable

Choose from the list below the best control activity to prevent receiving products from unapproved vendors.

a. Regularly review approved vendors and their performance. Update the database to remove inactive vendors and those who do not meet performance standards.

b. All purchases routed through the purchasing department

c. Segregation of duties

d. Implement training for employees who communicate with vendors for purchasing.

a. Regularly review approved vendors and their performance. Update the database to remove inactive vendors and those who do not meet performance standards

In which financial statement is a line item for inventory found?

a. Balance sheet

b. Statement of shareholder equity

c. Cash flow statement

d. Income statement

a. Balance sheet

The traditional three-way match matches the receiving report, vendor invoice and what other document?

a. Sales order

b. Vendor table

c. Purchase order

d. Packing slip

c. Purchase order

Choose the best definition from the list below of bid rigging.

a. A document that shows the descriptions and quantities of goods received from vendors

b. Vendors collude with one another and reach advance agreement as to the winning bidder for a particular contract. The winning bidder agrees to compensate the other vendors in some manner.

c. An external document used to request a supplier to sell and deliver the products in the quantities and for the prices specified

d. A supplier generated document, which shows quantities and descriptions of items delivered to the receiving department at the specified warehouse location

b. Vendors collude with one another and reach advance agreement as to the winning bidder for a particular contract. The winning bidder agrees to compensate the other vendors in some manner.

The traditional three-way match matches the purchase order, receiving report and what other document?

A. Sales order

B. Vendor table

C. Packing slip

D. Vendor invoice

D. Vendor invoice

The traditional three-way match matches the receiving report, vendor invoice and what other document?

A. Packing slip

B. Purchase order

C. Sales order

D. Vendor table

B. Purchase order

Some business activities in the purchasing and payments processes result in the exchange of economic resources and recording of accounting transactions. Other activities in the processes do not result in an accounting transaction. Choose from the list below the activity that does NOT result in an accounting transaction.

A. Negotiating contracts and payment terms

B. Receiving raw materials

C. Paying for purchases

D. Returning goods or negotiating allowances

A. Negotiating contract and payment terms

Choose from the list below the best definition of inventory management

A. Inventory management is the process that coordinates the communication of inventory availability and needs across the purchasing, conversion and sales processes

B. Inventory management receives the orders along with a supplier-generated packing slip, which shows quantities and descriptions

C. Inventory management overseas the lifecycle of a product from procuring raw materials trough customer sales

D. Inventory management are products in the process of being manufactured

A. Inventory management is the process that coordinates the communication of inventory availability and needs across the purchasing, conversion and sales processes

Payments recorded in the wrong vendor account may result in duplicate payments to vendors. Choose the best control activity to address this risk.

A. Comparison of the total of the authorized vouchers submitted for payment to the total in the cash disbursements journal for a specific period

B. A three-way match against the purchase order, receiving report, and vendor's invoice

C. Take advantage of all supplier discounts if favorable to the company

D. Reconciliation of vendor statements with the accounts payable subsidiary leger

D. Reconciliation of vendor statements with the accounts payable subsidiary leger

Capitalizing items that are not fixed assets may result in inflated net income and assets, financial statement misstatements, fines and penalties, or reputational damage. Choose the best control activity to address this risk.

A. Expand the list of bidders to make it more difficult for bidders to collude

B. Ensure regular management review of fixed asset accounting transactions and trends in fixed asset ratios

C. Require bidders to sign and submit non-collusion affidavits stating the bidder has not colluded with employees or other bidders

D. Have a code of conduct that employees must agree to and sign, as well as training for employees that includes firing and legal actions for engaging in fraud

B. Ensure regular management review of fixed asset accounting transactions and trends in fixed asset ratios

The textbook discussed four of the stages of the Fixed Asset acquisitions process. Which stage corresponds to the following description?

