Chapter 16—The General Ledger and Business 8. The chart of accounts is a list of all the accounts in the 17.

l the accounts in the 17. Business intelligence is the integration of statistical and
Reporting (GL/BR) Process general ledger. analytical tools with decision support technologies to
facilitate complex analyses of data warehouses by managers
ANS: T and decision makers.
TRUE/FALSE
9. A performance report compares actual results with budgeted ANS: T
1. The GL/BR process is an interacting structure of people,
expectations.
equipment, methods, and controls that is designed to
18. XML is an XBRL-based language consisting of a set of tags
accomplish both operations and information system
ANS: T that are used to unify the presentation of business reporting
functions.
information into a single format that can be easily read by
10. Often, performance reports are part of a managerial reporting almost any software package and can be easily searched by
ANS: T
system known as a responsibility accounting system. web browsers.
2. The business reporting process comprises accumulating,
ANS: T ANS: F
classifying, and recording data, fueling the financial
11. A journal voucher is an internal source document used to
reporting, business reporting, and other reporting
notify the general ledger to make an accounting entry. 19. XML is a generic web-based language that works on a set of
subsystems..
user-defined tags to determine the presentation of
ANS: T information on a web site and to provide a key to the tags
ANS: F
that can be applied by web users to easily search a given site.
12. The general ledger master data contains summarized
3. The general ledger process is concerned with preparing
information of all company event data. ANS: T
external financial statements, ensuring they conform to
GAAP, generating Web-based forms of key financial
ANS: T 20. Situations where two or more personal computer network
statement and related business reporting via the Internet, and
users try to access the same information resources
supporting the generation of both ad hoc and predetermined
13. An audit trail provides the linkages necessary to trace simultaneously are described as network contention or
business reports.
financial transactions forward through the general concurrency.
ledger/financial reporting (GL/BR) process.
ANS: F
ANS: T
ANS: F
4. A feeder process is any business process that accumulates
21. Call-up procedures are often used to authenticate the identity
event data that is then communicated to and processed by the
14. The ordering of items in descending order, where each of users who access a network from remote locations through
general ledger/financial reporting (GL/BR) process.
successive rank order is subordinate to the rank above is dial-in ports.
known as numerical coding.
ANS: T
ANS: F
ANS: F
5. The managerial reporting officer is responsible for reporting
22. A diskless workstation contains no disk drive so no data can
GAAP financial statements.
15. The National Automated Accounting Research Service be written to floppy disks.
(NAARS) is an example of a public database service.
ANS: F
ANS: T
ANS: T
6. The financial reporting officer is primarily responsible for
23. A network computer is one that consists of a processor and a
budgeting.
16. Balanced scorecard is methodology for assessing an connection to the server, but it has no storage capability
organization's business performance via four components: (1) within itself.
ANS: F
financial, (2) external business process, (3) vendors, and (4)
innovation and improvement activities. ANS: T
7. The controller notifies the business reporting process of
investing and financing transaction activities
ANS: F 24. System access logs include reports of invalid access attempts.
ANS: F
ANS: T

111
 112 Chapter 16

25. The intent of Sarbanes Oxley is to protect the company by b. the treasurer c. the managerial reporting officer
improving the accuracy and reliability of all disclosures. c. the chief executive officer (CEO) d. the budgeting department
d. one of the AIS feeder systems
ANS: F
MULTIPLE CHOICE ANS: C
ANS: A
1. The general ledger process comprises all of the following 11. Actual and budgeted figures are usually sent to the
except: 6. Which of the following individuals should possess the managerial reporting officer by
a. providing information for financial reporting greatest knowledge of GAAP? a. the controller
b. serving the needs of managerial reporting a. general ledger accounting department manager b. the treasurer
c. classifying data by general ledger accounts b. budgeting department manager c. the business reporting department
d. none of the above c. financial reporting officer d. the budgeting department
d. managerial reporting officer

ANS: D ANS: C
ANS: C
2. The business reporting process comprises all of the following 12. Actual and budgeted figures are usually sent to the budgeting
except: 7. Which of the following usually would be responsible for department from
a. preparing general purpose external financial statements preparing operating center budgets? a. the controller
b. generating ad hoc and predetermined business reports for managementa. general ledger accounting department b. the treasurer
c. ensuring that the external financial statements adhere to GAAP b. budgeting department c. the business reporting department
d. none of the above c. financial reporting officer d. the managerial reporting officer
d. operating department managers

ANS: D ANS: C
ANS: D
3. In contrast to the managerial reporting process, the financial 13. Adjusted trial balance figures are usually sent from the
reporting process prepares all of the following financial 8. Which of the following usually would be responsible for business reporting department to the:
statements except: preparing operating center performance reports? a. the financial reporting officer
a. the balance sheet a. general ledger accounting department b. the managerial reporting officer
b. the income statement b. budgeting department c. the business reporting department
c. the standard costing variance report c. financial reporting officer d. the budgeting department
d. the statement of owner equity changes d. managerial reporting officer

ANS: A
ANS: C ANS: D
14. Which of the following has responsibilities and expertise to
4. Typically, you would expect general ledger updates for 9. Normally, you would expect that operating event data preparing internal reports:
financing and investing activities to be fed to the general updates would be sent to the general ledger/business a. the financial reporting officer
ledger/financial reporting (GL/BR) process by: reporting (GL/BR) process by: b. the managerial reporting officer
a. the controller a. the controller c. the business reporting department
b. the treasurer b. the treasurer d. the budgeting department
c. the chief executive officer (CEO) c. the vice president of finance
d. one of the AIS feeder systems d. various business feeder processes
ANS: B
ANS: B
ANS: D 15. Finalized budget figures are sent to the business reporting
5. Typically, you would expect general ledger updates for department by
periodic adjusting entries (e.g., for depreciation, accruals, 10. Performance reports to various cost center, profit center, and a. the financial reporting officer
and the like) to be fed to the general ledger/financial investment center managers are usually sent by? b. the budgeting department
reporting (GL/BR) process by: a. the controller c. the business reporting department
a. the controller b. the treasurer d. the managerial reporting officer
 The General Ledger and Business Reporting (GL/BR) Process 113

