Accounting Information Systems 10th Edition Test Bank – Ulric J. Gelinas - Patrick Wheeler -Richard B. Dull

Accounting Information Systems 10th Edition Test Bank – Ulric J. Gelinas – Patrick Wheeler -Richard B. Dull

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Title : Accounting Information Systems

Author : Ulric J. Gelinas – Patrick Wheeler -Richard B. Dull

Edition : 10th Edition

Type : Test Bank

Product Description

Accounting Information Systems 10th Edition Test Bank – Ulric J. Gelinas – Patrick Wheeler -Richard B. Dull

Accounting Information Systems 10th Edition Test Bank – Ulric J. Gelinas – Patrick Wheeler -Richard B. Dull

Sample

Chapter 10—The Order Entry/Sales (OE/S) Process

 

TRUE/FALSE

 

  1. The order entry/sales (OE/S) process includes the first four steps in the order-to-cash process: presales activities; sales order processing; picking and packing the goods; and shipping.

 

ANS:  T                    PTS:   1

 

  1. The first step in the order-to-cash process is sales order processing.

 

ANS:  F                    PTS:   1

 

  1. A customer request for goods might take the physical form of a telephone call, an EDI transmission, an entry on a Web site, or a faxed or mailed customer order.

 

ANS:  T                    PTS:   1

 

  1. The OE/S process helps support the decision needs of the accounting department.

 

ANS:  F                    PTS:   1

 

  1. One of the primary functions of the OE/S is to create information flows which support the repetitive work routines of the sales order department, credit department, and shipping department.

 

ANS:  T                    PTS:   1

 

  1. The flow of information from OE/S to marketing managers is an example of horizontal information flows.

 

ANS:  F                    PTS:   1

 

  1. The flow of information from OE/S to the credit department is an example of vertical information flows.

 

ANS:  F                    PTS:   1

 

  1. For companies using enterprise systems, CRM systems often share the same underlying database.

 

ANS:  T                    PTS:   1

 

  1. Data warehousing applications in organizations are usually viewed as being focused on either operational or analytical applications.

 

ANS:  T                    PTS:   1

 

  1. CRM software is designed to manage all the data related to customers, such as marketing, field service, and contact management data.

 

ANS:  T                    PTS:   1

 

  1. Sell-side systems use the Internet to automate and manage corporate vendors and purchases.

 

ANS:  F                    PTS:   1

 

  1. Buy-side systems are designed to allow a company to market, sell, deliver and service goods and services to customers throughout the world via the Internet.

 

ANS:  F                    PTS:   1

 

  1. Sales-force automation software may be used to route calls to a particular sales representative who has previously worked with the customer.

 

ANS:  T                    PTS:   1

 

  1. A customer order triggers the OE/S process.

 

ANS:  T                    PTS:   1

 

  1. Analytical applications, which include data mining, are intended to allow the use of sophisticated statistical and other analytical software to help an organization’s members develop insights about customers, processes, and markets.

 

ANS:  T                    PTS:   1

 

  1. If a check of the customer master data shows that the goods requested on a customer order are not in stock, an exception routine called a back order is initiated.

 

ANS:  F                    PTS:   1

 

  1. A packing slip authorizes the warehouse to remove goods from the warehouse and send them to the shipping department.

 

ANS:  F                    PTS:   1

 

  1. A picking ticket is affixed to the inventory package sent to the customer and identifies the customer and the contents of the package.

 

ANS:  F                    PTS:   1

 

  1. Vendor acknowledgements are sent to vendors to notify them that their orders have been accepted and to inform them of the expected delivery date.

 

ANS:  F                    PTS:   1

 

  1. A bill of lading is the document representing the contract between the shipping company and the common carrier.

 

ANS:  T                    PTS:   1

 

  1. The OE/S process sends the sales order notification to the billing department to notify them of a pending shipment.

 

ANS:  T                    PTS:   1

 

  1. If a customer refuses to accept a back order, then the sales event is terminated and the sales order is accepted.

 

ANS:  F                    PTS:   1

 

  1. A customer acknowledgement is sent to the customer to notify him or her of the order’s acceptance and the expected shipping date.