"In addition to the purchasing and payment journal entries, the fixed asset accountant ensures the fixed asset subsidiary ledger is updated"

A. Stage 1: Asset Procurement

B. Stage 2: Receiving and Tagging

C. Stage 3: Recording Assets

D. Stage 4: Asset Reconciliation

D. Stage 4: Asset Reconciliation

Chose from the list below the best control activity to prevent purchases from unapproved vendors which are conflicts of interest or unauthorized related-party transactions that may result in regulatory or reputational damage

A. Regularly review approved vendors and their performance, update the database to remove inactive vendors and those who do not meet performance standards

B. All purchases routed through the purchasing department

C. Segregation of duties

D. Implement training for employees who communicate with vendors for purchasing

B. All purchases routed through the purchasing department

The raw material purchasing reports can provide management with insight into how to improve processes. Additional raw materials purchasing analytics can be used for decision making and dashboards. Which raw material purchasing analytic compares the goods received to the approved purchase order?

A. Vendor performance

B. Receiving reconciliation

C. Vendor prices

D. Vendor frequency

B. Receiving reconciliation

What is the correct order for the Manufacturing Conversion Processes?

a. Product Development, Production Planning, Production Scheduling, Manufacturing Operations, Quality Management

b. Production Scheduling, Product Development, Production Planning, Manufacturing Operations, Quality Management

c. Production Planning, Production Scheduling, Product Development, Manufacturing Operations, Quality Management

d. Product Development, Production Planning, Quality Management, Production Scheduling, Manufacturing Operations

a. Product Development, Production Planning, Production Scheduling, Manufacturing Operations, Quality Management

Producing products to sell is the primary objective of a manufacturing business. Doing this successfully depends on an efficient and effective manufacturing conversion process. Manufacturing efficiency is a balance between three goals. These goals include: controlling the costs of resources, the rate of production, and what other goal?

a. The location of production

b. The selling price of the finished goods

c. Finished goods inventory levels

d. The quality of finished goods

d. The quality of finished goods

For accounting purposes, the salaries, wages, and benefit expenses of employees directly involved in the production process are called what?

a. Direct labor

b. Indirect factory labor

c. Direct material costs

d. Indirect material costs

a. Direct labor

Choose the best definition of digital twin from the choices below.

a. A digital twin is a digital duplicate or software model of the physical object.

b. A digital twin involves using Industrial Internet of Things (IIoT) technologies to virtually manufacture a product.

c. A digital twin is manufacturing a duplicate product in clay for testing purposes.

d. A digital twin is when an organization tests a product in the field.

a. A digital twin is a digital duplicate or software model of the physical object.

Choose from the following selections the best definition of a production plan.

a. A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts

b. A document that provides a sequence of production events

c. A document that provides a long-term outline of what and when products will be manufactured

d. A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products

c. A document that provides a long-term outline of what and when products will be manufactured

GAAP for financial reporting requires that a manufacturer's inventory on the balance sheet and cost of goods sold on the income statement consist of: the cost of direct materials, ________, and the cost of manufacturing overhead.

a. the expense of IT

b. the cost of shipping

c. the cost of direct labor

d. the cost of sales, general and administration (SG&A)

c. the cost of direct labor

What is one of the key tables that store data needed in the manufacturing conversion process?

a. Customer

b. Employee

c. Sales

d. Vendor

d. Vendor

Choose from the following selections the best definition of a move ticket.

a. A document where every production operation is scheduled at a specific calendar time, resources and workers are assigned, and steps are outlined to utilize all resources effectively

b. A document that authorizes the movement of raw materials from inventory into production

c. A barcode tag to authorize and track movements of a single manufacturing job from one location in production to another

d. A document that summarizes the total manufacturing cost of a product, which is important in recording the cost of inventory and cost of goods sold in the general ledger

c. A barcode tag to authorize and track movements of a single manufacturing job from one location in production to another

Choose from the following selections the best definition of a production schedule.

a. A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts

b. A document that provides a sequence of production events

c. A document that provides a long-term outline of what and when products will be manufactured

d. A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products

d. A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products

The manufacturing conversion and supply chain management processes involve 11 ERP features from the Financial, Production, and Supply Chain Management modules. Which of the following modules is part of the manufacturing conversion and supply chain management processes?