b. payroll
c. order entry/sales 26. The coding system typically used in the general ledger chart
ANS: B d. budgeting of accounts is:
a. serial coding
16. Although the controller usually provides ANS: D b. hierarchical coding
adjustments as mandated by GAAP, who else might provide c. block coding
adjusting entry data? 21. Which of the following is least likely to be part of the d. mnemonic coding
a. the financial reporting officer relevant environment of the general ledger/business reporting
b. the budgeting department (GL/BR) process? ANS: B
c. the business reporting department a. the order entry/sales process
d. none of the above b. the billing/accounts receivable/cash receipts process 27. An account in the chart of accounts has the number 1113.
c. the purchasing/accounts payable/cash disbursements process Which of the following does the 3 likely represent?
d. the inventory process a. assets
ANS: A b. current assets
ANS: D c. cash accounts
17. Which of the following advises and assists the cost center, d. cash in bank
profit center, and investment center managers in preparing 22. Inputs to a general ledger/business reporting (GL/BR)
the budget? process typically include all of the following except: ANS: D
a. the financial reporting officer a. adjusting entry journal voucher
b. the budgeting department b. adjusted trial balance 28. An account in the chart of accounts has the number 7111.
c. the business reporting department c. finalized budget Which of the following does the 7 likely represent?
d. none of the above d. GAAP-based financial statements a. revenues
b. sales region
c. merchandise sales
ANS: B ANS: D d. golf merchandise sales
23. In a logical DFD for the general ledger/business reporting
(GL/BR) process, which of the following processes normally ANS: A
would not update the general ledger master data?
a. Record budget. 29. Which of the following items is not one of the four
18. Which of the following could be a journal voucher? b. Post events data components of the balanced scoreboard methodology?
a. general ledger cash disbursements update c. Record adjustments. a. customers
b. customer invoice d. Prepare financial statements. b. financial
c. receiving report c. competitive environment
d. purchase requisition d. internal business processes
ANS: D
ANS: C
ANS: A 24. The general ledger master data does not contain:
a. adjusting entry data 30. Which of the following statements related to eXtensible
19. Which of the following statements related to journal b. customer number markup language is false?
vouchers is false for most ERP systems? c. totals extracted by event type from business event data a. XBRL provides uniformity for users of financial statement and othe
a. The person completing the adjustment will enter it directly into the computer.
d. a chart of accounts simplify delivery of the information via the web.
b. The voucher will be electronic. b. XBRL is was created by SAP and is available for download free of
c. Business event updates from feeder systems may take the form of a journal
ANS: voucher.
B c. XBRL enables users to download information to other software pac
d. To provide an adequate audit trail, a printed copy of journal vouchers is required to capture the signature of the d. XBRL is being incorporated into new versions of ERP software.
person making the entry. 25. Tracing back to individual business events that have been
aggregated into account balances is done by means of a(n): ANS: B
a. electronic reference service
ANS: D b. general ledger account 31. When comparing a multiuser personal computer network
c. audit trail with stand alone personal computers, the most important
20. Which of the following is most related to vertical information d. data dictionary control issue related to the network is:
flow in the GL/BR process? a. physical protection of the equipment
a. treasury's financing functions ANS: C b. minimizing the cost of redundant software
 114 Chapter 16

c. ensuring the validity of users d. front-end machine ANS: general ledger and business reporting process
d. providing adequate training of users (GL/BR)

ANS: C ANS: C 2. The comprises accumulating,

classifying, and recording data, fueling the financial
37. A control procedure for workstation networks that includes reporting, business reporting, and other reporting
32. Control plans for a networked multiuser environment address reports of invalid access attempts is called: subsystems..
all of the following issues except: a. file and record locking
a. physical protection of the equipment and data b. password protection ANS: general ledger process
b. minimizing the cost of add on modules c. call-back procedures 3. The is concerned with
c. ensuring the validity of users d. system access logs preparing external financial statements, ensuring they
d. how to recover from a system failure conform to GAAP, generating Web-based forms of key
financial statement and related business reporting via the
ANS: B ANS: D Internet, and supporting the generation of both ad hoc and
predetermined business reports.
33. An organization is concerned about authenticating the 38. The intent of the Sarbanes Oxley Act is:
identify of users who access the network from remote a. to protect investors by improving the accuracy and reliability of corporate
ANS:disclosures
business reporting process
locations through dial-in ports. The best defense against b. to improve GAAP
unauthorized access is to utilize a(n): c. to increase the speed of disclosures 4. A(n) ____________________ process is any business
a. password d. to strengthen the internal audit department process that accumulates event data that is then
b. automatic log-out communicated to and processed by the general
c. call-back procedure ledger/financial reporting (GL/BR) process.
d. encryption ANS: A
ANS: feeder
39. Which of the following control plans is directed at resolving
ANS: C contention between two network users? 5. The ____________________ officer possesses expertise in
a. call-back procedures generally accepted accounting principles.
34. A diskless workstation has all of the following capabilities b. diskless workstations
except: c. file and record locking ANS: financial reporting
a. doing mathematical calculations d. system access logs
b. writing to a floppy disk 6. The ____________________ officer possesses expertise in
c. printing a report or other output preparing internal management reports.
d. downloading data from a central database ANS: C
ANS: managerial reporting
40. What is the least effective method of ensuring that
ANS: B invalid users of an ERP can not download usable data files to 7. The ____________________ notifies the business reporting
a floppy disk. process of investing and financing transaction activities
35. A network computer workstation has all of the following a. network computers
capabilities except: b. diskless workstations ANS: treasurer
a. doing mathematical calculations c. encryption
b. printing reports d. password 8. The ____________________ is a list of all the accounts in
c. saving to a hard disk the general ledger.
d. downloading data from a central database
ANS: D ANS: chart of accounts

ANS: C COMPLETION 9. A(n) ____________________ report compares actual results

with budgeted expectations.
36. The personal computer networking term that refers to 1. The is an interacting structure of
obtaining data from a host computer's database is: people, equipment, methods, and controls that is designed to ANS: performance or variance
a. file server accomplish both operations and information system functions
b. network operating software with the purpose of generating accounting and other reports. 10. Often, performance reports are part of a managerial reporting
c. downloading system known as a(n) ____________________ system.
 The General Ledger and Business Reporting (GL/BR) Process 115

19. is a generic web- 2. Product life cycle management systems are add-ons or
ANS: responsibility accounting (reporting) based language that works on a set of user-defined tags to additional ERP modules that organize data by product,
determine the presentation of information on a web site and including design, manufacturing specifications, quality, and
11. A(n) ____________________ is an internal source document to provide a key to the tags that can be applied by web users warranty performance.
used to notify the general ledger to make an accounting to easily search a given site.
entry. ANS: T
ANS: eXtensible Markup Language (XML)
ANS: journal voucher 3. Cycle time is the time it takes from when authorization is
20. Situations where two or more personal computer network made for goods to be produced to when the goods are
12. The _______________ data contains summarized users try to access the same information resources completed.
information of all company event data. simultaneously are described as network
____________________. ANS: F
ANS: general ledger master
ANS: contention (or concurrency) 4. In the pull approach to manufacturing, the sales forecast
13. A(n) ____________________ provides the linkages drives the production plan and goods are produced in large
necessary to trace financial transactions backward or forward 21. ____________________ are often used to authenticate the batches.
through the general ledger/financial reporting (GL/BR) identity of users who access a network by requiring the user
process. to type in a specific combination of letters and/or numbers . ANS: F

