Chapter 1

Inroduction to business processes

Multiple Choice Questions

1.Which term refers to business processes that are not executed by a single group or function?

a. Silo Effect
b. Cross-Functional
c. Functional Structure
d. Enterprise Systems
e. Organizational Structure

2. Which term refers to a system in which workers complete their tasks in separate departments
without regard to the consequences for the other components of the process?
a. ERP Effect
b. Cross-Functional
c. Functional Structure
d. Enterprise Systems
e. Silo Effect
3. Which system supports business processes end to end?

a. Management System
b. Accounting System
c. Enterprise System
d. Functional Structure
e. Document System
4. Which of the following statements about business processes is true?
a. They are executed across multiple functions.
b. They are initiated by some type of trigger.
c. They involve multiple steps.
d. All of the above
e. None of the above
5. Which term represents a set of tasks or activities that produce desired outcomes?
a. Business Process
b. Trigger
c. Outcome
d. Enterprise Resource Planning
e. None of the above

6. Which term refers to all of the activities involved in buying or acquiring the materials used by the
organization, such as raw materials needed to make products?

a. Material Planning
b. Procurement Process
c. Production Process
d. Fulfillment Process
e. Lifecycle Data Management

7. Which process involves the actual creation of the products?

a. Material Planning
b. Procurement Process
c. Production Process
d. Fulfillment Process
e. Lifecycle Data Management

8. Which process uses historical data and sales forecasts to plan which materials will be procured and
produced?

a. Material Planning
b. Procurement Process
c. Production Process
d. Fulfillment Process
e. Lifecycle Data Management

9. Which process supports the design and development of products from the initial product idea stage
through the discontinuation of the product?

a. Material Planning
b. Procurement Process
c. Production Process
d. Fulfillment Process
e. Lifecycle Data Management

10. Which process tracks the financial impact of process steps with the goal of meeting legal reporting
requirements?

a. Human Capital Management (HCM)

b. Project Management
c. Financial Accounting
d. Management Accounting or Controlling (CO)
e. None of the above

11. Which process is used to plan and execute large projects such as the construction of a new factory
or the production of complex products such as airplanes?

a. Human Capital Management (HCM)

b. Project Management
c. Financial Accounting
d. Management Accounting or Controlling (CO)
e. None of the above
12. Which process focuses on people within an organization and includes functions
such as recruiting, hiring, training, and benefits management?

a. Human Capital Management (HCM)

b. Project Management
c. Financial Accounting
d. Management Accounting or Controlling (CO)
e. None of the above
13. What is the final step of the procurement process?

a. Invoice
b. Purchase Requisition
c. Purchase Order
d. Payment
e. None of the above

14. What steps are involved in the accounting portion of the procurement process?

a. Receiving the materials and the invoice

b. Creating the purchase requisition and sending payment
c. Creating and sending the purchase order
d. Creating the purchase requisition and receiving the materials
e. Receiving the invoice and sending payment

15. What is the first step of the production process?

a. Authorize Production
b. Request Production
c. Create Product
d. Receive Finished Goods
e. Issue Raw Materials

16. What function does the warehouse perform in the fulfillment process?

a. Prepares and sends the shipment to the customer

b. Communicates data related to the order to other parts of the organization
c. Tracks the order
d. Notifies the customer
e. None of the above

17. ___________ is concerned with matching the demand for materials in the
organization with the supply.

a. Business Planning
b. The Silo Effect
c. Project Management
d. Material Planning
e. None of the above
18. Which of the following is concerned with the storage and movement of materials?

a. Business Planning
b. Silo Effect
c. Project Management
d. Material Planning
e. Inventory and warehouse management (IWM)

19. _____________enables an organization to optimize its product development process, from

design to market, while ensuring that it complies with industry, quality, and regulatory
standards?

a. Business Planning
b. Lifecycle Data Management
c. Project Management
d. Material Planning
e. None of the above

20. _____________ provides tools to manage and store documents securely and to keep track of the
multiple versions of these documents?

a. Document Management
b. Enterprise Management
c. Project Management
d. Material Planning
e. None of the above

21. How does GBI Global sell its merchandise?

a. Directly to customers
b. Via a network of specialized dealers
c. Via the Internet
d. All of the above
e. None of the above

22. Which of the following statements about SAP R/3 is true?

a. It supports a single function or department

b. It is an end-to-end enterprise system
c. Sharing data between departments is problematic
d. None of the above
1. Within the financial structure, typical functions or departments found in a modern
organization include which of the following?
a. purchasing
b. operations
c. internships
d. finance
e. marketing

2. Which of the following are steps within a generic business process of an

organization?
a. Payment
b. Trigger
c. Shipment
d. Outcome
e. Confirmation

3. Which processes have an impact on an organization's finances?

a. Financial accounting processes
b. Project management processes
c. Management accounting or controlling processes
d. Material planning process
e. Procurement process

4. Which processes focus primarily on people and projects?

a. Financial accounting processes
b. Procurement process
c. Production process
d. Human capital management processes
e. Project management processes