A. Sales management

B. Financial

C. Human resources management

D. Customer relationship management

B. Financial

GAAP for financial reporting requires that a manufacturer's inventory on the balance sheet and cost of goods sold on the income statement consist of: ________, the cost of direct labor, and the cost of manufacturing overhead.

A. The cost of sales, general and administration (SG&A)

B. The expense of IT

C. The cost of shipping

D. The cost of direct materials

D. The cost of direct materials

Choose from the following selections the best definition of a production report.

A. A document where every production operation is scheduled at a specific calendar time, resources and workers are assigned, and steps are outlined to utilize all resources effectively

B. A document that authorizes the movement of raw materials from inventory into production

C. A barcode tag to authorize and track movements of a single manufacturing job from one location in production to another

D. A document that summarizes the total manufacturing cost of a product, which is important in recording the cost of inventory and cost of goods sold in the general ledger

D. A document that summarizes the total manufacturing cost of a product, which is important in recording the cost of inventory and cost of goods sold in the general ledger

Choose from the following selections the best definition of a production plan

A. A document that specified the components of a product, including descriptions and quantities of required raw materials and parts

B. A document that provides a sequence of production events

C. A document that provides a long-term outline of what and when products will be manufactured

D. A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products

C. A document that provides a long-term outline of what and when products will be manufactured

Choose the best definition of digital twin from the choices below

A. A digital twin involves using Industrial Internet of Things (IIoT) technologies to virtually manufacture a product

B. A digital twin is when an organization tests a product in the field

C. A digital twin is manufacturing a duplicate product in clay for testing purposes

D. A digital twin is a digital duplicate or software model of the physical object

D. A digital twin is a digital duplicate or software model of the physical object

Production reports range from source documents to ke metrics. Which is the best description of downtime causes?

A. The total number of orders that have been filled or remain outstanding within a period of time

B. Summary of volume produced by machine type

C. Summary of machine downtime, including reasons for the downtime

D. Summary of customer-returned items, including reasons for the returns

C. Summary of machine downtime, including reasons for the downtime

A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?

A. A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.

B. Leadership support plays an essential role in the success of an initiative.

C. Decreasing manufacturing cycle times, which is the time required to produce an order.

D. Employees might be resistant to change if they fear losing their jobs.

C. Decreasing manufacturing cycle times, which is the time required to produce an order.

The Accounting Standards Codification 606 of the U.S. GAAP has five steps for revenue recognition. Choose step 4 from the list below

A. Recognize revenue when (or as) the entity satisfies a performance obligation

B. Determine the transaction price

C. Identify the contract with a customer

D. Allocate the transaction price to the performance obligations in the contract

E. Identify the performance obligations in the contract

D. Allocate the transaction price to the performance obligations in the contract

Cash collections for B2C customers usually occurs

A. At the time the sale is made

B. One month later

C. On credit

D. One week later

A. At the time the sale is made

____ are dependent on the customers' creditworthiness

A. Purchase orders

B. Credit terms

C. Debit terms

D. Sales orders

B. Credit terms

The Accounting Standards Codification 606 of the U.S. GAAP has five steps for revenue recognition. Choose step 3 from the list below.

A. Recognize revenue when (or as) the entity satisfies a performance obligation

B. Determine the transaction price

C. Identify the contract with a customer

D. Allocate the transaction price to the performance obligations in the contract

E. Identify the performance obligations in the contract

B. Determine the transaction price

The sales process generates a lot of data. The processed data can appear in reports that can help a company improve processes and mitigate risks. Choose from the following list the best definition of a sales orders aging report.

A. Listing of customers and the credit limits

B. Summarizes inventory sold over a specific time period to customers

C. List of items on backorder that customers have ordered

D. The number of days sales orders have been outstanding classified in buckets

D. The number of days sales orders have been outstanding classified in buckets

Julia's Cookies has identified the following B2B shipping control activity risk: "Shipments made to incorrect customers or location may result in customer dissatisfaction, complaints, and financial losses." Choose from the list of control activities below one of the appropriate control activities for this risk statement.