ANS: audit trail ANS: Passwords 5. Theoretically, in the push approach to manufacturing, each
batch or job consists of one unit.
14. The ordering of items in descending order, where each 22. A(n) ____________________ contains no disk drive to
successive rank order is subordinate to the rank above is enable the writing of data to floppy disks. ANS: F
known as ____________ coding.
ANS: diskless workstation 6. With the pull approach to manufacturing, factory machinery
ANS: hierarchical is arranged in clusters or cells.
23. A(n) ____________________ computer is one that consists
15. The National Automated Accounting Research Service of a processor and a connection to the server, but it has no ANS: T
(NAARS) is an example of a(n) ____________________ storage capability within itself.
service. 7. Supply chain management software provides available to
ANS: network promise planning and capable to promise planning.
ANS: public database
16. is methodology for assessing an 24. ________________ include(s) reports of invalid access ANS: T
organization's business performance via four components: (1) attempts.
financial, (2) internal business process, (3) customers, and (4) 8. A process costing system attempts to assign costs to products
innovation and improvement activities. ANS: System access logs based on the amount of service operations, such as purchase
order preparation, material handling, storage time, wait time,
ANS: Balanced scorecard 25. The intent of _____________________ is to protect and other nonvalue-added processes, that the products
17. is the integration of investors by improving the accuracy and reliability of consume.
statistical and analytical tools with decision support corporate disclosures.
technologies to facilitate complex analyses of data ANS: F
warehouses by managers and decision makers. ANS: Sarbanes Oxley
9. A cost driver is one of the main factors influencing total cost.
ANS: Business intelligence Chapter 15—Integrated Production Processes (IPP)
ANS: T
18. is an XML-based
TRUE/FALSE
language consisting of a set of tags that are used to unify the 10. Lifecycle costs are the sum of costs to design, produce,
presentation of business reporting information into a single market, deliver, and support a product from conception to
1. Production systems facilitate integration of all aspects of
format. ultimate discontinuance.
product design, marketing, and manufacturing.
ANS: eXtensible Business Reporting Language (XBRL) ANS: T
ANS: F
 116 Chapter 16

11. A supply chain is a sequence of activities performed by an

organization that add value or utility to the product produced ANS: T 27. The process of exploding the BOM calculates the standard
or service rendered. material quantities required to produce the number of output
19. JIT is a manufacturing philosophy or business strategy for units shown by the master production schedule (MPS).
ANS: F designing production systems that are more responsive to
precisely timed customer delivery requirements. ANS: T
12. The computer technology application that automates the
product design process, including but not limited to the ANS: T 28. The process of exploding the bill of materials results in a
functions of geometric modeling, materials stress and strain master production schedule.
analysis, drafting, storing product specifications, and 20. An assembly line manufacturing system is a highly
mechanical simulation of a product's performance, is called automated computer integrated manufacturing system that ANS: F
CAD/CAE. has its goal of achieving the ability to quickly produce wide
varieties of products using the same equipment. 29. Shop floor control is used to monitor and record the status of
ANS: T manufacturing orders and work centers during the
ANS: F manufacturing process.
13. The inventory production schedule is a set of specific
production goals developed from forecasts of demand, actual 21. Computer aided manufacturing is the application of computer ANS: T
sales orders, and/or inventory information. and communications technology to improve productivity by 30. A step master shows the necessary steps and the time to
linking computer numerical control (CNC) machines, complete each step in producing a product.
ANS: F monitoring production, and providing automatic feedback to
control operations. 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 ANS: T 31. The material, labor, and machine requirements for each job
production schedule to calculate a time-phased order are reflected in a manufacturing order.
requirements schedule for materials and subassemblies. 22. Computer aided process planning is an automated decision
support system that generates manufacturing operations ANS: T
ANS: T instructions and routings based on information about
machining requirements and machine capabilities. 32. Capable to promise planning is accumulation of the data on
15. Continuous inventory management is an inventory current inventories, sales commitments, and planned
management approach where inventory needs and inventory ANS: T production to determine whether the production of finished
production capabilities are matched across the entire global goods will be sufficient to commit to additional sales orders.
enterprise 23. An automated storage and retrieval system is one type of
automated materials handling system that typically is a ANS: F
ANS: F computer-based cart system capable of delivering parts and
tools among multiple work centers. 33. Available to promise planning is the accumulation of data on
16. Capacity requirements planning is the process that uses the current inventories, sales commitments, planned production
information from the master production schedule and the ANS: F and excess production capacity or other planned production
time-phased order requirements schedule to develop detailed capacity that could be quickly converted to production of the
machine and labor utilization schedule based on available 24. The automated storage and retrieval system is a computer- desired finished goods necessary to fulfill a sales order
capacity. based system for storing and retrieving parts and tools. request.

ANS: T ANS: T ANS: F

17. Purchase orders convey authority for the manufacture of a 25. The financial accounting system is concerned with the flow 34. Variance analysis is the process of comparing actual
specified product or subassembly in specified quantity and of costs through the factory. information about input costs and usage to standards.
describe the material, labor, and machine requirements for
the job. ANS: F ANS: T

ANS: F 26. A bill of material contains the standard material quantities 35. The final move ticket marks the end of the conversion
that are required to produce one unit of end product. process and the movement of goods to the finished goods
18. MRP is an integrated decision support system for planning, warehouse.
executing, and controlling manufacturing operations ANS: T
 The General Ledger and Business Reporting (GL/BR) Process 117

ANS: T c. supply chain management c. A prevailing trend in production systems is the switch from "pull" t
d. management accounting systems d. In the push approach to manufacturing, the sales forecast drives the
MULTIPLE CHOICE batches.

1. Which of the following is not one key characteristics of ANS: D

companies that are successful at managing the pressures ANS: D
resulting from global complexity according to the Deloitte 6. Which of the following is an ERP add on system that
Touche report? organizes data by product, including designs, manufacturing 11. The two key developments in production systems are:
a. improved internal business processes in the areas of customers, products, specifications,
and supply quality
chains and warranty performance? a. managing throughput time and activity-based costing
b. better use of technology to increase integration within and between thea.areas product
of customers,
life cycleproducts
management
and supply chain b. managing throughput time and just-in-time inventory
c. pursuit of new lucrative marketing channels b. throughput time c. managing throughput time and an integrated view of manufacturing
d. better general capabilities in the areas of collaboration, flexibility, visibility,
c. push andmanufacturing
technology d. an integrated view of manufacturing and activity-based costing
d. pull manufacturing

ANS: C ANS: C
ANS: A
2. Which of the following is not one of the key drivers of 12. Which of the following statements is false?
complexity in manufacturing operations according to the 7. Which of the following involves measuring the time from a. With the pull approach to manufacturing, factory machinery typical
Deloitte Touche survey? authorization of goods to be produced to when the goods are b. The pull approach to manufacturing should lead to reduced work in
a. confront the realities of globalization. completed? c. The pull approach to manufacturing should lead to shorter producti
b. the quickening pace of product innovation a. product life cycle management d. Enterprise resource planning (ERP) employs a pull approach to man
c. pursuit of new lucrative marketing channels b. throughput time
d. pressure to reduce costs throughout the value chain c. push manufacturing
d. pull manufacturing ANS: D

