Mid Course Exam II Acct 3122 Flashcards
This question requires using the check digit formula presented in this chapter (page 231). Calculate check digits for the following hypothetical account numbers:
5100
Multiply each digit by 5,4,3,2:
5x5=25 1x4=4 0x3=0 0x2=0
2+5+4=11
Subtracting from nearest 11 multiple: 11-11=0
An EDP input control is designed to ensure that:
C. data received for processing are properly authorized and converted to machine-readable form
In designing a payroll system, it is known that no individual’s paycheck can amount to more than $3,000 for a single week. As a result, the payroll program has been written to bypass writing a check and will print out an error message if any payroll calculation results in more than $3,000. This type of control is called
a limit or reasonableness test.
Tracing bills of lading to sales invoices provides evidence that:
Select one: A. shipments to customers were invoiced B. shipments to customers were recorded as sales C. recorded sales were shipped D. invoiced sales were shipped.
A. shipments to customers were invoiced
Shipping documents should be compared with sales records or invoices to:
Select one:
A. determine whether payments are applied properly to customer accounts
B. ensure that shipments are billed to customers
C. determine whether unit prices billed are in accordance with sales contracts
D. ascertain whether all sales are supported by shipping documents.
B. ensure that shipments are billed to customers
Which of the following would the auditor consider to be an incompatible operation if the cashier receives remittances from the mailroom?
Select one:
A. The cashier prepares the daily deposit.
B. The cashier makes the daily deposit at a local bank.
C. The cashier posts the receipts to the accounts receivable subsidiary ledger cards.
D. The cashier endorses the checks.
C. The cashier posts the receipts to the accounts receivable subsidiary ledger cards.
As payments are received, one mailroom employee is assigned the responsibility of prelisting receipts and preparing the deposit slip prior to forwarding the receipts, deposit slip, and remittance advices to accounts receivable for posting. Accounts receivable personnel re-foot the deposit slip, stamp a restrictive endorsement on the back of each check, and then forward the receipts and deposit slip to the treasury department. Evaluate the internal control of the described process. Which of the following is a reasonable assessment of internal control in this process?
Select one:
A. adequate internal control
B. inadequate internal control because mailroom employees should not have access to cash
C. inadequate internal control because treasury employees should prepare the deposit slip
D. inadequate internal control because of a lack of segregation of duties
D. inadequate internal control because of a lack of segregation of duties
Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded?
Select one:
A. The billing department supervisor sends copies of approved sales orders to the credit department for comparison with authorized credit limits and current customer account balances.
B. The accounting department supervisor independently reconciles the accounts receivable subsidiary ledger with the accounts receivable control account monthly.
C. The accounting department supervisor controls the mailing of monthly statements to customers and investigates any differences reported by customers.
D. The billing department supervisor matches pre-numbered shipping documents with entries in the sales journal.
D. The billing department supervisor matches pre-numbered shipping documents with entries in the sales journal.
Techniques used to measure activities in a production framework
Work measurement
Consists of systems analysis, design, and implementation
Systems development project
Charts the flow of documents and processing between different entities, represented by columns
Analytic flow chart
Uses pools and lanes in swimlanes to organize activities
Charting technique used to document the logical design of a system
Graphical representation of the sequence of activities of business processes
Business process modelling notation
Data flow diagram
Business process diagram
In a properly designed internal accounting control system, the same employee should not be permitted to:
prepare disbursement vouchers and sign checks
Which of the following would be the most appropriate test to determine whether purchase orders are being processed on a timely basis?
Compare dates of selected purchase orders with those of purchase requisitions.
To avoid potential errors and irregularities, a well-designed system of internal accounting control in the accounts payable area should include a separation of which of the following functions?
cash disbursements and vendor invoice verification
Which of the following is an effective internal accounting control over cash payments?
Signed checks should be mailed under the supervision of the check signer.
When goods are received, the receiving clerk should match the goods with the:
vendor’s shipping document and the purchase order
For internal control purposes, which of the following individuals preferably should be responsible for the distribution of payroll checks?
receptionist
An appropriate compliance test to confirm that only valid employees are on the payroll is to ensure that:
payroll bank accounts are reconciled monthly to appropriate personnel.
Which of the following internal accounting control procedures could best prevent direct labor from being charged to manufacturing overhead?
comparison of daily journal entries with the factory labor summary
A well-functioning system of internal control over the inventory/production functions would provide that finished goods are to be accepted for stock only after presentation of a completed production order and a(n):
inspection report
Match each statement with the associated concept.
define and prioritize information needs
systems planning
Match each statement with the associated concept.
defining what managers need.
information needs analysis
Match each statement with the associated concept.
analyze work assignments.
work distribution