A. All shipments must have properly authorized shipping documents with an appropriate delivery address

B. The ERP system matches the amount of the sales order with the credit limit in the customer master data

C. Restrict access to the shipping area

D. The ERP system matches the customer on the sales order to the customer master data.

A. All shipments must have properly authorized shipping documents with an appropriate delivery address

Which type of journal would be most appropriate for recording a sale on account to a customer?

A. Sales journal

B. General journal

C. Purchase journal

D. Cash receipts journal

A. Sales journal

Which of the following is a correct definition of a tag?

A. A tag, enclosed in angle brackets, is a standardized piece of taxonomy assigned to a piece of data, or element

B. A tag, like a barcode reader's programming, provides the data plus structure for human readability and SEC compliance

C. A tag, enclosed in square brackets, is a standardized price of taxonomy assigned to a piece of data, or element

D. A tag, like a barcode reader's programming, provides the structure of instance documents

A. A tag, enclosed in angle brackets, is a standardized piece of taxonomy assigned to a piece of data, or element

XBRL improves business' ability to

A. Consolidate financial reporting information

B. Compare performance with benchmarks

C. Share data across departments

D. All of these answer choices are correct

D. All of these answer choices are correct

In which module of the ERP system do the raw material management and product costing features reside?

A. Sales management

B. Production

C. Supply chain management

D. Financial

B. Production

Which part of the AIS measures and helps managers control costs?

A. Financial accounting

B. Price accounting

C. Prescriptive accounting

D. Cost accounting

D. Cost accounting

Which of the following most accurately reflects the four traditional dimensions of a balanced scorecard?

A. Innovation, financial, managerial, and customer relationships

B. Innovation, managerial, customer relationships, and learning and growth

C. Financial, customer relationships, internal business processes, and learning and growth

D. Financial, managerial, customer relationships, and vendor relationships

C. Financial, customer relationships, internal business processes, and learning and growth

The cost effectiveness of accounting information is determined by evaluating the cost of providing the information versus the

A. Value of the information

B. Timeliness of the information

C. Consistency of the information

D. Accuracy of the information

A. Value of the information

What is the record-keeping system that captures all journal entries and validates them using the trial balance?

A. Budget

B. Financial reporting

C. Chart of accounts

D. General ledger

D. General ledger

Which of the following statements concerning payroll taxes is TRUE?

A. Employees are responsible for 100% of employee payroll taxes

B. Employers are responsible for 100% of employee payroll taxes

C. Employees and employers share the costs of Social Security and Medicare taxes equally

D. Employees pay the cost for unemployment taxes

C. Employees and employers share the costs of Social Security and Medicare taxes equally

What type of control activity is implemented to prevent a terminated employee from using proprietary company information elsewhere?

a) Employee access to the system is disabled immediately upon termination.

b) Company credit cards are collected from the employee, paid, and closed at the end of the billing cycle.

c) All employee issued technology, including storage devices, are collected at the exit interview.

d) Terminated employees sign a noncompete agreement during the exit interview.

d) Terminated employees sign a noncompete agreement during the exit interview.

A digital factory that is connected, networked, and fully integrated creates opportunities to minimize costs of downtime and underperformance in production and to enable the best output from factory assets and employees. What is an advantage that companies see by using digital manufacturing?

a) A digital factory requires securing every network, cloud platform, operating system, and application across its supply chain and production network.

b) Using a digital twin for a product to improve measurement and manufacturing accuracy.

c) Employees might be resistant to change if they fear losing their jobs.

d) Leadership support plays an essential role in the success of an initiative.

b) Using a digital twin for a product to improve measurement and manufacturing accuracy.

The data collected during the accounts payable process can be converted into several accounts payable reports. Below is a list of some of those reports. Which accounting journal report captures all payments recorded?

a) Cash disbursements journal

b) Purchases by vendor

c) Accounts payable

d) Vendor aging report

a) Cash disbursements journal

What role in a company should be responsible for ensuring that employee onboarding processes are efficient and effective?

a) Hiring department manager

b) Human resources manager

c) Payroll manager

d) Employee relations manger

b) Human resources manager

Julia's Cookies has identified the following recording cash receipts control activity risk: "Receipts posted to the incorrect customer account may result in customer dissatisfaction." Choose from the list of control activities below one of the appropriate control activities for this risk statement.

a) Regular independent bank reconciliations with management review

b) Perform independent check of remittance advices from customers against daily remittance list.

c) Mail monthly statements to customers and investigate and fix discrepancies reported in a timely manner.

d) Automated calculation of discounts

c) Mail monthly statements to customers and investigate and fix discrepancies reported in a timely manner.