ANS: A 13. Pull manufacturing should lead to all of the following except:
ANS: B a. short production runs
3. Designing new and creative products and getting them to b. increased work in process and finished goods inventories
market quickly is an example of: 8. Which of the following involves short production runs, c. continuous flow operations
a. product innovation continuous flow of operations, cellular manufacturing, d. a cellular arrangement of factory machinery
b. production process innovation reduced floor space, and reduced WIP?
c. supply chain management a. product life cycle management
d. management accounting systems b. throughput time ANS: B
c. push manufacturing
d. pull manufacturing 14. Trends in cost management/cost accounting include all of the
ANS: A following except:
a. reductions in the administrative costs of gathering data
4. Which of the following has included management of ANS: D b. a trend toward job order cost systems and away from process cost s
throughput time and pull manufacturing? c. adding a fourth cost category called direct technology
a. product innovation 9. Prevailing trends in production systems reflect all of the d. reduction in the direct labor cost component
b. production process innovation following except:
c. supply chain management a. emphasis on customer satisfaction
d. management accounting systems b. shortened product life cycles ANS: B
c. increased factory automation
d. the change from "pull" to "push" production scheduling 15. Performing a detailed analysis of cost per unit and cost
ANS: B drivers is an essential prerequisite for using:
a. concurrent engineering
5. Which of the following is impacted heavily by flexible ANS: D b. activity-based costing
costing, ABC, shifting the cost structure more towards c. computer-integrated manufacturing
variable costs, and reducing direct labor costs? 10. Which of the following statements is true? d. flexible manufacturing
a. product innovation a. The lower the ratio of "process" time to total lead time, the more efficient the manufacturing process.
b. production process innovation b. The ratio of "process" time to total manufacturing lead time is higher in the United States than in Japan.
 118 Chapter 16

ANS: B 21. Which of the following specifies the operations necessary to 26. What is the process that uses information from the master
complete a subassembly or finished good and the sequence of production schedule and time phased order requirements
16. Activity-based-costing (ABC) systems are directed more at operations? schedule to develop detailed machine and labor utilization
____________ than cost accounting. a. parts master schedules?
a. cost management and cost reduction b. routing master a. capacity requirements planning (CRP)
b. cost accumulation and cost assignment c. work center master b. manufacturing orders (MO)
c. cost allocation and cost containment d. bill of materials c. move tickets
d. product costing and cost allocation d. raw materials requisition

ANS: B
ANS: A ANS: A
22. Which of the following is a statement of specific production
17. The level 0 data flow diagram for the integrated production goals developed from demand forecasts? 27. What conveys authority for the manufacture of a specified
process includes all of the following process bubbles except a. a master production schedule (MPS) product or subassembly in a specified quantity and describe
a. design product and production processes b. materials requirements planning (MRP) the material, labor, and machine requirements for the job?
b. customer service c. shop floor control (SFC) a. capacity requirements planning (CRP)
c. determine needs for materials d. just-in-time (JIT) manufacturing b. manufacturing orders (MO)
d. record manufacturing events c. move tickets
d. raw materials requisition
ANS: A
ANS: B
23. The objectives of just-in-time (JIT) manufacturing usually ANS: B
18. The objectives of computer-aided design (CAD) and include all of the following except:
computer-aided engineering (CAE) are all of the following a. large lot sizes 28. Materials requirements planning (mrp) normally would use
except: b. zero defects all of the following inputs except:
a. improve design productivity c. zero setup times a. the master production schedule (MPS)
b. reduce design lead time d. zero lead times b. bills of material from the BOM file
c. enhance quantity c. the routing file
d. enhance design quality d. the raw materials status file
ANS: A

ANS: C 24. The implementation features of just-in-time (JIT) 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
manufacturing typically include all of the following except:
a. arranging the factory in work cells 29. Which of the following typically shows the standard material
b. assigning each worker to a single machine quantities that are required to produce the number of output
c. allowing workers to stop the production line units shown by the master production schedule (MPS)?
d. requiring that the daily production schedule remain fairly constant a. bill of materials
b. routing sheet
c. time-phased order requirements schedule
ANS: B d. parts master file

ANS: B 25. A flexible manufacturing system (FMS) typically consists of

all of the following components except: ANS: C
20. Which of the following lists the detailed specifications of a. manufacturing resource planning (MRP)
each item of raw materials? b. computer aided manufacturing (CAM) 30. The process of comparing actual information about input
a. parts master c. automated storage and retrieval systems(AS/RS) costs and usage to standards is:
b. routing master d. automated guided vehicle systems (AGVS a. standard costing
c. work center master b. process costing
d. bill of materials c. variance analysis
ANS: A d. activity based costing

ANS: A
 The General Ledger and Business Reporting (GL/BR) Process 119

ANS: C 2. ________________ systems are add-ons or additional ERP 10. A(n) ____________________ is a sequence of activities
modules that organize data by product, including design, performed by an organization that add value or utility to the
31. The raw material quantity variance can be determined by: manufacturing specifications, quality, and warranty product produced or service rendered.
a. an excess RM issue notice performance.
b. an RM returned notice ANS: value chain
c. both a and b ANS: Product life-cycle management
d. none of the above 11. The computer technology application that automates the
3. ________________ is the time it takes from when product design process, including but not limited to the
authorization is made for goods to be produced to when the functions of geometric modeling, materials stress and strain
ANS: C goods are completed. analysis, drafting, storing product specifications, and
mechanical simulation of a product's performance, is called
32. The logic of the typical inventory system would likely ANS: Throughput time ____________________.
include all of the following processes except:
a. prepare purchase requisition 4. In the ____________________ approach to manufacturing, ANS: computer-aided design/computer-aided engineering
b. record vendor payable the sales forecast drives the production plan and goods are (CAD/CAE)
c. record receipt of inventory produced in large batches.
d. record cost of inventory receipts 12. The _____________________ is a set of specific production
ANS: push goals developed from forecasts of demand, actual sales
orders, and/or inventory information.
ANS: B 5. Theoretically, in the ____________________ approach to
manufacturing, each batch or job consists of one unit. ANS: master production schedule or MPS
33. In an inventory system that interfaces with a
Purchasing/Accounts Payable/Cash Disbursements system, ANS: pull 13. _____________________ is a process that uses bills of
the following normally would all be process bubbles in an material, raw material and WIP inventory status data, open
Inventory system except: 6. With the pull approach to manufacturing, factory machinery order data, and the master production schedule to calculate a
a. record sale of inventory is arranged in ____________________. _____________ order requirements schedule for materials
b. requisition inventory and subassemblies.
c. record vendor invoice ANS: clusters or cells
d. record receipt of inventory ANS:
7. Supply chain management software provides __________ to materials requirements planning (MRP)
promise planning and ___________ to promise planning. time phased
ANS: C
ANS: 14. _____________________ is an inventory management
34. Which of the following inventory frauds is not identified by available approach where inventory needs and inventory production
Practice Alert No. 94-2: Auditing Inventories--Physical capable capabilities are matched across the entire global enterprise
Observations.
a. double-counting inventory 8. A(n) ____________________ attempts to assign costs to ANS: Global inventory management
b. including goods that are scrap or obsolete products based on the amount of service operations, such as
c. including inventory for which the corresponding payable has not beenpurchase
recordedorder preparation, material handling, storage time, Chapter 11—The Billing/Accounts Receivable/ Cash Receipts
d. employee theft of inventory item having high sales volume wait time, and other nonvalue-added processes, that the (B/AR/CR) Process
products consume.
TRUE/FALSE
ANS: D ANS: activity-based costing (ABC) system
1. The B/AR/CR process completes the order to cash process by
COMPLETION 9. ______________ are the sum of costs to design, produce,
accomplishing the activities of billing customers, managing
market, deliver, and support a product from conception to
customer accounts, and securing payment for goods and
1. ________________ systems facilitate integration of all ultimate discontinuance.
services.
aspects of product design, marketing, and manufacturing.
ANS: T
ANS: Lifecycle costs
ANS: Enterprise
 120 Chapter 16