 

ANS:  T                    PTS:   1

 

  1. A customer acknowledgement is sent to the billing department to notify them of a pending shipment.

 

ANS:  F                    PTS:   1

 

  1. In the E-R diagram for OE/S, SALES_ORDERS activates the STOCK_PICK.

 

ANS:  T                    PTS:   1

 

  1. In the E-R diagram for OE/S, STOCK_PICK triggers the SALES_INVOICES.

 

ANS:  F                    PTS:   1

 

  1. In the E-R diagram for OE/S, SHIPMENTS generate the SALES_INVOICES.

 

ANS:  T                    PTS:   1

 

  1. The marketing data is a repository of a variety of sales-oriented data, some of which result from recording sales events and some of which originate from activities that do not culminate in completed sales, such as presales activities.

 

ANS:  T                    PTS:   1

 

  1. The inventory master data normally contains standing data about each customer, such as name, billing and ship-to addresses, and telephone number.

 

ANS:  F                    PTS:   1

 

  1. The customer master data is a data store that contains data identifying the particular characteristics of each customer.

 

ANS:  T                    PTS:   1

 

  1. The completed picking ticket file provides an audit trail of authorized inventory transfers made between the warehouse and the shipping department.

 

ANS:  T                    PTS:   1

 

  1. Depending on how the OE/S process is designed, the sales order master data may be updated at least twice¾once when a new sales order is created and later to reflect the shipment of that order.

 

ANS:  T                    PTS:   1

 

  1. Optical character recognition (OCR) devices use light reflection to read differences in code patterns in order to identify a labeled item.

 

ANS:  F                    PTS:   1

 

  1. Bar code readers are used to recognize patterns of handwritten or printed characters.

 

ANS:  F                    PTS:   1

 

  1. Output devices that capture printed images or documents and convert them into electronic digital signals that can be stored in computer media are called scanners.

 

ANS:  F                    PTS:   1

 

  1. When a customer service representative enters data into the OE/S system, the first screen prompt is usually for the customer number.

 

ANS:  T                    PTS:   1

 

  1. A tickler file is one that is reviewed on a current and regular basis for the purpose of taking action to clear the items from that file.

 

ANS:  T                    PTS:   1

 

  1. Preformatted screens in the OE/S process are a control plan that involves the detailed comparison of the individual elements appearing on two source documents.

 

ANS:  F                    PTS:   1

 

  1. One-for-one checking in the OE/S process is a control plan that simplifies the data entry process, and may prevent the customer service representative from omitting data, to fill in certain fields, and reject incorrectly formatted fields to reduce input errors.

 

ANS:  F                    PTS:   1

 

  1. Online prompting in the OE/S process is a control plan that advises the customer service representative to check their data entries for accuracy before moving on.

 

ANS:  T                    PTS:   1

 

  1. Confirm input acceptance in the OE/S process is a control plan that tells the customer service representative that the order has been accepted.

 

ANS:  T                    PTS:   1

 

  1. Customer credit check is a control plan that ensures that the organization protects its resources by dealing only with customers who have demonstrated an ability to satisfy their liabilities.

 

ANS:  T                    PTS:   1

 

  1. Customer Relationship Management (CRM) tools can be used by marketing managers to connect with customers, to learn what they like and don’t like, and about new products that they want.

 

ANS:  F                    PTS:   1

 

MULTIPLE CHOICE

 

  1. The OE/S process is part of the ____ process.
a. order-to-cash
b. purchase-to-pay
c. human resources
d. general ledger/financial reporting

 

 

ANS:  A                    PTS:   1

 

  1. The OE/S process handles the processing and shipment of a customer order while another process actually bills the customer. With such a configuration, you would not expect the OE/S system to interface directly with the ____.
a. billing/accounts receivable/cash receipts process
b. inventory process
c. general ledger process
d. human resource process

 

 

ANS:  D                    PTS:   1

 

  1. The OE/S process includes the first four steps in the order-to-sales process. The order of these four steps is:
a. pre-sales activities, sales order processing, picking and packing, shipping
b. pre-sales activities, picking and packing, sales order processing, shipping
c. pre-sales activities, picking and packing, shipping, sales order processing
d. none of the above

 

 

ANS:  A                    PTS:   1

 

