Accounting Information Systems The Processes And Control 2nd Edition By Leslie Turner – Test Bank
End of Chapter Questions:
1. Manufacturing has changed in recent years as a result of each of the following factors except:
B. technological advances
C. increased competition
D. lack of economic prosperity
2. The term conversion processes is often used synonymously with
D. All of the above.
3. Which of the following activities is not part of the planning component of the logistics function?
A. Research and development
B. Capital budgeting
C. Human resource management
4. Which of the following activities is an inventory control activity?
D. Quality control
5. Which of the following statements concerning an operations list is true?
A. It is an engineering document that describes the chain of events within a company’s conversion process.
B. It is an engineering document that specifies the descriptions and quantities of component parts within a product.
C. It is a capital budgeting document that describes the chain of events within a company’s conversion process.
D. It is a capital budgeting document that specifies the descriptions and quantities of component parts within a product.
6. Which of the following terms relates to the control of materials being held for future production?
7. Which of the following questions is most likely to be found on an internal control questionnaire concerning a company’s conversion processes?
A. Are vendor invoices for materials purchases approved for payment by someone who is independent of the cash disbursements function?
B. Are signed checks for materials purchased mailed promptly without being returned to the department responsible for processing the disbursement?
C. Are approved requisitions required when materials are released from the company’s warehouse into production?
D. Are details of payments for materials balanced to the total posted to the general ledger?
8. When additional procedures are necessary to bring a defective product up to its required specifications, this is referred to as
D. Variance reporting.
9. A firm expects to sell 1000 units of its best-selling product in the coming year. Ordering costs for this product are $100 per order, and carrying costs are $2 per unit. Compute the optimum order size, using the EOQ model.
A. 10 units
B. 224 units
C. 317 units
D. 448 units
10. Which of the following internal controls is typically associated with the maintenance of accurate inventory records?
A. Performing regular comparisons of perpetual records with recent costs of inventory items
B. Using a just-in-time system to keep inventory levels at a minimum
C. Performing a match of the purchase request, receiving report, and purchase order before payment is approved
D. Using physical inventory counts as a basis for adjusting the perpetual records
11. If a manufacturing company’s inventory of supplies consists of a large number of small items, which of the following would be considered a weakness in internal controls?
A. Supplies of relatively low value are expensed when acquired.
B. Supplies are physically counted on a cycle basis, whereby limited counts occur quarterly and each item is counted at least once annually.
C. The stores function is responsible for updating perpetual records whenever inventory items are moved.
D. Perpetual records are maintained for inventory items only if they are significant in value.
12. The goal of a physical inventory reconciliation is to
A. Determine the quantity of inventory sold.
B. Compare the physical count with the perpetual records.
C. Compare the physical count with the periodic records.
D. Determine the quantity of inventory in process.
13. Which of the following is not considered a benefit of using computerized conversion systems?
A. Automatic computation of materials requirements
B. Increased sales and cost of sales
C. Increased efficiency and flexibility
D. Early error detection and increased accuracy
14. Which of the following represents a method of managing inventory designed to minimize a company’s investment in inventories by scheduling materials to arrive at the time they are needed for production?
A. The economic order quantity (EOQ)
B. Material resource planning (MRP)
C. First-in, first-out (FIFO)
D. Just-in-time (JIT)
15. For which of the following computerized conversion systems is Wal-Mart well known?
ANSWERS TO QUESTIONS 1 – 15 (FROM THE TEXTBOOK)
1. D 4. C 7. C 10. D 13. B
2. D 5. A 8. A 11. C 14. D
3. C 6. C 9. C 12. B 15. D