2. Recording billing/accounts receivable/cash receipts event 13. The accounts receivable master file is a repository of all ANS: T
data is generally the responsibility of the treasury unpaid invoices issued by an organization and awaiting final
department, which typically reports to the controller function. disposition. 25. The acronym ACH stands for automated clearing house.
ANS: F ANS: T ANS: T

3. In the organization structure shown in the text, although both 14. The logical data dictionary definition of the sales event data 26. A credit card system is better at reducing float time than a
report to the VP of Finance, the treasurer and controller file would comprise one or more invoice records. debit card system.
functions should be segregated.. ANS: T ANS: F
ANS: T
15. Accepted sales requests are later processed through a 27. In an open item system accounts receivable records consist of
4. There sales department should be responsible for credit separate exception routine. a customer's current balance due, past-due balance, and the
approval so sales personnel can immediately increase sales ANS: F finance charges and payments related to the account.
volume.
ANS: F 16. The three types of accounts receivable systems discussed in ANS: F
the text are the lockbox, balance forward, and open item
5. The objective of cash management is to free up funds so that systems. 28. The B/AR/CR system supports the repetitive work routines
they can either be invested to earn interest, or used to ANS: F of the credit department, the cashier, and the accounts
reduced debt, thus reducing interest charges. receivable department.
ANS: T 17. In a balance forward accounts receivable system, the details
of open invoices for prior periods do not appear on the ANS: T
6. Float, when applied to cash receipts, is the time between current-period customer statement.
customer payment and the availability of funds on deposit ANS: T 29. A debit card is a method of payment whereby a third party,
and available. for a fee, removes from the collector the risk of noncollection
ANS: T 18. In an open item accounts receivable system, the details of of the account receivable.
open invoices for both the current and prior periods appear
7. Funds on deposit and available are known as good funds. on the current-period customer statement. ANS: F
ANS: T ANS: T
30. A credit card is a form of payment authorizing the collector
8. The AR master file address is a postal address, maintained by 19. In a prebilling billing system, invoices are prepared after the to transfer funds electronically from the payer's to the
the firm’s bank, which is used solely for the purpose of goods have been shipped and the sales order notification has collector's balance.
collecting checks. been matched to the shipping's billing notification.
ANS: F ANS: F ANS: F

9. With electronic cash, a financial institution issues cash to an 20. In a post billing system, invoices are prepared upon 31. An electronic check closely resembles a paper check with the
individual, which is placed into an electronic wallet. acceptance of the customer order, and there is no separate inclusion of the customer's name, the seller's name, the
ANS: T sales order document as such. customer's financial institution, the check amount, and a
ANS: F digital signature.
10. Database systems are Internet based systems for sending
bills/invoices to customers and receiving the customer 21. Digital image processing systems are computerized systems ANS: T
payment electronically. for capture, storage, and retrieval of real or simulated objects,
ANS: F such as live scenes and photographs. 32. Lapping is a fraud resulting from the improper segregation of
ANS: T duties between the functions of handling cash and recording
11. An invoice is a business document used by a vendor to notify cash receipt events.
the customer of an obligation to pay the seller for 22. A bar code reader is used to translate an object's image into
merchandise which was ordered and shipped. electronic digital signals. ANS: T
ANS: T ANS: F
33. The ACH network electronically transfers funds by which
12. A purchasing statement is a business document designed to 23. The acronym MICR stands for magnetic information the collector's bank account is credited and the payer's
inform the payee of the invoices or other items covered by character recognition. account is debited for the amount of a payment.
the check amount. ANS: F
ANS: F ANS: T
24. The acronym EFT stands for electronic funds transfer.
 The General Ledger and Business Reporting (GL/BR) Process 121

34. The inventory payment data contains the details of each d. is unrelated to the functions of the order entry/sales process 7. In the context diagram for a billing/accounts receivable/cash
payment received. receipts process, which of the following is least likely to be
ANS: C an external entity?
ANS: F a. the bank
2. According to the concept of segregation of duties, which of b. the customer
35. The stub attached to the customer statement is also known as the following managers should report to the controller rather c. the general ledger
a turnaround document. than to the treasurer? d. the cashier
a. credit department manager
ANS: T b. accounts receivable department manager
c. cashier ANS: D
36. The accounts receivable master data is created as sales d. investments manager
returns, bad debt write-offs, estimated doubtful accounts, or 8. Which of the following process bubbles would you not
similar adjustments are processed. ANS: B expect to see in the logical DFD for a billing/accounts
receivable/cash receipts process?
ANS: F 3. In an organization in which the order entry/sales (OE/S) and a. perform billing
billing/accounts receivable/cash receipts (B/AR/CR) b. requisition inventory
37. Electronic cash is an electronic bank note issued by a processes are separate processes, the B/AR/CR process c. receive customer payment
financial institution to an individual who, in turn, can transfer usually accomplishes all of the following activities except: d. manage customer accounts
the electronic note to make purchases or other payments. a. shipping goods to customers
b. billing customers
ANS: T c. managing customer accounts ANS: B
d. securing payment of customer accounts
38. An electronic lockbox is a banking service in which the bank 9. Which of the following normally would trigger the billing
keys the remittance advice details into its computer system ANS: A process in a billing/accounts receivable/cash receipts
from the customer's remittance advice and then transfers the process?
remittance advice data electronically from the bank's 4. Which of the following pairs of functions would you expect a. a copy of the sales order
computer to the collector's accounts receivable computer might report directly to the vice president of finance? b. a shipping notice
system. a. credit department and controller c. a picking ticket
b. shipping department and controller d. a customer acknowledgment
ANS: T c. accounts receivable department and treasurer
d. treasurer and controller
39. A customer relationship management system is an ANS: B
information systems extension that allows a customer to ANS: D
complete an inquiry or perform a task within an 10. Which of the following normally would trigger the
organization's business process without the aid of the 5. For a charge sale event, the cashier is to the cash custodial billing/accounts receivable/cash receipts process to record a
organization's employees. function as the __________ is to the recording function. customer payment?
a. shipping department a. invoice
ANS: F b. credit department b. remittance advice
c. accounts receivable department c. deposit slip
40. In the control matrix for the cash receipts function the first d. none of the above d. a notification to the general ledger to record a cash receipts update
present control plan should be to immediately endorse
checks. ANS: C
ANS: B
ANS: T 6. For a charge sale event, the cashier is to the cash custodial
function as the __________ is to the authorization function. 11. The principal master data that you would expect to see in a
MULTIPLE CHOICE a. shipping department billing/accounts receivable/cash receipts process is the:
b. credit department a. sales order data
1. As discussed in the text, the functions of the billing/accounts c. accounts receivable department b. shipping notifications data
receivable/cash receipts process: d. warehouse c. sales journal
a. is identical to those of the order entry/sales process d. accounts receivable master data
b. support decision making by managers in the order entry/sales process
c. incomes collections of receivables ANS: B
 122 Chapter 16