5. Which of the following are components of the procurement process?

a. Warehouse
b. Purchasing
c. Sales
d. Operations
e. Accounting

6. Which of the following are components of the production (make) process?

a. Sales
b. Operations
c. Warehouse
d. Accounting
e. Production

7. Which of the following are components of the fulfillment (sell) process?

a. Sales
b. Operations
 c. Warehouse
d. Accounting
e. Production

8. The term materials encompasses which of the following?

a. Products
b. Components
c. Parts
d. Anything used in an organization
e. Accounting

9. Which of the following activities are related to the production process?

a. Request materials
b. Store materials
c. Locate Materials
d. Issue Materials
e. Receive Payment

10. Which of the following activities are related to the procurement process?
f. Issue Materials
g. Receive Materials
h. Prepare for Storage
i. Store Materials
j. Locate Materials

11. Which of the following activities are related to the fulfillment process?
a. Locate Materials
b. Prepare Shipment
c. Prepare for Storage
d. Store Materials
e. Ship to Customer
12. Which of the following are components of the lifecycle data management process?
f. Engineering
g. Marketing
h. Accounting
i. Production
j. Sales
13. Which departments take part in the conception of an idea?
f. Accounting
g. Production
h. Engineering
i. Sales
j. Marketing

14. Sales is involved in which steps in the customer service process?

f. Perform service
g. Create service request
 h. Settlement
i. Authorize service
j. Request maintenance

15. A three-tier architecture includes which of the following components?

k. Operating system layer
l. Data layer
m. Presentation layer
n. Application layer
o. Network layer

16. Which of the following statements concerning Web services are true?
f. Web services expose functionality to other applications.
g. One Web service can be used to execute multiple steps in a process.
h. Web services have standard interfaces for input and output.
i. Web services are an essential component of enterprise systems.
j. Web services can be used to create composite applications.

17. Which of the following statements regarding organizational data are true?
a. Organizational data represent entities such as customers and vendors.
b. Organizational data define the structure of an enterprise.
c. Organizational data are a consequence of the execution of process steps.
d. Organizational data are constantly changing.
e. Organizational data change infrequently.

18. Which of the following statements regarding master data are true?
a. Master data represent entities such as customers and vendors.
b. Master data define the structure of an enterprise.
c. Master data are a consequence of the execution of process steps.
d. Master data are constantly changing.
e. Master data change infrequently

19. Which of the following are examples of organizational data in SAP?

f. Client
g. Customer
h. Purchasing Organization
i. Vendor
j. Plant

20. Which of the following are examples of master data in SAP?

f. Client
g. Customer
h. Purchasing Organization
i. Vendor
j. Plant

21. A plant can be used to represent which of the following?

k. A factory
 l. A storage facility (warehouse, DC)
m. An office
n. A legal entity
o. A company vehicle
22. Material master data are grouped based on:
f. Process
g. Material type
h. Company Code
i. Organizational Element
j. Key segments

23. Which of the following are examples of work lists?

k. Picking list
l. Billing due list
m. List of customers
n. Delivery due list
o. List of documents

24. Plant is an organizational element where

a. Financial accounting takes place
b. Products and services are created
c. Production planning is carried out
d. Services and maintenance is performed

25. Transaction data make use of which types of data?

a. Master
b. Organizational
c. Situational
d. None of the above

26. Which one of the following is not one of the data types that are relevant to the
purchasing
process?
k. Material master
l. Vendor master
m. Sales master
n. Purchasing info records
o. Conditions

27. The key data in the purchasing view of the material master are
p. The purchasing organization, the goods receipt processing time, and the
delivery tolerances
q. The purchasing group, the goods receipt processing time, and the
delivery tolerances
r. The purchasing group, the invoice, and the delivery tolerances
s. The purchasing group, the material master, and the delivery tolerances
t. The price, the storage location, and the delivery date
28. General data in a vendor master contain all of the following except:
k. Name
l. Address
m. Communication
n. Payment terms and methods
o. Search term
29. Which element of a purchase order includes communicating with the vendor?
e. Trigger
f. Data
g. Task
h. Outcome
i. None of the above

30. Which of the following are organizational elements in purchasing?

f. Shipping point
g. Company code
h. Vendors
i. Materials
j. Plant

31. Which of the following statements about storage locations are true?
a. A storage location must be assigned to a plant
b. A storage location can be assigned to more than one plant
c. A client can have more than one storage location
d. A plant can have more than one storage location
e. A storage location can hold only materials with a stock status of unrestricted
use

32. Which of the following are organizational elements in purchasing?

f. Sales organization
g. Purchasing area
h. Plant
i. Vendor
j. Storage location

33. A purchase order can be sent to which of the following?

a. A vendor
b. A customer
c. A plant
d. A purchasing organization
e. A purchasing group

34. Data for source determination are obtained from:

a. A purchase order
b. Purchase info records
c. A source list
d. Contracts and agreements
e. The vendor master record
 35. Which of the following are master data that are related to the purchasing process?
p. Material master
q. Vendor master
r. Vendor info records
s. Purchasing organization
t. Customer master

36. Data from which of the following sources are automatically included in a
purchase
order?
p. Vendor info record
q. Purchasing info record
r. Material master
s. Vendor master
t. Purchasing organization

37. Which of the following are material types?

p. Consumable material
q. Raw material
r. Packaging
s. Consignment material
t. Non-valuated material

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
21) The most common organizational structure within modern organizations is the
functional structure. TRUE/FALSE

22) Losing sight of the big picture is commonly referred to as the silo
effect. TRUE/FALSE

23) Systems that support end-to-end processes are called business processes.
TRUE/FALSE.

