AUD 3 Internal Control 17 - 2 Operating Cycles - Production and Conversion Cycle

Question 1

Production and Conversion Cycle

The production and conversion cycle deals with manufacturing operations.

Most of the controls are similar to those in the purchasing and spending cycle, since inventory may be involved in both cycles, the difference being whether they were manufactured or purchased.

Acquisition of, and accounting for, raw materials purchased in a manufacturing process would be similar to merchandise inventory in a nonmanufacturing entity.

Examples of controls related to the management assertions for manufactured inventory include:

• Presentation and Disclosure
• Existence or Occurrence
• Completeness and Cutoff
• Valuation, Allocation and Accuracy

Answer 1

Production and Conversion Cycle

The production and conversion cycle deals with manufacturing operations.

Most of the controls are similar to those in the purchasing and spending cycle, since inventory may be involved in both cycles, the difference being whether they were manufactured or purchased.

Acquisition of, and accounting for, raw materials purchased in a manufacturing process would be similar to merchandise inventory in a nonmanufacturing entity.

Examples of controls related to the management assertions for manufactured inventory include:

• Presentation and Disclosure
• Existence or Occurrence
• Completeness and Cutoff
• Valuation, Allocation and Accuracy

Question 2

Production and Conversion Cycle

Examples of controls related to the management assertions for manufactured inventory include:

• Presentation and Disclosure
• Existence or Occurrence
• Completeness and Cutoff
• Valuation, Allocation and Accuracy

• Presentation and Disclosure
– Direct labor charged to individual time tickets is compared to the total direct labor charged to work-in-process, in order to ensure direct labor costs have not been charged to manufacturing overhead.

• Existence or Occurrence
– Perpetual inventory records are compared with goods on hand.

• Completeness and Cutoff
– Forms used for material requisitions are prenumbered and periodically accounted for.

• Valuation, Allocation and Accuracy
– Subsidiary records are periodically reconciled to inventory control accounts.

Answer 2

Production and Conversion Cycle

Examples of controls related to the management assertions for manufactured inventory include:

• Presentation and Disclosure
• Existence or Occurrence
• Completeness and Cutoff
• Valuation, Allocation and Accuracy

• Presentation and Disclosure
– Direct labor charged to individual time tickets is compared to the total direct labor charged to work-in-process, in order to ensure direct labor costs have not been charged to manufacturing overhead.

• Existence or Occurrence
– Perpetual inventory records are compared with goods on hand.

• Completeness and Cutoff
– Forms used for material requisitions are prenumbered and periodically accounted for.

• Valuation, Allocation and Accuracy
– Subsidiary records are periodically reconciled to inventory control accounts.

Question 3

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 3

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 4

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Answer 4

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Question 5

Production and Conversion Cycle

Using the mnemonic RACE for ac_______ balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 5

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 6

Production and Conversion Cycle

Using the mnemonic RACE for account ba_____s:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 6

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 7

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• R_____ and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 7

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 8

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and o_________
• Allocation and Valuation
• Completeness
• Existence

Answer 8

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 9

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• A________ and Valuation
• Completeness
• Existence

Answer 9

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 10

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and V________
• Completeness
• Existence

Answer 10

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 11

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• C__________
• Existence

Answer 11

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 12

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• E________

Answer 12

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Question 13

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Answer 13

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Question 14

Production and Conversion Cycle

• R______ and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Answer 14

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Question 15

Production and Conversion Cycle

• Rights and o_______

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Answer 15

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Question 16

Production and Conversion Cycle

• Rights and obligations

– Te__s of notes,

Answer 16

Production and Conversion Cycle

• Rights and obligations

– Terms of notes,

Question 17

Production and Conversion Cycle

• Rights and obligations

– Terms of n___s, lines of credit,

Answer 17

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit,

Question 18

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, l___s of credit, and other debt instruments

Answer 18

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments

Question 19

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of cr__it, and other debt instruments

Answer 19

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments

Question 20

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other d__t instruments

Answer 20

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments

Question 21

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt ins________s are evaluated

Answer 21

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

Question 22

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are ev_____ed to determine

Answer 22

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine

Question 23

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to det_______ if inventories have been pledged as collateral.

Answer 23

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

Question 24

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if in______es have been pledged as collateral.

Answer 24

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

Question 25

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pl__ged as collateral.

Answer 25

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

Question 26

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as co______ral.

Answer 26

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

Question 27

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Rights and obligations

– Terms of notes, lines of credit, and other d___ inst______s are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

Answer 27

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

Question 28

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Allo_____ and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

Answer 28

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

Question 29

Production and Conversion Cycle

• Allocation and V________

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

Answer 29

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

Question 30

Production and Conversion Cycle

• Allocation and Valuation

– All_______s of salaries and wages

Answer 30

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages

Question 31

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of s____ies and wages

Answer 31

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages

Question 32

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and w__es to inventory

Answer 32

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory

Question 33

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to in______ry are reviewed

Answer 33

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

Question 34

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are rev___ed

to make certain appropriate amounts are included.