ANS: D c. credit memo 21. In a database containing (among others) five relations--
d. shipping notice CUSTOMERS, SHIPMENTS, SALES INVOICES, CASH
12. In a logical DFD for a billing/accounts receivable/cash RECEIPTS, and SALES-RELATIONS--you would expect
receipts process, which of the following data stores is least that the Remit_No (Remittance number) would be the
likely to interact with a process called "perform billing"? ANS: D primary key for the __________ relation.
a. inventory master data a. CUSTOMERS
b. customer master data 17. In general, adjustments to customer balances in the accounts b. SHIPMENTS
c. accounts receivable master data receivable master data will be necessary for all of the c. SALES INVOICES
d. sales event data following except: d. CASH RECEIPTS
a. sales returns and allowances
b. reversals of mispostings and other errors
ANS: A c. bad debt write-offs ANS: D
13. In a logical DFD for a billing/accounts receivable/cash d. estimates of uncollectible accounts
receipts process, which of the following data stores would 22. All of the following are types of accounts receivable systems
you expect to interact with a process called "manage except:
customer accounts"? ANS: D a. debit card system
a. inventory master data b. balance-only system
b. accounts receivable master data 18. The data dictionary definition of an invoice usually contains c. balance-forward system
c. sales event data all of the following elements except: d. open-item system
d. cash receipts event data a. the customer's credit limit
b. an invoice header
c. an invoice line(s) ANS: A
ANS: B d. all of the above
23. The following is a list of three types of accounts receivable
14. In a logical DFD for billing/accounts receivable/cash receipts systems and two organizations/systems:
process, you would expect that a credit memo would be sent ANS: D
by the B/AR/CR process to the customer from which of the I. Open item
following processes? 19. In an entity-relationship (E-R) diagram for the II. Balance forward
a. perform billing billing/accounts receivable/cash receipts (B/AR/CR) process, III. Balance only
b. manage customer accounts you would expect that the word trigger would appear IV. Public utilities
c. receive payment between the boxes for ? V Credit card companies (i.e., VISA)
d. validate sales order a. CUSTOMER and SHIPMENT
b. CUSTOMER and SALES INVOICE Which of the following pairs normally are correct?
c. STOCK PICK and SHIPMENTS a. I and IV, II and V
ANS: B d. SALES INVOICE and SHIPMENT b. I and V, II and IV
c. II and IV, III and V
15. Inputs to the billing/accounts receivable/cash receipts process d. II and V, III and IV
normally could include all of the following except: ANS: C
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
20. A company using a database approach to data management ANS: D
c. deposit slip might not maintain a relational table for ACCOUNTS 24. In a prebilling system, invoices are prepared
d. remittance advice RECEIVABLE. Rather, accounts receivable balances at any a. immediately upon acceptance of a customer order
point in time could be computed as the difference between b. when there is to be a delay between the time that the order is accept
the relations for which of the following continuous events? c. where inventory balances can be determined only through physical
ANS: C a. SHIPMENTS and SALES INVOICES d. to improve customer relations
b. SALES INVOICES and CASH RECEIPTS
16. In an organization in which the order entry/sales (OE/S) and c. SHIPMENTS and CASH RECEIPTS
billing/accounts receivable/cash receipts (B/AR/CR) d. CUSTOMER and SALES INVOICES ANS: A
processes are separate processes, outputs of the B/AR/CR
process normally could include all of the following except:
a. invoice ANS: B
b. deposit slip
 The General Ledger and Business Reporting (GL/BR) Process 123

25. In a fraud scheme known as __________, the perpetrator 30. For the cash receipts process, the control plan receive
attempts to cover the theft of cash received from customer A turnaround documents helps to achieve which of the ANS: B
by applying cash collected from customer B to A's account, following pairs of information process control goals?
then applying a receipt from C to B's account, and so forth. a. input validity and input completeness 35. The __________ normally would comprise one or more
a. kiting b. input validity and input accuracy invoice records, but each record would not contain all of the
b. lapping c. input accuracy and input completeness detail reflected on the invoice itself.
c. schmoozing d. input accuracy and update accuracy a. invoice data
d. hacking b. sales event data
c. accounts receivable adjustments data
ANS: B d. cash receipts data
ANS: B
31. For the cash receipts process, which of the following control
26. Deposit slips are usually generated by the billing/accounts plans addresses the information process control goal of ANS: B
receivable/cash receipts process: master data update accuracy?
a. at the time invoices are prepared a. immediately endorse incoming checks 36. A remittance advice generally would be recorded in which of
b. by manual procedures b. compare input data with master data the following pairs of data stores?
c. to satisfy particular control goals c. receive turnaround documents a. customer master data and accounts receivable master data
d. as part of processing cash receipts d. enter cash receipts close to where cash is received b. sales event data and accounts receivable master data
c. accounts receivable adjustments data and accounts receivable maste
d. cash receipts data and accounts receivable master data
ANS: D ANS: B

27. Typically, the operations process goals of the 32. In the cash receipts process, the control plan of immediately ANS: D
billing/accounts receivable/cash receipts process: endorsing incoming checks is designed to achieve the control
a. vary, depending on whether we are dealing with the functions of billing,
goalaccounts
of: receivable, or cash receipts 37. Digital images
b. remain the same when dealing with the functions of billing, accounts receivable,
a. assuring or cash
the timely
receipts
deposit of cash receipts a. help reduce paper in the B/AR/CR system
c. vary inversely with the information process goals b. ensuring security of the cash asset b. are stored in electronic folders
d. are the same as the information process goals c. ensuring cash receipts input accuracy c. may be scanned or created via software
d. ensuring cash receipts input completeness d. all of the above

ANS: A
ANS: B ANS: D
28. In the control matrix for a cash receipts process, the first
present control is: 33. In the billing process, the control plan of review shipped not 38. In addition to storing an image of the document itself, the
a. receive turnaround documents billed sales orders (tickler file) helps to ensure: typical electronic-based image processing system
b. endorse incoming checks a. effectiveness of operations accompanies the document image with:
c. edit cash receipts for accuracy b. efficient employment of resources a. a paper file of the documents
d. procedure for rejecting inputs c. security of resources b. an index used to retrieve the document image
d. none of the above c. the MICR code contained on each document
d. a "jukebox"
ANS: B
ANS: A
29. Which of the following is most likely to appear in the UC ANS: B
and UA columns of a control matrix for the billing process? 34. The billing/accounts receivable/cash receipts process
a. immediately endorse incoming checks comprises three different but related process--namely, B, AR, 39. Which of the following statements is false?
b. receive turnaround documents and CR. Which of the following would not be an operations a. The typical billing/accounts receivable/cash receipts system assists
c. manual agreement of batch totals process goal? including GAAP-based financial statements.
d. one for one checking of deposit slip and checks a. ensure effectiveness of operations b. Separating the credit function from the sales function is often defen
b. ensure AR master data update accuracy separated, credit might be extended to high-risk customers, simply
c. ensure effectiveness of operations c. The two types of adjustments that commonly result from a periodic
ANS: C d. ensure security of resources balances are a recurring entry for estimated bad debts and a bad deb
d. The logical data dictionary definition of the cash receipts events da
 124 Chapter 16