Payments made to unauthorized or nonexistent purchases may result in fraudulent misappropriation of cash. Choose the best control activity to address this risk.

a) Take advantage of all supplier discounts if favorable to the company.

b) Reconciliation of vendor statements with accounts payable subsidiary ledger

c) Comparison of the total of the authorized vouchers submitted for payment to the total in the cash disbursements journal for a specific period

d) Apply a three-way match against the purchase order, receiving report, and vendor's invoice.

d) Apply a three-way match against the purchase order, receiving report, and vendor's invoice.

Unrecorded payments may result in duplicate payments to vendors or misstatement of financial statements by overstating cash and accounts payable. Choose the best control activity to address this risk.

a) Comparison of vendor ID in cash payments journal with vendor ID on supporting documentation and payments voucher

b) Comparison of the total of the authorized vouchers submitted for payment to the total in the cash disbursements journal for a specific period

c) A three-way match against the purchase order, receiving report, and vendor's invoice

d) Take advantage of all supplier discounts if favorable to the company.

b) Comparison of the total of the authorized vouchers submitted for payment to the total in the cash disbursements journal for a specific period

Julia's Cookies has identified the following cash receipt control activity risk: "Cash discounts taken by customers that are incorrect may result in loss of profit and future cash receipts." Choose from the list of control activities below one of the appropriate control activities for this risk statement.

a) Regular independent bank reconciliations with management review

b) Perform independent check of remittance advices from customers against daily remittance list

c) Automated calculation of discounts

d) Deposit checks received in the mail daily.

c) Automated calculation of discounts

Choose the best definition from the list below of bid rigging.

a) A supplier generated document, which shows quantities and descriptions of items delivered to the receiving department at the specified warehouse location

b) Vendors collude with one another and reach advance agreement as to the winning bidder for a particular contract. The winning bidder agrees to compensate the other vendors in some manner.

c) A document that shows the descriptions and quantities of goods received from vendors

d) An external document used to request a supplier to sell and deliver the products in the quantities and for the prices specified

b) Vendors collude with one another and reach advance agreement as to the winning bidder for a particular contract. The winning bidder agrees to compensate the other vendors in some manner.

Numerous departments are involved in the fixed assets purchases and payments processes. Choose from the list below one of the departments that is involved in the fixed assets purchases and payments processes.

a) Receiving

b) Sales

c) Marketing

d) Operations

a) Receiving

Choose from the following selections the best definition of the bill of materials (BOM).

a) A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts

b) A document that provides a sequence of production events

c) A document that provides a long-term outline of what and when products will be manufactured

d) A document that provides a short-term allocation of plant machinery and resources to the manufacturing of products

a) A document that specifies the components of a product, including descriptions and quantities of required raw materials and parts

Cost accounting assigns production costs differently, depending on the product or service. Which choice below best describes activity-based costing?

a) Activity-based costing assigns costs based on the machinery they are manufactured on.

b) Activity-based costing assigns costs to products or services that meet specific needs of an individual customer.

c) Activity-based costing identifies specific business activity pools or fundamental business processes and then assigns costs based on the resources consumed by that activity or process.

d) Activity-based costing determines the total cost of the production and averages it over the units produced.

c) Activity-based costing identifies specific business activity pools or fundamental business processes and then assigns costs based on the resources consumed by that activity or process.

