Deck 12: Other Business Process

Question 1

STR Corporation has created a "shareholder data" table for use in its financing process. Which of the following fields would least likely be included in the table?

A) Number of shares currently owned.
B) Date of first stock purchase.
C) Shareholder birthday.
D) Number of shares for first stock purchase.

Answer 1

A

Question 2

Which business process is principally concerned with issues like coordinating benefits and evaluating performance?

A) Conversion.
B) Financing.
C) Human resource.
D) Acquisition/payment.

Answer 2

C

Question 3

Which of the following forms is most closely linked to a materials requisition?

A) Production cost report.
B) Job cost sheet.
C) Purchase order.
D) Materials move ticket.

Answer 3

D

Question 4

Which business process is principally concerned with production?

A) Conversion.
B) Financing.
C) Human resource.
D) Acquisition/payment.

Question 5

Which form accumulates data on pay rates and time spent on a specific job?

A) Labor time ticket.
B) Production cost report.
C) Labor requisition.
D) Form W-4.

Question 6

STR Corporation writes two checks per year to First National Bank; the accounting information system records the checks by debiting an expense. First National Bank is most likely:

A) A customer.
B) A stockholder.
C) A vendor.
D) A lender.

Question 7

Horace is using his firm's accounting information system to prepare W-2 forms for all employees. Which of the following relational database tables is least necessary?

A) Employer table.
B) Employee table.
C) Payroll table.
D) Pension contributions table.

Question 8

All of the following documents originate in the production department and end in the accounting department except:

A) Job cost sheet.
B) Labor time ticket.
C) Production cost report.
D) Materials move ticket.

Question 9

Which business process is principally concerned with the debt and equity sections of a balance sheet?

A) Conversion.
B) Financing.
C) Human resource.
D) Sales/collection.

Question 10

A database table for the financing process contains a field called "shareholder's last name." The table would probably be used for which type of financing process transaction?

A) Dividend distribution.
B) Dividend declaration.
C) Interest payments.
D) Short-term borrowing.

Question 11

A journal entry credits raw materials and debits an asset account. From that information we can conclude that the system is:

A) A job costing system.
B) A process costing system.
C) A hybrid costing system.
D) Either a job costing or a process costing system.

Question 12

Which document would a production manager use to request goods from the warehouse?

A) Materials requisition.
B) Job cost sheet.
C) Production cost report.
D) Materials move ticket.

Question 13

Which type of costing system measures material, labor and overhead: (i) job costing, (ii) process costing?

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 14

Goods are produced based "to order" in ______ systems.

A) Job costing.
B) Process costing
C) General ledger.
D) Value chain.

Question 15

Which two payroll forms would most likely reference data in the same database table(s)?

A) Form 940 and Form 941.
B) Payroll register and employee earnings record.
C) Form 1099 and employee earnings record.
D) Form 940 and Form 1099.

Question 16

All of the following information items are associated with long-term debt transactions except:

A) Market price of a share of stock.
B) Market interest rate.
C) Coupon interest rate.
D) Number of annual interest payments.

Question 17

Goods are homogeneous in ______ systems.

A) Job costing.
B) Process costing.
C) Hybrid costing.
D) Overhead.

Question 18

All of the following transactions are associated with the financing process except:

A) Operating cash flow transactions.
B) Issuance of capital stock transactions.
C) Dividend distributions.
D) Purchase of treasury shares.

Question 19

Which payroll form is least likely to trigger a journal entry in the accounting information system?

A) Form W-2.
B) Payroll register.
C) Form 940.
D) Form 1099.

Question 20

In the financing business process, a sinking fund is most closely associated with:

A) Long-term borrowing.
B) Stock issuances.
C) Dividend payments.
D) Interest payments.

Question 21

The following sets of symbols apply to Questions 42 through 45:
The purpose of a materials requisition is most likely to be depicted with:

A) Symbol A. b. Symbol B.
C) Symbol C.
D) Symbol D.

Question 22

"Equipment may break down" is a relevant risk in most: (i) conversion processes, (ii) human resource processes.