c. reporting of results of business events 50. The accounts receivable system in which all the outstanding
d. maintaining accounting records invoices are listed is called the:
ANS: D a. balance-only system
b. open-item system
40. Which of the following statements is true? ANS: B c. balance-forward system
a. In a prebilling system, invoices are prepared after the goods have been shipped and the sales order notification has d. postbilling system
been matched to the shipping's billing notification. 45. Segregation of duties is most clearly accomplished in most
b. In a postbilling system, invoices are prepared upon acceptance of the customer
organizations
order,
byand
separating:
there is no separate sales ANS: B
order document as such. a. billing and accounts receivable
c. Of the two types of billing systems discussed in the text, the prebillingb.system
treasury
requires
andthe
controllership
more accurate inventory 51. The accounts receivable system typically used by credit card
records. c. sales and accounts receivable companies is the:
d. Of the two types of billing systems discussed in the text, the prebillingd.system
order
is entry
appropriate
and cash
in situations
receipts where there a. balance-only system
is a significant delay between acceptance of the customer's order and its shipment. b. open-item system
c. balance-forward system
ANS: B d. postbilling system
ANS: C
46. Which of the following is not an external entity for the
41. Which of the following statements is false? B/AR/CR process? ANS: C
a. The check and remittance advice trigger the receive payment process.a. order entry/sales process
b. A bank lockbox provides more protection for cash than a system where b. cashgeneral
receipts
ledger
are mailed to the payee company 52. Quantities of items shipped to a customer would typically be
and then deposited. c. customer found in the relational table for:
c. The hardware, software, maintenance, and communications costs associated
d. inventory
with operating
processa credit card system are a. CUSTOMERS
lower than for a debit card system. b. SALES_RELATIONS
d. From the standpoint of reducing the collector's float, a customer check is a better payment method than a debit card. c. BANKS
ANS: D d. DEPOSITS
47. Which of the following is part of the header
ANS: D section of the invoice? ANS: B
a. seller identification
42. The billing/accounts receivable/cash receipts process b. invoice lines 53. The billing system in which the invoice is prepared
completes the: c. invoice total immediately on acceptance of a customer order is called a:
a. billing process d. item description a. postbilling system
b. production process b. balance-only system
c. order to cash process ANS: A c. prebilling system
d. inventory process d. balance-forward system
48. Which of the following is a ratio used to monitor the
investment in accounts receivable? ANS: C
ANS: C a. accounts receivable aging report
b. days' sales outstanding 54. A billing system that is used when there is little or no delay
43. An example of the vertical information flows supported by c. sales turnover between the receipt of the customer order and the shipment
the B/AR/CR process is a(n): d. inventory turnover of the goods is a:
a. accounts receivable aging report a. postbilling system
b. customer invoice ANS: B b. balance-only system
c. remittance advice c. balance-forward system
d. general ledger accounts receivable notification 49. A customer statement serves a control purpose by: d. prebilling system
a. notifying that payment is due
b. triggering the receive payment process
ANS: A c. confirming with the customer the amount still owed ANS: D
d. updating the accounts receivable master file
44. Which of the following is most commonly associated with 55. The technology that allows information on documents to be
the treasury function? converted into machine-readable data through a scanner is
a. recording of event data ANS: C called a(n):
b. security of funds a. OCR
 The General Ledger and Business Reporting (GL/BR) Process 125

b. MICR c. calculate batch totals c. electronic lockbox

c. Bar code reader d. review shipped not billed sales orders (tickler file) d. lockbox
d. digitizer

ANS: D ANS: D
ANS: A
61. Which control is most effective in contributing to the goal of 66. To reduce the cost of collecting its accounts receivable, a
56. An overall management objective is to: input completeness in the billing function? company sells its accounts receivable to a financial
a. minimize the number of sales transactions a. one-to-one checking of sales orders to invoices organization. The service is called:
b. minimize the total amount of accounts receivable b. batch sequence checks a. a collection agency
c. minimize the time from the beginning of the selling process to the endc.of cash
keycollections
verification b. automated clearing house
d. maximize the amount of float d. none of the above c. factoring
d. funding

ANS: C ANS: A
ANS: C
57. Which of the following is most effective in reducing the 62. Which control plan for the cash receipts function has as its
amount of float? primary control goal to ensure security of resources? COMPLETION
a. credit cards a. Reconcile bank account regularly.
b. debit cards b. Enter cash receipts close to where cash is received. 1. The B/AR/CR process completes the order to cash process by
c. MICRs c. Immediately endorse incoming checks. accomplishing the activities of billing customers, managing
d. charge cards d. One-to-one checking of deposit slips and checks. customer accounts, and ___________________.
ANS:
securing payment for goods or services
ANS: B ANS: C or
collection
58. Which of the following implies computer-to-computer 63. The cashier deposits checks in the bank for XYZ Corp. Who
interchange of data? should reconcile the bank statement on a regular basis for 2. Recording billing/accounts receivable/cash receipts event
a. CIP operational purposes? data is generally the responsibility of the accounts receivable
b. lockbox a. the treasurer department, which typically reports to the
c. EDI b. internal auditor ____________________ function.
d. MICR c. the cashier ANS: controller
d. an external auditor
3. In the organization structure shown in the text, although both
ANS: C report to the VP of Finance, the ____________________ and
ANS: B ____________________ functions should be segregated..
59. A form of fraud in which the payments made by one ANS:
customer are systematically applied to the account of another 64. Which of the following is not an example of a customer self- treasurer
is called: service system? controller
a. lapping a. pay-at-the-pump gasoline station
b. malfeasance b. drive-thru lanes at a bank 4. There should be a segregation of duties between the sales
c. ACH c. web-based courier tracking system department and the ___________ department.
d. aged trial balance d. telephone access to credit card balances ANS: credit

5. The objective of ____________________ is to free up funds

ANS: A ANS: B so that they can either be invested to earn interest, or used to
reduced debt, thus reducing interest charges.
65. A customer is instructed to send his remittance advice and ANS: cash management
60. In the billing function described in the text, the control goal check to a bank's postal address. This method for collecting
that contributes to effective operations is: customer cash receipts is called: 6. __________, when applied to cash receipts, is the time
a. edit the shipping notification for accuracy a. electronic cash between customer payment and the availability of funds on
b. independent billing authorization b. automated clearing house deposit and available.
 126 Chapter 16

