27.

Which of the following is not one of the trial balances typically produced as
part of the financial accounting cycle?
a)
b)
c)
d)

Closing trial balance

Unadjusted trial balance
Adjusted trial balance
Post-closing trial balance

28.

A general ledger:
29. Is a chronological listing of an organizations transactions
b)
Is a listing of an organizations transactions, organized by account
c)
Does not include every account in an organizations chart of accounts
d)
Is the same thing as a transaction listing

30.

The financial accounting cycle ends with:

31. The production of financial statements
b)
Closing journal entries
c)
The production of an adjusted trial balance
d)
Development of cash forecasts

Which of the following is not a primary objective of coding systems today?

32.
)

To compress data
b) To uniquely identify objects
c) To convey special meanings that are not apparent to the public-at-large
d) To use numbers instead of alphabetic characters in order to save on computer data
storage costs
33.
)

The Year 2000 problem is a prime example of:

Information overload
b)
A coding problem
c)
Poorly designed report structures
d)
The short-sightedness of accountants

Which of the following is not usually a design consideration in coding systems?

34. Consistency
b)
Standardization
c)
Government regulation
d)
Plans for future expansion
26.
)

27.

Well-designed output reports are characterized by all but which of the following?
They are useful
b)
They are conveniently formatted
c)
They never include graphs
d)
They are easily identifiable
Information overload:
a)
Refers to a problem that can result when an AIS produces too many reports
b)
Refers to the situation that occurs when a companys database is too large
c)
Almost always results when an AIS is computerized
d)
Cannot be avoided in the Information Age

28.

Which of the following is not an example of a source document?

)
b)
c)
d)
29.
)

30.

31.
)

32.

Receiving report
Purchase order
Sales order
Aging report

Performance reports are:

Reports that compare budgets with actual performance
b)
Reports that show any exception conditions in an organization
c)
Never presented in an exception format
d)
Transaction listings
The sales process begins with:
a)
Placing an order with a vendor
b)
A customer order for goods or services
c)
Production of goods or services
d)
Delivery of goods or services
The primary objective in processing revenues is to:
Sell as many goods as possible
b)
Achieve timely and efficient cash collection
c)
Maximize an organizations sales orders
d)
Only sell goods to customers who can pay their bills
An important input to the sales process is:
a) A customer sales order
b) The cash forecast
c) Aged accounts receivable information
d) A receiving report

33.
)

To forecast cash receipts, information must be collected from:

The purchasing process
b)
Payroll processing
c)
Inventory control systems
d)
The sales process

Which of the following is not an objective of the purchasing process?

Inventory control
b)
Fastest possible processing of payments to vendors
c)
Maintaining vendor records
d)
Forecasting cash outflows

34.
)

35.
)
b)
c)
d)

Which source document is used to request goods?

Purchase order
Shipping notice
Purchase requisition
Sales order

36.
)

37.
)

38.
)

39.

The bill of lading:

Reflects freight charges on goods shipped
b)
Signifies release of goods for shipment to customers
c)
Is sent to the customer with the purchase invoice
d)
Is used to control inventory
Inputs to transaction processing systems:
Are always in hard copy
b)
Are best when input in a graphical format
c)
May be in an electronic format when an EDI system is used
d)
May never be audio
Forecasting cash flows:
Is an objective of transaction processing
b)
Is never considered an objective of transaction processing
c)
Is only possible in computerized AISs
d)
Is considered as a risky activity with which accountants should not be associated
Which of the following is not an objective of the sales process?
a)
Controlling inventory
b)
Tracking sales of goods and/or services to customers
c)
Billing for goods and services
d)
Forecasting sales and cash receipts

40.

All of the following are inputs (source documents) to the sales process except:
a)
Sales order
b)
Shipping notice
c)
Remittance advice
d)
all of the above are source documents to the sales process

41.

Business organizations are recognizing the value of sales data and are purchasing
software solutions to gather, maintain, and use these data to provide better service and
promote customer loyalty. These software solutions are called:
a)
Customer relations data solutions
b)
Customer relationship management solutions
c)
Sales data management solutions
d)
none of the above

42.

Which of the following outputs (reports) are common to both the sales process and the
purchasing process?
a)
Sales analysis reports
b)
Financial statement information
c)
both (a) and (b)
d)
none of the above

43.