24) An enterprise system is a set of tasks or activities that produce desired outcomes.
TRUE/FALSE.

25) Without the various steps of the business process, a company can’t successfully
bill customers and ship products. TRUE/FALSE

26) The lifecycle data management (design) process supports the design and
development of products from the initial product idea stage through the
discontinuation of the product. TRUE/FALSE

27) The material planning process is used to maintain internal assets such as
machinery and to delivery after-sales customer services such as repairs. TRUE/FALSE.
28) The fulfillment process (sell) consists of all the steps involved in selling and
delivering the products to the organization’s customers. TRUE/FALSE

29) The financial accounting process focuses on internal reporting to manage costs
and revenues. TRUE/FALSE.

30) The procurement process includes all of the tasks involved in acquiring needed
materials. TRUE/FALSE

31) Within the production process, the issuing of raw materials takes place in the
warehouse. TRUE/FALSE

32) The purpose of material planning is to match supply with demand. TRUE/FALSE

33) Insufficient supply results in a situation called “stock out". 33)______

34) Common reports of financial accounting include income statement, profit and
loss, and balance sheet. TRUE/FALSE

35) Management accounting helps an organization track costs and revenues to assess
its profitability. TRUE/FALSE

True-False Questions
24. The architecture of an enterprise system refers to the technical structure of the
software, how users interact with the software, and how the software is
physically managed on computer hardware.

25. The three layers of the “three-tier client-server architecture” are the
presentation layer, windows layer, and data layer. F

26. When you access the Internet, your browser is the presentation layer. T

27. Scalability is the ability of the hardware and software to support a greater
number of users easily over time. T

28. Service-oriented architecture (SOA) is the fundamental concept behind systems

connecting through standardized interfaces called Web services. T

29. Enterprise resource planning (ERP) focuses on the internal operations of an organization. T
 30. Inter-company processes take place within a single company. F

31. Customer relationship management (CRM) systems connect a company’s ERP system to its
accounting software system.

32. Supply chain management (SCM) systems help companies execute the processes of
research, design, and product management.

33. Current versions of the SAP business suite can’t run on SAP Net Weaver. F

34. SAP Net Weaver is the “operating system” for an entire company’s business
processes. T

35. Organizational data are used to represent the structure of an enterprise. T

36. A company code is the highest organizational level in SAP ERP. F

37. A client represents each company within an enterprise. F

38. Material master are organizational elements that performs multiple functions and
is relevant to several processes. F

39. A plant can be a factory, a warehouse, a regional distribution center, or a service

center. T

40. The material master includes a large amount of data because it is used in
numerous processes. T

41. The four most common material types are raw materials, semi‐finished goods,
finished goods, and exported goods. F

42. Raw materials (ROH) are purchased from an external source ‐ a vendor‐ and used in the
production process. T

43. Trading goods (HAWA) are resold to customers after they have been modified by
the company. F
44. The online transaction processing (OLTP) system is designed to capture and store
detailed organizational data. F

45. Work lists identify tasks that are scheduled to be completed in a process. T
27) Accounting processes are broadly divided into two main categories: Financial
accounting and management accounting
Answer: True False
28) Financial accounting (FI) is concerned with recording the financial impacts of
business processes as they executed.
Answer: True False

29) Management Accounting (CO) is intended primarily for audiences outside the
organization.
Answer: True False

30) The general ledger is used to record the financial impacts of business process
steps.
Answer: True False

31) A chart of accounts (COA) is an ordered listing of accounts that comprise a

companyʹ s general ledger.
Answer: True False

32) Liabilities are what the company owns, such as cash, land, and buildings.
Answer: True False

33) Account currency determines the currency in which all the transactions are
recorded.
Answer: True False

34) An increase in an asset account or an expense account results in a credit

posting.
Answer: True False

35) An increase in revenue or liability results in a debit posting.

Answer: True False
36) Accounts payable accounting is concerned with vendors. 36) ______
Answer: True False

37) Accounts receivable accounting is concerned with customers.

Answer: True False

38) Intangible assets are physical items such as buildings, machinery, and
computers.
Answer: True False

39) Tangible assets are non- physical items such as trademarks and patents.
Answer: True False

40) Reporting within financial accounting is divided into two categories:

generating financial statements and displaying account information.
Answer: True False