Answer 34

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

Question 35

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make cert___ appropriate amounts are included.

Answer 35

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

Question 36

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain app_______ amounts are included.

Answer 36

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

Question 37

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate am____s are included.

Answer 37

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

Question 38

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are in___ded.

Answer 38

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

Question 39

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Allocation and Valuation

– Allo______s of salaries and wages to in____ry are reviewed to make certain appropriate amounts are included.

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

Answer 39

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

Question 40

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

Answer 40

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

Question 41

Production and Conversion Cycle

• Com________

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

Answer 41

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

Question 42

Production and Conversion Cycle

• Completeness

– Fo__s used for the acquisition of raw materials

Answer 42

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials

Question 43

Production and Conversion Cycle

• Completeness

– Forms u__d for the acquisition of raw materials

Answer 43

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials

Question 44

Production and Conversion Cycle

• Completeness

– Forms used for the acq_______ of raw materials

Answer 44

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials

Question 45

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of r__ materials and other items

Answer 45

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items

Question 46

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw m_______s and other items are prenumbered

Answer 46

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

Question 47

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other it__s are prenumbered

Answer 47

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

Question 48

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are pren______ed

and all numbers are accounted for.

Answer 48

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

Question 49

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all nu____s are accounted for.

Answer 49

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

Question 50

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are acc____ed for.

Answer 50

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

Question 51

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and a__ numbers are accounted for.

Answer 51

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

Question 52

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are pren_____ed and all numbers are ac_____ed for.

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Answer 52

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Question 53

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Answer 53

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Question 54

Production and Conversion Cycle

• Exi______

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Answer 54

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Question 55

Production and Conversion Cycle

• Existence

– Perpetual inv_____y records

Answer 55

Production and Conversion Cycle

• Existence

– Perpetual inventory records

Question 56

Production and Conversion Cycle

• Existence

– Per_____ inventory records

Answer 56

Production and Conversion Cycle

• Existence

– Perpetual inventory records

Question 57

Production and Conversion Cycle

• Existence

– Perpetual inventory re____s are regularly reconciled

Answer 57

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled

Question 58

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly re____iled to goods in inventory

Answer 58

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

Question 59

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to g__ds in inventory

Answer 59

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

Question 60

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in in_____ory

to make certain that

Answer 60

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that

Question 61

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make cer___n that recorded amounts are still on hand.

Answer 61

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

Question 62

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that re___ed amounts are still on hand.

Answer 62

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

Question 63

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded am____s are still on hand.

Answer 63

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

Question 64

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on h__d.

Answer 64

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

Question 65

Production and Conversion Cycle

Using the mnemonic R__E for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Answer 65

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Question 66

Production and Conversion Cycle

As with the pur____ing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Answer 66

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 67

Production and Conversion Cycle

As with the purchasing and s____ing cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Answer 67

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 68

Production and Conversion Cycle

As with the purchasing and spending cycle,

the ob____ives within the production and conversion cycle include properly recording and executing transactions.

Answer 68

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 69

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the pro_______ and conversion cycle include properly recording and executing transactions.

Answer 69

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 70

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and co________ cycle include properly recording and executing transactions.

Answer 70

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 71

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly re____ing and executing transactions.

Answer 71

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 72

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and ex____ing transactions.

Answer 72

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 73

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing trans______s.

Answer 73

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 74

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include pro___ly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Answer 74

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 75

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly re____ing and ex____ing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Answer 75

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 76

Production and Conversion Cycle

In addition, an especially difficult ob______ve of internal control

Answer 76

Production and Conversion Cycle

In addition, an especially difficult objective of internal control

Question 77

Production and Conversion Cycle

In addition, an especially di______lt objective of internal control

Answer 77

Production and Conversion Cycle

In addition, an especially difficult objective of internal control

Question 78

Production and Conversion Cycle

In addition, an especially difficult objective of internal con____ with respect to manufacturing processes

Answer 78

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

Question 79

Production and Conversion Cycle

In addition, an especially difficult objective of int_____ control with respect to manufacturing processes

Answer 79

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

Question 80

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to ma_______ring processes

Answer 80

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

Question 81

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing p______ses

is maintaining proper custody as raw materials

Answer 81

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials

Question 82

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is mai_____ing proper custody as raw materials

Answer 82

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials

Question 83

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper c___ody as raw materials become work-in-process

Answer 83

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

Question 84

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining pr___r custody as raw materials become work-in-process

Answer 84

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

Question 85

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as r__ materials become work-in-process

Answer 85

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

Question 86

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-pro____

Answer 86

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

Question 87

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become w__k-in-process

Answer 87

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

Question 88

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw m_____als become work-in-process and then finished goods.

