Question

33)

Which one of the following is not an element of inventory carrying cost?

(2pts)

Property taxes

Cost of obsolescence and deterioration

Storage costs

Insurance costs

None of the above

34)

Sarbanes-Oxley Act of 2002 may lead to ______.

(2pts)

convergence of GAAP and IFRS

Worldwide acceptance of XBRL

continuous or real-time reporting

obscuring of the economic reality of business events

All of the above

None of the above

35)

Which one of the following is not a segregation of duties applicable to a well-designed OE/S process?

(2pts)

customer sales and service segregated from logistics

warehousing segregated from shipping

order picking segregated from warehousing

customer sales and service segregated from credit approval

All of the above

None of the above

36)

In the OE/S process, the document that represents an independent authorization to ship goods to the customer is the:

(2pts)

bill of lading

sales order

shipping notice

customer acknowledgment

All of the above

None of the above

37)

Other than the OE/S process, the B/AR/CR process directly interfaces with the _____.

(2pts)

general ledger process

AP/CD process

purchasing process

HR process

None of the above

38)

Designing ground-breaking products and getting them to market quickly is an example of:

(2pts)

production process innovation

management accounting systems

product innovation

supply chain management

None of the above

39)

In the validation of a vendor invoice, the invoice is typically matched against all but which of the following items?

(2pts)

purchase order

receiving report

vendor master data

purchase requisition

40)

Which of the following most likely would be “blinded” on a copy of the purchase order sent to the receiving department?

(2pts)

vendor identification

freight terms

quantities

inventory descriptions

All of the above

None of the above

41)

Ghost employees are _____.

(2pts)

actual employees who receive duplicate paychecks

deceased employees who haunt the business

fictitious employees who receive paychecks

actual employees who fail to show up for work

All of the above

None of the above

42)

In systems implementation, a _____ test is conducted to verify the new system against the original specifications.

(2pts)

look-back

operations

acceptance

system

All of the above

None of the above

Answer 1

33) Which one of the following is not an element of inventory carrying cost?

(2pts)

Property taxes

Cost of obsolescence and deterioration

Storage costs

Insurance costs

None of the above

Answer : Property Taxes

Inventory carrying costs includes all those expenses incurred to keep the inventory in useable condition. Costs incurred to procure material, storage costs, etc are the best examples. Costs like warehouse may be included to some extent but property taxes are purely out of the ambit of being included in costs of inventory. Property taxes are in the nature General Administrative costs

34) Sarbanes-Oxley Act of 2002 may lead to ______.

(2pts)

convergence of GAAP and IFRS

Worldwide acceptance of XBRL

continuous or real-time reporting

Obscuring of the economic reality of business events

All of the above

None of the above

Answer : The Sarbanes–Oxley Act of 2002, commonly referred as SOX is applicable in United States of America. It lists requirements for all U.S. public companies and public auditing firms. SOX covers responsibilities of a public corporation’s board, lays down criminal penalties for misconduct, and requires the SEC to create regulations to define how public entities should comply with the law. There is a major focus on Enhanced Financial Disclosures i.e. enhanced reporting requirements for transactions which includes off-balance-sheet transactions.

Hence SOX is more in the nature of providing a guideline to enhance reporting requirement and not favouring any specific measure to achieve it. Hence the best possible answer is none of the above.

35) Which one of the following is not a segregation of duties applicable to a well-designed OE/S process?

(2pts)

customer sales and service segregated from logistics

warehousing segregated from shipping

order picking segregated from warehousing

customer sales and service segregated from credit approval

All of the above

None of the above

Answer: Order Entry/ Sales process (‘OE/S) primarily deals with pre-sales activities, Sales order processing, Picking and packing of goods and shipping the goods. As a process;

1. Customer places the order
2. Sales requests approval from credit department
3. Sales order department acknowledges the customer order
4. Sales order department notifies shipping and warehouse
5. Ware house sends completed ticket

Thus the answer is “All of the above”

36) In the OE/S process, the document that represents an independent authorization to ship goods to the customer is the:

(2pts)

bill of lading

sales order

shipping notice

customer acknowledgment

All of the above

None of the above

Answer:

OE/ S process includes;

1.         Customer places the order

2.         Sales requests approval from credit department

3.         Sales order department acknowledges the customer order

4.         Sales order department notifies shipping and warehouse

5.         Ware house sends completed ticket

In the OE/S process it is the “shipping notice” which represents independent authorization to ship goods to the customers