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 23

Which payroll form(s) incorporate data for more than one accounting period: (i) employee earnings record, (ii) Form W-4, (iii) Form W-2?

A) i and ii only.
B) i and iii only.
C) ii and iii only.
D) i, ii and iii.

Question 24

Data encryption is a requirement for strong internal control in: (i) the conversion process, (ii) the financing process.

A) i only. b. ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 25

The following sets of symbols apply to Questions 42 through 45:
Which symbol is most likely to depict interviewing a candidate for a job?

A) Symbol A. b. Symbol B.
C) Symbol C.
D) Symbol D.

Question 26

James is married with two children. That information would be necessary for completing:

A) Form W-2.
B) Form 1099.
C) Form 940.
D) Form 941.

Question 27

As a form of internal control, "adequate supervision" is useful in: (i) the human resource process, (ii) the financing process, (iii) the conversion process.

A) i and ii only.
B) i and iii only.
C) ii and iii only.
D) i, ii and iii.

Question 28

The following sets of symbols apply to Questions 42 through 45:
Which symbol is most likely to depict the issuance of capital stock?

A) Symbol A. b. Symbol B.
C) Symbol C.
D) Symbol D.

Question 29

The risk of raw material spoilage would cause the most concern for:

A) A restaurant.
B) A steel manufacturer.
C) A university.
D) An office supplies store.

Question 30

A flowchart of the preceding process would include all of the following columns except:

A) LCF Corporation.
B) VP of Finance.
C) Board of directors.
D) Accounting clerks.

Question 31

In the financing business process, "separation of duties" means that the same employee should not:

A) Write checks for interest payments and maintain the shareholder database.
B) Maintain shareholder and lender databases.
C) Track market interest rates and make journal entries.
D) Calculate amounts and sign checks for dividend payments.

Question 32

A field that calculates total net pay for each employee would be necessary in a database table for: (i) a payroll register, (ii) an employee earnings record.

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 33

How many times would this symbol appear in a flowchart of LCF's process:

A) Zero.
B) One.
C) Two.
D) Three or more.

Question 34

How many of the following symbol would appear in a flowchart of LCF's process:

A) One.
B) Two.
C) Three.
D) More than three.

Question 35

The following sets of symbols apply to Questions 42 through 45:
A properly prepared Level Zero data flow diagram of the financing process is least likely to include:

A) Symbol A. B. Symbol B.
C) Symbol C.
D) Symbol D.

Question 36

As a form of internal control, a bank reconciliation would be least relevant for which business process?

A) Conversion.
B) Human resource.
C) Financing.
D) Sales/collection.

Question 37

The risk of hiring unqualified employees would be a concern in which business process(es): (i) human resource, (ii) conversion.

A) i only.
B) ii only.
C) Both i and ii.
D) Neither i nor ii.

Question 38

How many times would this symbol appear in a flowchart of LCF's process:

A) Zero.
B) One.
C) Two.
D) More than two.

Question 39

The flowchart of LCF's financing process would indicate an internal control weakness if appeared in the ___ column.

A) Accounting clerks.
B) Send checks.
C) Board of directors.
D) Online database.

Question 40

Leon is preparing a payroll register that includes Sue's data. Which of the following phrases best describes $420 on the payroll register?

A) Total gross pay.
B) Total regular pay.
C) Total net pay.
D) None of the above.

Question 41

The following paragraph applies to Questions 61 through 65:
Nicole owns and operates The Foothill Grill, a small local breakfast shop. She's hired you as a consultant to help redesign the shop's accounting information system. Nicole has financed the restaurant's operations with a combination of her own money, investments from friends and family and bank loans. She currently employs six staff in addition to herself: two cooks, three servers and a custodian.
Nicole wants to expand The Foothill Grill's operations and is considering incorporating and opening other locations in her geographic area. If she follows through with that plan, what related transactions would you expect to see in her new accounting information system?

Question 42

Conversion process documents
Phil is a production manager at RCK Corporation; he needs raw materials from the warehouse. Create an appropriately titled form Phil could use for that purpose.

