Question

EDI system can best add value to which of the following process?

Select one: a. On daily basis sales department needs to send large amount of sales order information to both warehouse and production. Production department generates production plan according to the orders and sends the plan to warehouse, which sends inventory requests to purchasing department. b. Accounting department needs to monitor receiving and shipping activities at period end to ensure the transaction completeness in system. Accounting employees need to sort out thousands of sales recognized by the system from shipments, identify those with FOB Destination term at the end of month, manually posts adjusting entries to reverse these sales and increase in-transit inventory. c. The payment information from customer is a big data file generated from daily scanning at cashier. The file is sent to vendor to indicate which invoices the payment is paying to. Payment is issued on weekly basis to close thousands of invoices at a time. d. After entering vendor invoice into system, Accounts Payable has to compare information on the invoices with receiving report and purchase order before issuing payment. There are usually hundreds of receiving and invoices entered on daily basis.

2. the requirement that purchases be made from suppliers on an approved vendor list is an example of a:

Select one: a. Monitoring control b. Preventive control c. Corrective control d. Detective control

Answer 1

1. (Electronic data interchange) EDI is a process of communicating informations electronically that was communicated through paper. this make communications very fast and easy. here ,in every process we need communication of information and exchande of other data so, EDI is adding value to each of these processes, it facilitate fast communication and easy data exchange

2. here company created a approved vendor list to prevent fraud, purchase dept may select vendors for personal interests. according to this control only management approved vendors can get orders.

so, it is is( b) preventive control

monitoring control is a valuation of management to ensure that every thing is perfectly . corrective control is the management process to correct an error. detective control is designed to detect errors. these three types controls will not prevent errors. these controls are designed for detecting and correcting errors. these will not prevent the error.