All of the following are inputs (source documents) to the purchasing process except:
a)
Purchase order
b)
Vendor listing
c)
Bill of lading
d)
all of the above are source documents to the purchasing process

44.

Which of the following is an objective of the purchasing process?

a)
Collecting information for the financial statements
b)
Making timely and accurate vendor payments
c)
Forecasting cash requirements
d)
Tracking bills of lading

45.

Which of the following statements best describes business process outsourcing?

a)
A company focuses on its core business processes and contracts with another
firm to do the other processes
b)
Companies frequently outsource core business processes
c)
Due to networked enterprises and advanced technology, more employees may
work from their homes or alternate locations
d)
Initially, companies engaged in business process outsourcing to offer employees
more opportunities to travel and more career choices for advancement

46.

Networked enterprises and globalization have enabled a new business model called
business-without-boundaries. Which of the following statements describes this
business model?
a)
Companies no longer have all of their employees in one location
b)
It is called offshoring and companies contract with firms in other countries to do
such business processes as human resources, payroll, and accounting
c)
Companies are under a great deal of scrutiny to manage costs and generate
revenue so they contract with foreign firms to do various business processes at a
lower cost to the company
d)
all of the above statements describe this model

47.

Which of the following statements best describes a business process?

a)
It is a collection of activities in an organization that creates value
b)
The nature and type of processes might vary from industry to industry
c)
It is an activity that increases and/or decreases dollar amounts on the financial
statements
d)
It is an economic event in the life of an organization

48.

Which of the following Business Process Management (BPM) software solutions is most
often associated with the sales process?
a)
Enterprise resource management
b)
Integrated management
c)
Customer relationship management
d)
Supply chain management
e)
None of the above

49.

Much of the input and output related to business processes is now electronic. Which of
the following technologies is becoming increasingly popular to manage inventory?
a)
EDI
b)
RFID tags
c)
Magnetic ink characters that can be quickly and easily scanned
d)
Bluetooth and wireless-enabled laptop computers

25.

The primary objective of a manufacturing organizations production process is to:

a)
Maintain inventories at a zero level

b)
c)
d)

Convert raw materials into finished goods as efficiently as possible

Make sure that there are no product defects
Maintain the documentation and report on an organizations manufacturing
process

26.

The largest expense item on a manufacturing organizations income statement is most

likely to be:
Salaries for production workers
The depreciation associated with manufacturing equipment
The cost of direct materials
Cost of goods sold

27.

Job costing systems are most appropriate for:

a)
Home builders
b)
Textbook publishers
c)
Beverage companies
d)
both a and b are appropriate industries for job costing systems

28.
a)
b)
c)
d)

All of the following are input documents for the production process, except:
A master production schedule
A production order
A material requirements planning document
A bill of materials

a)
b)
c)
d)

29.
a)
b)
c)
d)

An organizations working capital consists of:

Its checking accounts
Both checking and savings accounts
Bank accounts and other liquid assets
Coin and currency only

30.
a)
b)
c)
d)

Which of the following is not a concern of the financing process?

Effective cash management
Optimizing an organizations cost of capital
Minimizing an organizations borrowings
Projecting cash flows

31.
a)
b)
c)
d)

Inputs to the financing process include:

Remittance advices, deposit slips, checks, and stock market data
Remittance advices, deposit slips, checks, and receiving reports
Deposit slips, checks, receiving reports, and purchase requisitions
Deposit slips, checks, purchase requisitions, and financial institution profiles

32.
a)
b)
c)
d)

Time and billing systems are most often used by:

Health care organizations
Professional service organizations
Retail organizations
Not-for-profit organizations

33.
a)

Which of the following statements is not true?

Time and billing systems are similar to job order costing systems
b)
Time and billing systems are an important component of an AIS for
manufacturing firms
c)
A difficult problem for time and billing systems is tracking staff time
d)
Time and billing systems are important in the professional service industry

34.

Which of the following is not a characteristic associated with professional service

organizations?
Lack of a profit motive
Absence of inventories
Importance of human resources
Difficulty in measuring the quantity and quality of output

a)
b)
c)
d)
35.
a)

It is generally true of not-for-profit organizations that they:

Are profit-oriented despite their name
b)
Are always evaluated using profit measures
c)
Are not governed by accounting standards
d)
Emphasize funds rather than income in their internal accounting systems
36.
a)
b)
c)
d)

A major objective of professional service organizations is to:

Decrease billable hours
Increase billable hours
Increase time spent training employees
Bill customers as frequently as possible

37.
a)
b)
c)
d)
38.
a)
b)
c)
d)

Third party billing refers to:

Billing to clients by professional service organizations
Billing to insurance companies by health care organizations
The fact that the customer often does not pay directly for goods purchased in the
health care industry
both b and c are correct

39.

