AC 389 Ch 5
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AC 389 Ch 5

Course Number: AC 389, Summer 2011

College/University: Alabama

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Chapter 5 Accounting Information Systems and Business Processes: Part II True-False Questions 1. The human resource management process is the same thing as the payroll process. 2. The production process is only present in service organizations. 3. The primary objective of the production process is to minimize the use of raw materials in the production process. 4. An AISs cost accounting subsystem is an...

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5 Accounting Chapter Information Systems and Business Processes: Part II True-False Questions 1. The human resource management process is the same thing as the payroll process. 2. The production process is only present in service organizations. 3. The primary objective of the production process is to minimize the use of raw materials in the production process. 4. An AISs cost accounting subsystem is an important part of the production process. 5. Inputs to the production process include job time cards, material requisition forms, and the master production schedule. 6. With a job costing system it is not possible to keep track of costs for each item or group of items produced. 7. With a just-in-time inventory approach, raw material inventories are always zero. 8. The bill of materials lists the types and quantities of parts needed to assemble each unit of product. 9. Production cost reports are useful for internal control since they help in calculating budget variances. 10. The financing process concerns a companys acquisition and use of financial resources. 11. Effective cash management is not an objective of the financing process. 12. Financial planning models are useful to financial managers in helping them to determine an optimal strategy for acquiring and investing an organizations financial resources. 13. Deposit slips and remittance advices are examples of source documents associated with the financing process. 14. A cash budget is a primary output of the financing process. 15. The term vertical market refers to software distribution processes. 16. Time and billing features in accounting software are important to engineering, legal, and accounting firms. 17. One distinguishing feature of organizations in the professional service industry is the difficulty in measuring the quantity and quality of their output. TB 5. 1 18. Not-for-profit organizations focus primarily on the flow of funds rather than income in their internal accounting systems. 19. Point-of-sale accounting systems are important in the health care industry. 20. Third party billing refers to the payment of many health care bills by insurance companies rather than by patients. 21. The AIS for the health care industry is particularly complex due to third party billing. 22. The objective of the fixed asset management function is to manage the purchase, depreciation, and disposal of an organizations fixed assets. 23. the The production process begins with a request for raw materials and ends with transfer of finished goods to warehouses. 24. The objective of a manufacturing organizations production process is to convert raw materials to finished goods as quickly as possible to free up cash resources. Multiple-Choice Questions 25. The primary objective of a manufacturing organizations production process is to: a) Maintain inventories at a zero level b) Convert raw materials into finished goods as efficiently as possible c) Make sure that there are no product defects d) 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: a) Salaries for production workers b) The depreciation associated with manufacturing equipment c) The cost of direct materials d) 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. All of the following are input documents for the production process, except : a) A master production schedule b) A production order c) A material requirements planning document d) A bill of materials TB 5. 2 29. An organizations working capital consists of: a) Its checking accounts b) Both checking and savings accounts c) Bank accounts and other liquid assets d) Coin and currency only 30. Which of the following is not a concern of the financing process? a) Effective cash management b) Optimizing an organizations cost of capital c) Minimizing an organizations borrowings d) Projecting cash flows 31. Inputs to the financing process include: a) Remittance advices, deposit slips, checks, and stock market data b) Remittance advices, deposit slips, checks, and receiving reports c) Deposit slips, checks, receiving reports, and purchase requisitions d) Deposit slips, checks, purchase requisitions, and financial institution profiles 32. Time and billing systems are most often used by: a) Health care organizations b) Professional service organizations c) Retail organizations d) Not-for-profit organizations 33. Which of the following statements is not true? a) 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 billing and systems are important in the professional service industry 34. Which of the following is not a characteristic associated with professional service organizations? a) Lack of a profit motive b) Absence of inventories c) Importance of human resources d) Difficulty in measuring the quantity and quality of output 35. It is generally true of not-for-profit organizations that they: a) 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 major objective of professional service organizations is to: a) Decrease billable hours b) Increase billable hours c) Increase time spent training employees d) Bill customers as frequently as possible TB 5. 3 37. Which of the following is an example of a not-for-profit organization? a) Consulting firm b) State university c) Public hospital d) both b and c are correct 38. Third party billing refers to: a) Billing to clients by professional service organizations b) Billing to insurance companies by health care organizations c) The fact that the customer often does not pay directly for goods purchased in the health care industry d) both b and c are correct 39. Which of the following characteristics are common to both service and not-for-profit organizations? a) Importance of professional employees b) Difficulty in measuring the quality and quantity of output c) Inability to inventory product d) 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? a) Long-range goals b) Earning an adequate level of income each accounting period c) Long-range budgetary planning and controlling system d) Short-range budgetary planning and controlling system 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. 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 43. Business process reengineering efforts sometimes fail because: a) Management gets too involved in the process b) Management is too optimistic regarding its expectations from its implementation c) Management support can never overcome employee resistance d) 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 TB 5. 4 TB 5. 5 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 TB 5. 6
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