ANS: Float 17. In a(n) ____________________ accounts receivable system, 28. In a(n) ____________________, accounts receivable records
the details of open invoices for prior periods do not appear on consist of a customer's current balance due, past-due balance,
7. Funds on deposit and available are known as ________ the current-period customer statement. and the finance charges and payments related to the account.
funds. ANS: balance-only ANS: balance-only system
ANS: good
18. In a(n) ____________________ accounts receivable system, 29. A(n) ____________________ is a method of payment
8. A __________ is a postal address, maintained by the firm’s the details of open invoices for both the current and prior whereby a third party, for a fee, removes from the collector
bank, which is used solely for the purpose of collecting periods appear on the current-period customer statement. the risk of noncollection of the account receivable.
checks. ANS: open-item ANS: bank credit card
ANS: lockbox
19. In a(n) ____________________ billing system, invoices are 30. A(n) ____________________ is a form of payment
9. With _______________, a financial institution issues an prepared after the goods have been shipped and the sales authorizing the collector to transfer funds electronically from
individual cash that is placed into an electronic wallet. order notification has been matched to the shipping's billing the payer's to the collector's balance.
ANS: electronic cash notification. ANS: debit card
ANS: postbilling
10. ___________ systems are Internet based systems for sending 31. A(n) ____________________ closely resembles a paper
bills/invoices to customers and receiving the customer 20. In a(n) ____________________ billing system, invoices are check with the inclusion of the customer's name, the seller's
payment electronically. prepared upon acceptance of the customer order, and there is name, the customer's financial institution, the check amount,
ANS: no separate sales order document as such. and a digital signature.
EBPP ANS: prebilling ANS: electronic check
or electronic bill presentment and payment
21. ____________________ processing systems are 32. ____________________ is a fraud resulting from the
11. A(n) ____________________ is a business document used computerized systems for capture, storage, and retrieval of improper segregation of duties between the functions of
by a vendor to notify the customer of an obligation to pay the real or simulated objects, such as live scenes and handling cash and recording cash receipt events.
seller for merchandise which was ordered and shipped. photographs. ANS: Lapping
ANS: invoice ANS: Digital image (or image)
33. The ____________________ is created as sales returns, bad
12. A(n) ____________________ is a business document 22. A(n) ____________________ or image processing camera is debt write-offs, estimated doubtful accounts, or similar
designed to inform the payee of the invoices or other items used to translate an object's image into electronic digital adjustments are processed.
covered by the check amount. signals. ANS: accounts receivable adjustments data
ANS: remittance advice ANS: optical scanner
34. The ____________________ network electronically
13. The ____________________ file is a repository of all unpaid 23. The acronym MICR stands for ____________________. transfers funds by which the collector's bank account is
invoices issued by an organization and awaiting final ANS: magnetic ink character recognition credited and the payer's account is debited for the amount of
disposition. a payment.
ANS: accounts receivable master 24. The acronym ACH stands for ____________________. ANS: automated clearing house (ACH)
ANS: automated clearinghouse
14. The logical data dictionary definition of the 35. The ____________________ contains the details of each
____________________ event data file would comprise one 25. The acronym EFT stands for ____________________. payment received.
or more invoice records. ANS: electronic funds transfer ANS: cash receipts event data
ANS: sales
26. A(n) ____________________ card system has the advantage 36. Often times a stub is attached to the customer statement.
15. Rejected sales requests are later processed through a separate of eliminating float. This stub is also known as a ___________ document.
_____________. ANS: debit ANS: turnaround
ANS: exception routine
27. The ____________________ supports the repetitive work 37. ____________________ is an electronic bank note issued by
16. The two types of accounts receivable systems discussed in routines of the credit department, the cashier, and the a financial institution to an individual who, in turn, can
the text are the balance only and ____________________ accounts receivable department. transfer the electronic note to make purchases or other
systems. ANS: billing/accounts receivable/cash receipts payments.
ANS: open-item (B/AR/CR) ANS: Electronic cash
 The General Ledger and Business Reporting (GL/BR) Process 127

38. A(n) ____________________ is a banking service in which 28. _______________ is used to monitor and record the status of
the bank keys the remittance advice details into its computer ANS: flexible manufacturing system (FMS) manufacturing orders and work centers during the
system from the customer's remittance advice and then manufacturing process.
transfers the remittance advice data electronically from the 20. ____________________ is the application of computer and
bank's computer to the collector's accounts receivable communications technology to improve productivity by ANS: Shop floor control
computer system. linking computer numerical control (CNC) machines,
ANS: electronic lockbox monitoring production, and providing automatic feedback to 29. A(n) ____________________ shows the necessary steps and
control operations. the time to complete each step in producing a product.
39. A(n) ______________________ is an information systems
extension that allows a customer to complete an inquiry or ANS: Computer-aided manufacturing (CAM) ANS: routing master
perform a task within an organization's business process
without the aid of the organization's employees. 21. ____________________ is an automated decision support 30. The material, labor, and machine requirements for each job
ANS: customer self-service system system that generates manufacturing operations instructions are reflected in a(n) ____________________.
and routings based on information about machining
40. In the control matrix for the cash receipts function the first requirements and machine capabilities. ANS: manufacturing order
present control plan should be to
_________________________. ANS: Computer-aided process planning (CAPP) 31. ________________________ is accumulation of the data on
ANS: immediately endorse checks current inventories, sales commitments, and planned
22. A(n) ____________________ is one type of automated production to determine whether the production of finished
materials handling system that typically is a computer-based goods will be sufficient to commit to additional sales orders.
15. _____________________ is the process that uses the cart system capable of delivering parts and tools among
information from the master production schedule and the multiple work centers. ANS: Available to promise planning
time-phased order requirements schedule to develop detailed
machine and labor utilization schedule based on available ANS: automated guided vehicle system (AGVS) 32. ___________________________ is the accumulation of data
capacity. on current inventories, sales commitments, planned
23. The ____________________ is a computer-based system for production and excess production capacity or other planned
ANS: Capacity requirements planning storing and retrieving parts and tools. production capacity that could be quickly converted to
production of the desired finished goods necessary to fulfill a
16. _____________________ convey authority for the ANS: automated storage and retrieval system (AS/RS) sales order request.
manufacture of a specified product or subassembly in
specified quantity and describe the material, labor, and 24. The ____________________ system is concerned with the ANS: Capable to promise planning
machine requirements for the job. flow of costs through the factory.
33. __________________ is the process of comparing actual
ANS: Manufacturing orders (MOs) ANS: cost accounting information about input costs and usage to standards.
25. A(n) ____________________ contains the standard material
17. _____________ is an integrated decision support system for quantities that are required to produce one unit of end ANS: Variance analysis
planning, executing, and controlling manufacturing product.
operations 34. The ________________ marks the end of the conversion
ANS: bill of material (BOM) process and the movement of goods to the finished goods
ANS: Manufacturing resource planning (MRP) warehouse.
26. The process of ____________________ calculates the
18. ____________________ is a manufacturing philosophy or standard material quantities required to produce the number ANS: final move ticket
business strategy for designing production systems that are of output units shown by the master production schedule
more responsive to precisely timed customer delivery (MPS).
requirements.
ANS: exploding the BOM
ANS: Just-in-time (JIT)
27. The process of exploding the bill of materials results in a(n)
19. A(n) ____________________ is a highly automated CIM ____________________ requirements schedule.
system that has its goal of achieving the ability to quickly
produce wide varieties of products using the same ANS: time-phased order
equipment.