Resources required in the conversion process include materials, labor, overhead, and fixed assets.. Perpetual inventory systems involve updating the inventory and cost of sales accounts
Trang 1ACCOUNTING INFORMATION SYSTEMS
CONTROLS AND PROCESSES
TURNER / WEICKGENANNT
CHAPTER 11: Conversion Processes and Controls
TEST BANK – CHAPTER 11– TRUE / FALSE
1 Because of the manpower and computer programmers required to control robotics, robotics has had little influence manufacturing
2 Resources required in the conversion process include materials, labor, overhead, and fixed
assets
3 Even if a firm is a service or sales firm it may conduct some sort of manufacturing operation
4 The major function within the conversion process is the logistics function
5 The three primary components of the logistics function are 1) planning, 2) production, and
9 Routing is the issuance and movement of materials through the sales process
10 Inventory warehousing involves managing the holding area for finished goods awaiting sale
11 The final hub in the logistics function is sales
12 Standard costs are expected costs based on projections of a product’s required resources
13 Standard costs include direct materials, direct labor, and overhead
14 Perpetual inventory systems involve updating the inventory and cost of sales accounts only at the end of the period
15 Because conversion processes involve the physical movement of inventory throughout the
operating facility and these movements are normally accomplished by material handling personnel the burden of sufficient internal controls is not required
16 Complete, up-to-date, and accurate documentation on production orders is needed to support the conversion process
Trang 217 Physical controls should be in place in the company’s storerooms, warehouses, and production facilities in order to safeguard the inventories held therein
18 When perpetual inventory concepts are utilized, a physical inventory count to determine the quantity of inventory on hand is not required
19 To ensure that delays and shutdowns in one part of the manufacturing facility do not affect another part of the manufacturing facility IT integration of all or part of the company’s
processing applications is usually not accomplished
20 Computer-aided manufacturing (CAM) involves the complete automation of the production process, including the full replacement of human resources with computers
21 MRP stands for Management Resource Projections
22 Just-in-time (JIT) production systems are concerned with minimizing or eliminating inventory levels of all inventory items
23 Earnings management is the act of misstating financial information in order to improve financial statement results
24 Absorption costing involves the inclusion of both variable and fixed costs in the determination of unit costs for ending inventories and cost of goods sold
25 Management should not consider the moral implications of replacing human resources with electronic resources based on the cost/benefit concept
26 The systems, processes, and internal controls are part of a corporate governance structure
27 Corporate governance requires proper financial stewardship, and since inventories, fixed
assets, and office supplies are the largest assets reported on a balance sheet, financial
stewardship in these areas is especially important
ANSWERS TO TEST BANK - CHAPTER 11 - TRUE/FALSE:
Trang 3TEST BANK – CHAPTER 11 – MULTIPLE CHOICE
28 A company’s conversion processes includes all of the following except:
30 The conversion process is initiated when the company recognizes:
A the receipt of raw materials
B the shipment of finished goods to customers
C the need to conduct operations
D None of the above
31 Overhead includes all of the following except:
A various other expenses necessary to run the operating facility
B the president’s salary
C fixed assets
D indirect labor and materials
32 The major activities within the conversion process include all but
A strategic planning that supports the company’s operational goals
B optimizing the use of the employees, property, and inventories that are needed in
operations
C controlling production flows, ensuring product quality
D and preparing the related cost accounting and financial accounting records
33 Which of the following company activities would not be considered a productive activity?
A The manufacture of automobiles
B The treatment of patients in a medical facility
C Providing consulting services
D All of the above, A, B, and C, are considered productive activities
34 The process of logical, systematic flow of resources throughout the organization is referred to as:
A logistics
B planning
C reporting
D sales forecast
Trang 435 The component of the logistics function that directs the focus of operations is referred to as:
C maintenance and control process
D human resources process
40 The process that is concerned with maintaining the capital resources used to support production
is referred to as:
A the production schedule
B production orders
C maintenance and control
D the human resources process
41 A _ outlines the specific timing required for a sales order, including the
dates and times designated for the production run
A production schedule
B production orders schedule
C maintenance and control schedule
D human resources schedule
Trang 542 The responsible for managing the placement and development of sufficient qualified personnel which includes hiring and training workers as well as maintaining records of their performance is the task of:
A the production schedule department
B the production orders department
C the maintenance and control department
D the human resources department
43 The responsible for managing and recording the movement of inventory in the many different directions that it may go throughout the conversion process is assigned to the:
A production schedule department
B inventory control department
C maintenance and control department
D the human resources department
44 The issuance and movement of materials into the various production phases is referred to as:
A production scheduling process
B inventory control process
C the routing process
D the production orders process
45 Which document provides the descriptions and quantities of materials taken into production for a specified sale or other authorized production activity?