Which step of the financial reporting process occurs after the preparation of an unadjusted trial balance?

a) Prepare financial statements

b) Enter adjusting entries

c) Post journal entries to ledgers

d) Prepare an adjusted trial balance

b) Enter adjusting entries

What is one of the key tables that store data needed in the manufacturing conversion process?

a) Sales

b) Employee

c) Vendor

d) Customer

c) Vendor

The accounting system for The Assembly, a growing restaurant, requires that all transactions be entered as journal entries. When the bookkeeper for The Assembly enters the transactions, he discards the paperwork associated with the transaction. As an auditor for the accounting firm, which of the following recommendations should be shared with the bookkeeper?

a) Source documents take up too much physical storage space and are too difficult to sort through to be reviewed during an audit.

b) Source documents do not provide an accurate audit trail as they can fade or be altered after entered in the system, so discarding them is an efficient operational decision.

c) As an auditor, I follow the audit trail generated by the AIS and do not consider the source documents when reviewing accounting transactions for accuracy.

d) As an auditor, I need to be able to review the source documents to verify the accuracy and validity of the accounting transactions. Therefore, source documents should be stored either physically or electronically.

d) As an auditor, I need to be able to review the source documents to verify the accuracy and validity of the accounting transactions. Therefore, source documents should be stored either physically or electronically.

Jerome audits the financial statements for a firm and discovers an error in the statement of cash flows. Which characteristic of data is NOT present for decision usefulness in the financial statements that Jerome audited?

a) Timeliness

b) Relevance

c) Faithful representation

d) Materiality

c) Faithful representation

Which off the following is a factor to consider when determining a company's degree of integration in HR and payroll systems?

a) Support from management

b) Ability to generate user buy-in

c) Size of the business

d)All of these answer choices are correct.

d) All of these answer choices are correct.

Payroll departments perform which activities?

a) Employee pay

b) Wage calculation

c) Commission earnings

d) All of these answers are correct.

d) All of these answers are correct.

What role in a company is responsible for ensuring legal compliance for reporting purposes?

a) AIS

b) Controller

c) Treasurer

d) CEO

d) CEO

Public accounting firms often require terminated employees to exit on the same day as a resignation is submitted, even in the event of a voluntary termination. Why is the same-day exit necessary?

a) Public accounting firms are required by accounting regulations to not allow employees to work after submitting a resignation.

b) Public accounting firms must prevent conflicts of interest if the employee has already accepted a job offer from a direct competitor.

c) Public accounting firms are required by HR standards to interview and escort ex-employees from the building and immediately terminate electronic access.

d) Public accounting firms must prevent ex-employees from discussing any company matters with others at the company after termination.

b) Public accounting firms must prevent conflicts of interest if the employee has already accepted a job offer from a direct competitor.

Which business process manages the removal of an employee from active employment status?

a) Employee termination

b) Employee violation

c) Employee onboarding

d) Employee offboarding

a) Employee termination

Many large accounting firms onboard groups of new hires together. The onboarding process includes several weeks of training together. In what way can this type of onboarding be beneficial to the firm?

a) New hires learn about the corporate culture during the training process.

b) New hires create relationships with one another that can support them throughout their career.

c) New hires become comfortable and establish relationships, thus increasing retention.

d) All of these answer choices are correct.

d) All of these answer choices are correct.

Which of the following financial documents could be used to ensure that debits equal credits?

a) Trial balance

b) Statement of stockholder's equity

c) Income statement

d) Statement of cash flows

a) Trial balance

Julia's Cookies has identified the following B2B pricing control activity risk: "Inappropriately given or unauthorized customer discounts may result in financial loss." Choose from the list of control activities below one of the appropriate control activities for this risk statement.

A. Standardized scripts and templates for marketing materials

B. Policies and procedures for user access are clearly documents and authorized

C. Independent checks on pricing and sales team member's work

D. Defined roles and responsibilities for pricing functions

D. Defined roles and responsibilities for pricing functions

Payments made to unauthorized or nonexistent purchases may result in fraudulent misappropriation of cash. Choose the best control activity to address this risk.

