multiple choice 13. Which of the following statement is correct regarding internal control ? A) A well-designed and operated internal control environment should detect collusion perpetrated by two people B) Internal control in a necessary business function should be designed and operated to detect errors and fraud C) A well-designed internal control environment ensures the achievement of entity's objectives D) An inherent limitation to internal control is the fact that controls can be circumvented by management override

28. Which of the following is an example of an application control for the purchases and payments business process ? a. Defective items should be returned to suppliers promptly b. The purchase order number is .automatically assigned c. Management approval is required for large purchases d. The employee who receives supplier goods must not be the same employee who ordered the goods 16. Which of the following is not a desired application control when developing a purchases and payments business process? a. The person receiving the order must not see the original purchase order quantities b. The person returning items to the supplier must not view the original purchase order c. The person paying the supplier must not be able to modify the purchase order d. The person placing the purchase .order must not receive the items 18. Review of the audit log is an example of which of the following types of application control ? a. Detective b. Governance c. Corrective d. Preventive 25. The Bad Luck Fortune Cookie .25 Company has a 360-day past-due balance of $1,300.00. After repeated attempts at collection, the account is deemed worthless The departments involved with processing this transaction up to the point of issuing an approved write-off memo are the ? a. treasurer, billing, and accounts receivable departments b. credit, treasurer, cash receipts, .and internal audit departments c. credit, treasurer, accounts receivable, and internal audit departments d. credit and accounts receivable 31. the -------------- normally triggers the customer payment recording process ? a. The sales invoice b. remittance advice c. deposit slip d. customer monthly statement