Which of the following characteristics are common to both service and not-for-profit
organizations?
Importance of professional employees
Difficulty in measuring the quality and quantity of output
Inability to inventory product
all of the above

40.

Which of the following is normally more important for a not-for-profit organization

compared to a profit-oriented organization?
Long-range goals
Earning an adequate level of income each accounting period
Long-range budgetary planning and controlling system
Short-range budgetary planning and controlling system

a)
b)
c)
d)

a)
b)
c)
d)
41.

Healthcare organizations:
a)
Are always not-for-profit enterprises
b)
Do not include nursing homes in their industry segment
c)
Have great difficulty in measuring outputs
d)
Do not include patient scheduling functions in their AISs
42.

43.
a)
b)
c)
d)

Which of the following is an example of a not-for-profit organization?

Consulting firm
State university
Public hospital
both b and c are correct

Business process reengineering:

a)
Is an incremental approach to redesigning business processes
b)
Involves redesigning business processes from scratch
c)
Is rarely successful in cutting an organizations costs
d)
Is always welcomed by an organizations employees

Business process reengineering efforts sometimes fail because:

Management gets too involved in the process
Management is too optimistic regarding its expectations from its implementation
Management support can never overcome employee resistance
Employees will never accept change
44.

Resource Management Process includes which of the following?

a)
Human resource management and fixed asset management
b)
Human resource management, inventory management, and fixed asset
management
c)
Human resource management only
d)
Personnel management, payroll management, and fixed asset management

45.

According to the text, all of the following are objectives of the human resource
management process except:
a)
Hiring, training, and employing workers
b)
Counseling employees on retirement and medical benefits
c)
Maintaining employee earnings records
d)
Reporting on payroll deductions

46.

According to the text, which of the following is an output of the human resource
management process?
a)
Retired employee roster
b)
List of training programs for employees
c)
Employee listings
d)
none of the above

47.

Which of the following technologies are now used in conjunction with automated
production process systems to increase efficiencies?
a)
Radio frequency technology
b)
Bar code scanners
c)
FR IDs and advanced electronic tags
d)
all of the above
e)
none of the above

48.

The purpose of Business Process Management is to improve business processes

across the organization. Due to advances in technology:
a)
Managers can streamline these processes
b)
Human resources managers can automate many routine processes
c)
It is more costly to manage all processes throughout the organization
d)
none of the above

49.

Which of the following is most likely the primary reason that organizations are adopting
enterprise asset management (EAM) systems?
a)
To reduce overall operating expenses
b)
To automate manual operations
c)
To reduce the number of employees (labor costs)
d)
none of the above

50.

The most significant difference in the AISs of retail organizations versus other vertical
market organizations is the:
a)
Sophistication of the systems used
b)
Type of training programs available to employees
c)
Point-of-sale data capture
d)
Structure of information that the system provides to managers

51.

AISs can be used to evaluate the performance of not-for-profit organizations by:

a)
Using various process measures
b)
Comparing budget goals to actual performance
c)
Using a number of nonmonetary measures of performance
d)
All of the above
Vertical market accounting software packages typically:
Will cost more than generic accounting software
Affords a company the ability to have software pre-designed to fit their special

1.
a)
b)

needs
c)
d)

Is available for all types of organizations

all of the above are correct

2.

Which of the following software packages is not an example of a middle-range AIS?

a)
Great Plains Dynamics
b)
MAS 90
c)
SAP R/3
d)
Solomon

3.

Many organizations purchased new AISs during the 1990s:

a)
Because of the need for Year 2000 compliance
b)
Because they wanted Internet connectivity
c)
In order to take advantage of opportunities for reengineering
d)
all of the above

)
4.

Integrated accounting software programs generally include all of the following, except:
a)
Graphic reporting capabilities
b)
Internet connectivity
c)
One standardized chart of accounts
d)
The ability to handle multiple companies

5.