A. Comparison of payment information with purchase order and receiving report information

B. Take advantage of all supplier discounts if favorable to the company

C. Comparison of the total of the authorized vouchers submitted for payment to the total in the cash disbursements journal for a specific period

D. Reconciliation of vendor statements with accounts payable subsidiary ledger

A. Comparison of payment information with purchase order and receiving report information

GAAP for financial reporting requires that a manufacturer's inventory on the balance sheet and cost of goods sold on the income statement consist of: the cost of direct materials, the cost of direct labor, and

A. The cost of sales, general and administration (SG&A)

B. The cost of shipping

C. The cost of manufacturing overhead

D. The expense of IT

C. The cost of manufacturing overhead

The Accounting Standards Codification 606 of the U.S. GAAP has five steps for revenue recognition. Choose step 1 from the list below.

A. Recognize revenue when (or as) the entity satisfies a performance obligation

B. Determine the transaction price

C. Identify the contract with a customer

D. Allocate the transaction price to the performance obligations in the contract

E. Identify the performance obligations in the contract

C. Identify the contract with a customer

The cost accounting function determines product costs, costs of goods sold, and inventory values for financial reporting purposes and management reporting. What is a sample control activity that could be used to control for misstatements in costs that may result in a material misstatement of financial reports?

A. Document and authorize product cost accounting procedures that describe costing methods

B. Ensure that system development is reviewed by appropriate IT and accounting staff

C. Use a BOM for every product in all steps of production

D. Allocate indirect labor and overhead to products on an approved and consistent basis

A. Document and authorize product cost accounting procedures that describe costing methods

Julia's Cookies has identified the following B2C marketing control activity risk: "An unauthorized user posting inappropriate content to the corporate social media accounts may result in legal or reputational damage." Choose from the list of control activities below one of the appropriate control activities for this risk statement.

A. Password logs only available to authorized users

B. Only cashless payments accepted in stores

C. Security cameras covering cash registers

D. Food tampering stickers or seals on delivery containers

A. Password logs only available to authorized users

A successful employee onboarding program reduces what risks for a company?

A. Decreased productivity

B. Diminished company reputation

C. Training expenses

D. All of these answer choices are correct

D. All of these answer choices are correct

The Accounting Standards Codification 606 of the U.S. GAAP has five steps for revenue recognition. Choose step 5 from the list below.

A. Recognizing revenue when (or as) the entity satisfies a performance obligation

B. Determine the transaction price

C. Identify the contract with a customer

D. Allocate the transaction price to the performance obligations in the contract

E. Identify the performance obligations in the contract

A. Recognizing revenue when (or as) the entity satisfies a performance obligation

Which department owns the data used for payroll processing?

A. Accounting

B. Sales

C. Human resources

D. All of these answers are correct

C. Human resources

Which of the following statements concerning financial reporting is TRUE?

A. Financial statements present results of cash flows over specific time period

B. Financial statements present results of operations over specific time periods

C. Financial statements present the financial position of a company at point in time

D. All of these answer choices are correct

D. All of these answer choices are correct

Which of the following is NOT an advantage to integrating the information system for HR and payroll processing?

A. Creating a single source for HR and payroll data

B. Ability to generate user buy-in

C. Minimizing efforts for data collection

D. Providing streamlines access to data

B. Ability to generate user buy-in

The 3-way match takes documents from 3 departments and matches them before paying a vendor invoice. Choose from the list below one of the departments a document should be received from by accounts payable to perform the match.

A. Sales

B. Marketing

C. Purchasing

D. Operations

C. Purchasing

There are five modules in the ERP system cloud map that support the specific purchasing and payment business processes. Choose one of the modules from the list below.

A. Fixed assets

B. Payroll

C. Bill of material

D. Time and attendance

A. Fixed assets

Which of the following is an example of a deduction from an employee's payroll check?

A. Federal and state taxes

B. Retirement contributions

C. Insurance premiums

D. All of these answers are correct

D. All of these answers are correct

Julia's Cookies has identified the following cash deposit control activity risk: "Checks received in the mail that are not deposited intact may result in missing cash." Choose from the list of control activities below one of the appropriate control activities for this risk statement.

A. Deposit checks received in the mail daily

B. Automated calculation of discounts

C. Implement electronic funds transfer directly to the company's bank account or a lockbox system

D. Perform independent check of remittance advices from customers against daily remittance list

C. Implement electronic funds transfer directly to the company's bank account or a lockbox system