2. part of adequate transaction cycle controls in order processing, after the finished goods department has picked a customer's order according to a delivery document, the records which should be updated to reflect actual quantities picked are found in the a) credit files b) order files c) inventory files d) master price list 4. attempts to minimize or -----------eliminate carrying and stockout costs a) Materials requirements planning b) Just-in-time inventory c) Evaluated receipt settlement d) Economic order quantity 29. To maintain an adequate separation of duties, various functions within the customer order process should be independent of each other An example of this is ? a. None of these answers are correct b. that billing does not have access to the accounts receivable ledger c. that shipping only accepts goods from finished goods that are identified on an independently- prepared packing list d. Both answers are correct 15. The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as a. economic order quantity b. just-in-time production c. optimal inventory d. quantity safety stock 24. Which of the following statements about the requirements of table design is incorrect? a. All other non-key attributes in a table must describe a characteristic of the entity (table) identified by the foreign key b. Each attribute (column) of a record (row) must be single-valued c. Each attribute in a table must .have a unique name d. Values of a specific attribute .must be of the same type 10. Which of the following least reflects the purpose of a business rule in the purchase process ? a. Require segregation of order, receiving, and payment duties b. Ensure suppliers are paid on time c. Ensure suppliers are satisfied d. Ensure an audit trail 11. Which of the following activities is not associated with the sales and collection business process ?.Recording customer payments a. Selling products and services b. Billing customers c. Recording customer payments d. Maintaining vendor records 14. Which of the following represents an inherent risk for a financial institution? a. Customer credit check not performed b. An error occurs in a loan loss calculation c. Bank reconciliations are not performed on a timely basis d. The economy goes into a recession 33. Which of the following is not an application control when placing a purchase order ? a. System provided range and limit checks b. System provided purchase order number c. System provided default values d. System provided type image 34. Which of the following is the best way to compensate for the lack of adequate segregation of duties in a small organization ? a. Providing greater management oversight of incompatible activities b. Requiring accountants to pass a yearly background check c. Disclosing lack of segregation of duties to external auditors during the annual review d. Replacing personnel every three .or four years 3. According to COSO 2013, which of the following components of the enterprise risk management addresses an entity's integrity and ethical values? a. Internal environment b. Information and communication c. Risk assessment d. Control activities 5. The bill of lading ? a. Reflects freight charges on goods shipped b. Is sent to the customer with the purchase invoice c. Signifies release of goods for shipment to customers d. Is used to control inventory 1. Which of the following is not something a model of database structures must be able to describe ? a. The entities or things in the domain of interest b. The sequence that entities are accessed c. The attributes or characteristics of the entities and relationships d. The cardinalities that describe how many instances of one entity can be related to another 36. Acme sells widgets online to other.36 businesses. Acme customers place an online order. Acme processes the customer order by verifying with the accounting department that the customer's credit is in good standing with the company (the customer's account is paid on time) The items are verified for availability The shipment is processed and sent to the customer's warehouse An invoice is generated from the sales information and emailed to the customer The corresponding database tables are updated. What are the processes in the Acme Sales Narrative a. Verify customer's credit Verify item availability Update the database tables b. Receive customer's order verify customer's credit Send shinment c. Process customer order, process shipping generate invoice 23. Consider an association between a Sales entity and an Inventory entity. Which of the following is the best way to implement that association in your database? a. Post the primary key of Sales as a foreign key in Inventory b. None of these choices are correct c. Create a linking table d. Post the primary key of Inventory as a foreign key in Sales 37. A company would like to implement a management information system that integrates all functional areas within an organization to allow information exchange and collaboration among all parties involved in business operations Which of the following systems is most effective for this application a. A Microsoft database b. A decision support system c. A Structured Data system d. An enterprise resource planning system 17. A manufacturing firm identified that it would have difficulty sourcing raw materials locally, so it decided to relocate its production facilities. According to COSO , this decision represents which of the following response to the risk ? a. Risk acceptance b. Prospect theory c. Risk sharing d. Risk reduction 9. Which of the following is the most likely order of a basic purchases activity model ? a. Request prices and availability - Place Purchase Order Receive Items - Send Payment b. Analyze Inventory - Place .Purchase Order - Send Payment c. Create Purchase Order Create Journal Entry - Receive Items Send Payment d. Request prices and availability Receive Items - Record Accounts Payable 7. There are various approaches to an accounts receivable application. The approach in which a customer's remittances are applied against a customer's total outstanding balance is called ? a. open-item processing b. None of these answers is correct c. balance-forward processing d. aging schedule processing 35. Which of the following correctly describes the Referential Integrity Rule? a. The primary key of a table must .have data values (cannot be null) b. Each attribute in a table must have a unique name c. The data value for a foreign key could be null d. Values of a specific attribute .must be of the same type 30. Nancy Smith comes in to Espresso.30 Coffee to provide her new address and you make the appropriate updates. When preparing a sales receipt for her a week later you notice Nancy's old address appears on receipt. What does this indicate about the database ? a. Nancy Smith's order was entered incorrectly b. The same customer was entered into the database multiple times c. The address information was updated for the wrong Nancy Smith d. The database is working correctly 38. Among the following pair of functions, which pair represents the most serious internal control weakness when the duties are performed by the same individual ? a. Purchasing and verification of vendor invoices b. Check signing and cancellation of voucher documentation c. Physical handling of incoming merchandise and preparation of receiving reports d. Cash disbursement and verification of vendor invoices 12. What is the key difference between the.12 MRP and JIT inventory management approaches A) Only JIT reduces costs and improves efficiency a. Only JIT reduces costs and improves efficiency b. MRP schedules production to meet estimated sales needs JIT schedules production to meet c. MRP especially useful for .products such as fashion apparel d. JIT is more effectively used with products that have predictable patterns of demand 22. Consider an association between a Deliveries event and a Shipping Companies entity in a relational database Which of the following is the best way to implement that association in your database? a. Post the primary key of Shipping Companies as a foreign key in Deliveries b. Post the primary key of Deliveries foreign key in Shipping Companies c. None of these choices are correct d. Create a linking table 20. One process, which is transparent to customers and has a beneficial effect on the company's cash flow, is to ? a. factor accounts receivable b. factor accounts receivable and decrease the amount of time in which customers have to pay their monthly invoices c. decrease the amount of time in which customers have to pay their monthly invoices d. implement a cycle billing plan 32. Which of the following statements about foreign keys is not true ? a. Foreign key must match values of the linked primary key b. A foreign key can be a combination of attributes c. A foreign key should never be linked to a primary key in another table d. Foreign keys support a defined association 8. Which of the following is not a criterion for selection of a primary key ? a. The primary key cannot be NULL (blank) b. The primary key should be controlled by the organization assigning it c. Primary keys with sequential values make it easier to spot gaps in the data d. The primary key should always be numeric 27. The primary objective in processing revenues is to ? a. Achieve timely and efficient cash collection b. Sell as many goods as possible c. Maximize an organization's sales orders d. Only sell goods to customers who can pay their bills 21. An enterprise resource planning system has which of the following advantages over multiple independent functional systems ? a. Data can be accessed through Structured Query Language (SQL) b. Increased responsiveness and flexibility while aiding in the decision-making process c. Increased amount of data redundancy since more than one module contains the same information d. Modifications can be made to each module without affecting other modules 19. One of the basic activities in the expenditure cycle is the receiving and storage of goods, supplies, and services. What is the counterpart of this activity in the revenue cycle? a. cash collection activity b. sales order entry process c. cash payments activity d. shipping function 6. Which of the following is not an objective of the purchasing process? a. Inventory control b. Fastest possible processing of payments to vendors c. Maintaining vendor records d. Forecasting cash outflows 26. Which type of data models allows each record to have multiple parent and child records ? a. The network model b. None of these choices is correct c. Relational model d. The hierarchical mode

15. Business rules are an example of which COSO concept? A. Control activities B. Internal control C. Activity models D. Control environment

22. maintain adequate separation of functions, accounts receivable should not have access to ? A. checks received from customers and checks received from customers B. checks received from customers C. invoices and credit memos D. cash received from customers.