A The routing slip
B The shipping notice
C The purchase requisition
D The sales order
46 Inventory _ managing the holding area for finished goods awaiting sale
A purchase order
B shipping notice
C purchase requisition
D warehousing
47 The major function within the conversion process is the:
A sales order function
B sales forecast function
Trang 649 The planning component of the logistics function has all of the following elements except:
A maintenance and control
51 The operations component of the logistics function has which of the following elements?
A maintenance and control
A is responsible for the issuance of stocks and bonds to finance operations
B plans the capital resources needed to support operations
C is responsible for the procurement of production materials
D is not a function of a company once established and functioning
54 Engineering is responsible for:
A designing the product while operations is responsible the bill of materials and the
operations list
B designing the plant and equipment used in manufacturing
C is responsible for the procurement of production equipment
D designing the product and creating the bill of materials and the operations list
55 The bill of materials is the:
A cost of raw materials purchased from a vendor
B document of instructions utilized to assemble a product
C form that specifies the components of a product
D designing the product and creating the bill of materials and the operations list
56 The operations list is the:
A schedule of production for the day, week, or month as specified by the company
B document of instructions utilized to assemble a product
C form that specifies the components of a product
D designing the product and creating the bill of materials and the operations list
Trang 757 Scheduling:
A plans the timing for acquisition of fixed assets
B does not take into account machine breakdowns
C takes into consideration all the open sales orders
D does not take inventory needs
58 Production orders:
A outline the specific timing required for sales orders
B authorize production activities for a particular need or order
C are forecasts of needs based on known and anticipated sales
D are issued by the engineering department to correct product deficiency issues
59 A production schedule:
A does not contain requirements due to sales forecasts
B does not contain information from the bill of materials
C contains information from the operations list
D are issued by the maintenance and control department
60 The department responsible for training production personnel is the:
A production department
B human resources department
C engineering department
D None of the above
61 Economic order quantity (EOQ) is a function:
A of the purchasing customer or client
B of the sales force to provide the purchasing customer or client with the greatest value
C of the responsibility of engineering through the operations list
D associated with inventory control
62 Routing is:
A the path electronic messages follow in the inventory system
B the issuance and movement of materials into the various production phases
C the physical movement of materials from the point of sale to the customer
D the physical movement of materials from the vendor to the inventory stores facility
63 Inventory status reports:
A: are generated only for raw materials
B are only generated for finished goods
C are prepared at various stages of the production process
D are only generated for work in process
64 Select the true statement from the choices below
A: Inventory stores and warehousing are both concerned with raw materials
B Neither inventory stores nor warehousing are concerned with raw materials
C Inventory stores is concerned with raw materials and warehousing is concerned with
finished goods
D Inventory stores is concerned with finished goods and warehousing is concerned with raw
materials
Trang 865 The term “operations” is commonly used to refer to:
A: the main function of the business
B any function of the business which generates revenues
C only those functions of the business accomplished by the operations department
D only those functions which move inventory through the production cycle
66 Operations may be performed by all of the following except:
A: continuous processing of homogeneous products
B: batch processing
C custom, made-to-order processing
D Each of the above is a valid form of operations
67 The final hub in the logistics function is:
A: packaging
B: quality control
C sales
D shipping to the customer
68 Rework refers to:
A generating a better quote for a customer
B overhaul of a manufacturing machine
C additional procedures to bring a product up to specifications
D parts that are beyond repair at any cost
69 The final hub in the logistics function which involves a follow-up to production, where the
products are inspected before they are moved to the warehouse or shipping area is referred to as:
A quality control costs
B sales order cost
C rework costs
D standard costs
71 A system which involves recording purchases of raw materials inventory, recording all the
components of work in process, and recording the total cost of sales for products completed and sold is referred to as:
A a perpetual inventory system
B the accounting information system
C a periodic inventory system
D None of the above
Trang 972 Perpetual inventory systems:
A record changes in inventory categories only at the end of each period
B record changes in inventory categories only when sales are made
C record changes in inventory categories whenever material is moved from one category to
another
D does not address raw materials
73 Variances represent the differences between:
A actual costs and the standard costs applied
B raw materials ordered and raw materials received
C the sales targets and sales accomplishments
D actual quantity on hand and quantity according to the inventory system
74 Standard costs are:
A the responsibility of production accountants
B the expected costs based on required resources
C the costs normally paid for a component
D are the prices the customer is expected to pay upon sale
75 Standard costs take into consideration all of the following except:
A the cost of materials utilized to maintain production equipment
B the cost of labor used to operate the production machinery
C the cost of the sales manager’s salary
D factory overhead items that cannot be directly correlated to product production
76 Perpetual inventory systems:
A are only updated at the end of each fiscal period
B are concerned only with finished goods
C are not concerned with raw materials
D involve every level of inventory necessary for production
77 Periodic inventory systems:
A are only updated at the end of each fiscal period
B are concerned only with finished goods
C are not concerned with raw materials
D may not reflect current inventory levels
78 Variances:
A represent the differences between actual costs and the standard costs applied
B represent the difference between design specifications and production results
C represent flaws in the production results
D Each of the answers, A, B, and C are correct
79 Variances:
A are only investigated if they are unfavorable
B are always investigated
C will always result in the improvement of the logistics function
D may not result in any changes in the logistics function
Trang 1080 Which of the following is not a responsibility given to the individuals making purchases for the company?