Question 43

Payroll forms
Indicate the payroll form described in each item below.
_________ 1. Computes payroll data for all employees for a given pay period.
_________ 2. Establishes payroll withholding status.
_________ 3. Reports amounts paid to an independent contractor.
_________ 4. Reports amounts withheld by employer to IRS.
_________ 5. Reports employer's federal unemployment taxes.
_________ 6. Reports year-end information for tax purposes.
_________ 7. Summarizes payroll data for a single employee for multiple pay periods.

Question 44

The following paragraph applies to Questions 61 through 65:
Nicole owns and operates The Foothill Grill, a small local breakfast shop. She's hired you as a consultant to help redesign the shop's accounting information system. Nicole has financed the restaurant's operations with a combination of her own money, investments from friends and family and bank loans. She currently employs six staff in addition to herself: two cooks, three servers and a custodian.
You explain to Nicole that her payroll system should incorporate several forms to aid in processing and recordkeeping. Identify three payroll forms Nicole should use; distinguish each form based on the data it contains and the ways it would be used in the accounting information system.

Question 45

The following paragraph applies to Questions 61 through 65:
Nicole owns and operates The Foothill Grill, a small local breakfast shop. She's hired you as a consultant to help redesign the shop's accounting information system. Nicole has financed the restaurant's operations with a combination of her own money, investments from friends and family and bank loans. She currently employs six staff in addition to herself: two cooks, three servers and a custodian.
Identify one risk The Foothill Grill faces in each of the following categories: financial, operational and strategic. For each risk you identify, recommend one internal control to address it; explain whether each control is primarily preventive, detective or corrective in nature.

Question 46

Costing systems
Indicate whether each of the following items applies to: (a) process costing only, (b) job costing only, (c) both process and job costing or (d) neither process nor job costing.
_________ 1. Accounts like "cost of goods sold" and "manufacturing overhead" included in the AIS.
_________ 2. Can incorporate separation of duties.
_________ 3. Costs reported in financial statements.
_________ 4. Documents include materials requisitions and labor time tickets.
_________ 5. Emphasizes difference.
_________ 6. Equipment purchases debited to direct materials.
_________ 7. Flowcharts of production processes look alike in many different organizations.
_________ 8. General ledger would contain accounts like "painting" and "finishing".
_________ 9. Products look alike.
_________ 10. Summarizes information with a production cost report.

Question 47

The following paragraph applies to Questions 61 through 65:
Nicole owns and operates The Foothill Grill, a small local breakfast shop. She's hired you as a consultant to help redesign the shop's accounting information system. Nicole has financed the restaurant's operations with a combination of her own money, investments from friends and family and bank loans. She currently employs six staff in addition to herself: two cooks, three servers and a custodian.
You explain to Nicole that you'll be organizing your work in terms of the Grill's business processes. She's familiar with the Sales/collection and acquisition/payment processes, but hasn't heard of any others. Identify and describe three other business processes you should include as part of your work.

Question 48

Financing process transactions
In the space provided, briefly explain each of the following financing process transactions.

Question 49

The following paragraph applies to Questions 61 through 65:
Nicole owns and operates The Foothill Grill, a small local breakfast shop. She's hired you as a consultant to help redesign the shop's accounting information system. Nicole has financed the restaurant's operations with a combination of her own money, investments from friends and family and bank loans. She currently employs six staff in addition to herself: two cooks, three servers and a custodian.
In preparing menu items for customers, does The Foothill Grill use a job order or a process costing system? Explain your response.

Question 50

Human resource process documentation
Lawrence submitted his resume to a local CPA firm shortly before finishing his accounting degree. A hiring manager at the firm added Lawrence's resume to the others and eventually sorted them by grade point average. The hiring manager determined the number of positions available based on the budget and conversations with the other firm personnel. The hiring manager sent out e-mails to the top twenty candidates and set up interviews with each. After the first interview, half the candidates were invited back for a second interview; from that group, the firm eventually hired three new employees. With each interview, the hiring manager and other firm personnel made notes about each candidate in a database organized by candidate name. The hiring manager sent out offer letters to each new employee; the letters specified details like salary, department and position title.
Prepare a Level Zero data flow diagram of the preceding process.