Answer 88

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 89

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then fi____ed goods.

Answer 89

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 90

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished g__ds.

Answer 90

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 91

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult ob_____ of internal co_____ with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Answer 91

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 92

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is mai_____ing proper c______y as raw materials become work-in-process and then finished goods.

Answer 92

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 93

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw ma_____ls become w__k-in-process and then f__ished goods.

Answer 93

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 94

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to ma_______ing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired and then from inventory to the shipping department when sold.

Answer 94

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired and then from inventory to the shipping department when sold.

Question 95

Production and Conversion Cycle

In contrast, in_______y in a merchandising company

Answer 95

Production and Conversion Cycle

In contrast, inventory in a merchandising company

Question 96

Production and Conversion Cycle

In contrast, inventory in a mer______sing company normally only goes from the receiving department to inventory

Answer 96

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

Question 97

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the re____ing department to inventory

Answer 97

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

Question 98

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only g_es from the receiving department to inventory

Answer 98

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

Question 99

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving dep______ to inventory

Answer 99

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

Question 100

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally o__y goes from the receiving department to inventory

Answer 100

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

Question 101

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inv_____y when acquired

Answer 101

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

Question 102

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when ac__ired

and then from inventory

Answer 102

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory

Question 103

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from in______y to the shipping department when sold.

Answer 103

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Question 104

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the s___ping department when sold.

Answer 104

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Question 105

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when s__d.

Answer 105

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Question 106

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the re____ing department to inventory when ac___red

and then from inventory to the shipping department when sold.

Answer 106

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Question 107

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from in____ory to the s____ing department when sold.

Answer 107

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Question 108

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

Answer 108

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

Question 109

“Terms of debt instruments are evaluated to determine if inventories have been pledged as collateral.”

Referred to which mnemonic RACE for account balances?

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 109

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Question 110

” Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.”

Referred to which mnemonic RACE for account balances?

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 110

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

Question 111

“Forms used for the acquisition of raw materials are prenumbered and all numbers are accounted for.”

Referred to which mnemonic RACE for account balances?

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 111

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

Question 112

“Allocations of salaries to inventory are reviewed to make certain appropriate amounts are included.”

Referred to which mnemonic RACE for account balances?

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 112

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

Question 113

“Terms of notes are evaluated to determine if inventories have been pledged as collateral.”

Referred to which mnemonic RACE for account balances?

• Rights and obligations
• Allocation and Valuation
• Completeness
• Existence

Answer 113

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

Question 114

What are the control objectives within the production and conversion cycle?

Answer 114

What are the control objectives within the production and conversion cycle?

Answer: Properly recording and executing transactions.

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

Question 115

What are the control objectives within the production and conversion cycle?

Properly re____ing and executing transactions.

Answer 115

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

Question 116

What are the control objectives within the production and conversion cycle?

Properly recording and ex____ing transactions.

Answer 116

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

Question 117

What are the control objectives within the production and conversion cycle?

Properly recording and executing ___________.

Answer 117

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

Question 118

What are the control objectives within the production and conversion cycle?

Properly _________ and executing transactions.

Answer 118

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

Question 119

What are the control objectives within the production and conversion cycle?

Properly recording and __________ transactions.

Answer 119

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

Question 120

What are the control objectives within the production and conversion cycle?

________ recording and executing transactions.

Answer 120

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

Question 121

What is the internal control objective with respect to manufacturing processes?

Answer 121

What is the internal control objective with respect to manufacturing processes?

Answer: Maintaining proper custody

(Raw materials become work-in-process and then finished goods.)

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

Question 122

What is the internal control objective with respect to manufacturing processes?

Maintaining proper _________

(as raw materials become work-in-process and then finished goods.)

Answer 122

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

Question 123

What is the internal control objective with respect to manufacturing processes?

Maintaining _______ custody

(as raw materials become work-in-process and then finished goods.)

Answer 123

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

Question 124

What is the internal control objective with respect to manufacturing processes?

_________ proper custody

(as raw materials become work-in-process and then finished goods.)

Answer 124

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

Question 125

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as ___ materials become work-in-process and then finished goods.)

Answer 125

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

Question 126

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw _________ become work-in-process and then finished goods.)

Answer 126

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

Question 127

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become _______________ and then finished goods.)

Answer 127

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

Question 128

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then _________ goods.)

Answer 128

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

Question 129

How does inventory travel at acquisition for merchandising company?

Answer 129

How does inventory travel at acquisition for merchandising company?

Answer: Inventory goes from the receiving department to inventory when acquired

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired and then from inventory to the shipping department when sold.

Question 130

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

Answer 130

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

Question 131

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

Answer 131

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.