A Purchasing raw materials for production
B Specifying the order and sequence of payments to vendors
C Selecting vendors
D Specifying the quantities to be ordered
81 Which of the following activities in the conversion process does not require express authorization?
A Initiation of production orders
B Issuance of materials into the production process
C Transfer of finished goods to the warehouse or shipping areas
D Initiation of a sales order
82 Segregation of duties is accomplished by which of the following?
A Accounting personnel having restricted access to physical inventory
B Warehouse personnel signing all documents related to material movements
C Production personnel restricted to one manufacturing station at all times
D None of the above
83 Security of assets and documents include all of the following except:
A water sprinklers
B adequate insurance coverage
C restricted movement of office supplies
D security guards
84 In inventory systems, when the actual quantity and the accounting records quantity are
compared it is referred to as:
A perpetual inventory
B inventory resolution
C the physical inventory reconciliation
D periodic inventory
85 Cost-benefit can be defined as:
A Gross profit after sales are made
B cameras and security guards to protect construction materials in a restricted access
warehouse
C verifying inventory levels at the end of each working shift
D alarm systems and vaults for fine jewelry inventories
86 The activity in the conversion process that does not require express authorization is:
A the initiation of production orders
B the issuance of materials into the production process
C the transfer of finished goods to the warehouse or shipping areas
D the movement of production pieces from one stage of production to the next
Trang 1187 Within the logistics function, segregation of duties means:
A one person should not have both inventory and accounting responsibilities
B one person should not have production responsibilities over more than one station
C one person should not have quality assurance responsibilities over a work station other
than his own
D each person can only have one duty or function in the production function
88 Physical controls include all but:
A fences and alarm systems
B security guards
C high tech security tools
D Each of the answers, A, B, and C are correct
89 Physical inventory counts should only include:
A finished goods
B finished goods and raw materials
C finished goods and work-in-process
D raw materials, work-in-process, and finished goods
90 When there is a difference between the inventory records quantity and the physical count of inventory:
A there is a variance
B the difference can be ignored if minor
C the difference is resolved through inventory reconciliation
D the difference is ignored if the physical quantity exceeds inventory record quantity
91 Which of the following factors does not influence the need to safeguard and monitor inventory movement?
A Inconsistent or high levels of inventory movement
B If the inventory is held at various locations
C If a company’s inventory items are difficult to differentiate
D Each of the answers, A, B, and C are correct
92 The software allows engineers to work with advanced graphics at electronic
work stations to create 3-D models that depict the production environment
A computer-integrated manufacturing systems (CIMs)
B computer aided design (CAD)
C material resource planning (MRP)
D computer aided manufacturing (CAM)
93 _ involves the automated scheduling of production orders and movement of
materials in the production process
A Computer-integrated manufacturing systems (CIMs)
B Computer aided design (CAD)
C Material resource planning (MRP)
D Computer aided manufacturing (CAM)
Trang 1294 _ integrates all of the conversion processes to allow for minimal disruptions due to reporting requirements or inventory movement issues
A Computer-integrated manufacturing systems (CIMs)
B Computer aided design (CAD)
C Material resource planning (MRP)
D Computer aided manufacturing (CAM)
95 IT systems permit or allow all of the following except:
A automatic computation of materials requirements based on sales orders
B reduced internal security measures
C automatic updating of inventory status reports
D timely transfer of inventories throughout the process,
96 Computerization of the conversion process results in all except:
A Automatic computation of materials requirements based on purchase orders
B Timely transfer of inventories throughout the process
C Automatic updating of inventory status reports
D Automatic computation of materials requirements based on sales orders
97 Select the false completion to the statement which starts “A computer-based conversion
process:”
A requires less data input into the system
B automatically prepares financial accounting entries and cost accounting reports
C yields greater benefits in terms of workforce efficiency
D permits more systematic scheduling which allows for greater flexibility
98 Select the true statement
A Computer-aided manufacturing (CAM) requires computer-aided design
B Computer-aided design is always two dimensional
C Computer-aided design may be three dimensional
D Computer-aided design requires additional manpower during assembly
99 Just-in-time (JIT) production systems:
A require close communications with the engineering department
B do not require close communications with vendors
C require closely controlled inventory levels
D do not require additional monitoring
100 The act of misstating financial information in order to improve financial statement results is
referred to as:
A just in time production systems
B manufacturing resource planning
C earning management
D absorption costing