Enterprise-wide AISs:
a)
Almost never pay for themselves
b)
Do not include many more features than middle-range accounting software
packages
c)
Are seldom used by multinational organizations
d)
Integrate an organizations financial functions with its other functional areas
)

6.

Which of the following is not an important feature of an enterprise system?

a)
Multiple databases
b)
Centralized database
c)
Functional integration
d)
Back-office functionality

7.

ERP II systems:
a)
Are known as back-office systems
b)
Actually preceded ERP I systems
c)
Extend enterprise sytems to interface with suppliers and customers
d)
Are impossible to implement because enterprises do not like to share data

8.

Which of the following is not true regarding customer relationship management (CRM)
systems?
a)
CRM is actually a set of multiple applications
b)
CRM can help managers to better understand customer purchasing behavior
c)
CRM requires the collection of customer demographic data
d)
Business intelligence tools can enhance CRM

)
9.

Components of an ERP's architecture typically include:

a)
A centralized database and application interfaces
b)
Internet portals and multiple databases

c)
d)

A centralized database running on a mainframe computer

A UNIX operating system

)
10.

Which of the following business processes or functions is unlikely to be part of an

enterprise system?
a)
Accounting/financing
b)
Human resources
c)
Manufacturing
d)
Sales or distribution
e)
all of the above are likely to be included in an enterprise system

11.

)
12.

Business process reengineering, as it relates to an enterprise system implementation:

a)
Always precedes the implementation
b)
May precede or be concurrent with implementation depending on the need to
conform with industry best practices
c)
May precede or succeed an implementation depending on the need to conform
with industry best practices
d)
Always succeeds the implementation
Training and change management activities:
a)
Take place just before the go live stage of implementation
b)
Are most effective when conducted throughout design, go live, and postimplementation follow-up
c)
Include technical training only
d)
Do not include the design of user interfaces

)
13.

Which of the following is true regarding ERP costs?

a)
Enterprise systems tend to be less costly than integrated accounting software
b)
Enterprise systems are always less costly than best of breed software solutions
c)
Costs associated with reassigned employees have nothing to do with the true
cost of an enterprise system
d)
There may be many costs that continue after systems implementation

41.

When we talk about a Value-Added Reseller, in the context of accounting and enterprise
software, we are referring to an individual or business that:
a)
Usually assists small businesses select entry-level, small business software
b)
Is a qualified installer of mid-level or high-end accounting software
c)
Makes special arrangements with software vendors and is able to train
customers
d)
both (b) and (c)
e)
none of the above

42.

An application service provider (ASP):

a)
Owns the software and processes your data on the ASPs computers
b)
Hosts the software and processes your data on your computer system
c)
Is an outsourcing company that processes your data, prepares reports that you
specify, and then mails the results on a weekly basis
d)
none of the above

43.

ePeachtree is an example of:

a)
A value-added reseller
b)
An application service provider
c)
An ERP
d)
none of the above

44.

Which of the following is considered an integrated software system?

a)
Material requirements planning systems (MRP I)
b)
Manufacturing resource planning systems (MRP II)
c)
Enterprise resource planning systems (ERP)
d)
all of the above

45.

When we talk about front-office capabilities of todays ERP systems, we are referring to
which of the following?
a)
The payroll functions
b)
The human resource functions
c)
The administrative functions
d)
none of the above

46.

Extended enterprise information systems facilitate:

a)
Supply chain management
b)
Partner relationship management
c)
Advanced planning and scheduling
d)
all of the above
e)
none of the above

47.

Which of the following is not a sign that indicates the need for a new AIS?
a)
A new vendor has just announced an AIS package with several features your
system does not have
b)
A slowdown in inventory turnover
c)
The owner is concerned about cash flows and profitability
d)
It is taking longer to collect on receivables
e)
It is taking longer to close the books

48.

A software package at the entry-level, such as Peachtree:

a)
Is likely to cost a few thousand dollars to implement fully
b)
Is scalable
c)
Is unlikely to incorporate Internet connectivity
d)
Is suitable for many businesses with less than $5 million in revenues
e)
Will include sample, customizable Charts of Accounts

49. Which of the following is not true regarding selecting a new AIS?
a)
It is usually cheaper to build a new AIS software program than to purchase it
b)
It is much easier today to learn about software options because of the Internet
c)
It is always a good idea to get expert help in choosing an ERP system
d)
Middle-range and high-end AIS software are not available in shopping malls