  1. The primary function of the OE/S process is to create information flows that support:
a. decision making of sales personnel
b. the key organizational features of the marketing function
c. producing financial statements
d. decision needs of those who manage various sales and marketing functions

 

 

ANS:  D                    PTS:   1

 

  1. In addition to the warehousing function, the three primary departments that you would expect to be part of a typical OE/S process are:
a. sales order, shipping, and credit
b. sales order, shipping, and accounts payable
c. sales order, credit, and accounts payable
d. credit, shipping, and accounts payable

 

 

ANS:  A                    PTS:   1

 

  1. The ultimate goal of the OE/S process is:
a. to ensure accuracy of order entry and sales events
b. to ensure increasing sales volume through the OE/S process
c. to create value for the customer
d. none of the above

 

 

ANS:  C                    PTS:   1

 

  1. When the sales order department acknowledges a customer order, it is an example of a:
a. vertical information flow
b. horizontal information flow
c. both vertical and horizontal information flow
d. neither vertical nor horizontal information flow

 

 

ANS:  B                    PTS:   1

 

  1. When the sales-related data are captured in the sales order department and then the information flows to the managers housed in the marketing department, it is an example of a:
a. vertical information flow
b. horizontal information flow
c. both vertical and horizontal information flow
d. neither vertical nor horizontal information flow

 

 

ANS:  A                    PTS:   1

 

  1. Which of the following is a horizontal information flow?
a. sales order department requests credit approval from credit department
b. sales order department acknowledges the order to the customer
c. warehousing sends completed picking ticket to shipping
d. all of the above are horizontal information flows

 

 

ANS:  D                    PTS:   1

 

  1. With companies facing global competition, firms are recognizing that their most important asset is:
a. inventory
b. employees
c. cash
d. a happy customer

 

 

ANS:  D                    PTS:   1

 

  1. The OE/S process addresses the decision needs of managers of various sales and marketing functions through the use of:
a. vertical information flows
b. horizontal information flows
c. both vertical and horizontal information flows
d. neither vertical nor horizontal information flows

 

 

ANS:  C                    PTS:   1

 

  1. The grouping of customers into categories based on key characteristics is called:
a. itemization
b. Identification
c. segmentation
d. sales-force automation

 

 

ANS:  C                    PTS:   1

 

  1. ____ applications in organizations are usually viewed as being focused on either operational or analytical applications.
a. Data mining
b. Data warehousing
c. Data entry
d. Market segmentation

 

 

ANS:  B                    PTS:   1

 

  1. Analytical applications, which include ____, are intended to allow the use of sophisticated statistical and other analytical software to help an organization’s members develop insights about customers, processes, and markets.
a. data mining
b. data entry
c. e-commerce modules
d. market segmentation models

 

 

ANS:  A                    PTS:   1

 

  1. ____ systems use the Internet to automate and manage purchases and the vendors from which these purchases are made with the predominate technology being electronic data interchange (EDI).
a. Customer relationship management
b. Buy-side
c. Sell-side
d. E-business

 

 

ANS:  B                    PTS:   1

 

  1. ____ applications can handle both B2B and B2C business transactions.
a. Customer relationship management
b. Buy-side
c. Sell-side
d. E-business

 

 

ANS:  C                    PTS:   1

 

  1. The concept behind ____ is to cultivate customer relationships by prospecting, acquiring, servicing, and retaining customers.
a. customer relationship management (CRM) systems
b. customer self-service (CSS) software
c. sales-force automation (SFA) software
d. sell-side systems

 

 

ANS:  A                    PTS:   1

 

  1. A data flow or event that causes a process to begin is called a:
a. Tickler
b. Trigger
c. Document
d. validity check

 

 

ANS:  B                    PTS:   1

 

  1. A specific type of reject stub is called a(n):
a. exception routine
b. summary report
c. corrective routine
d. normal routine

 

 

ANS:  A                    PTS:   1

 

  1. An example of an “exception routine” is a(n):
a. back order process
b. inventory subroutine
c. customer acknowledgement process
d. sales order processing process

 

 

ANS:  A                    PTS:   1

 

  1. Assuming that we separate the shipping and billing processes, which of the following data stores would you expect to be updated by an OE/S process called execute shipping notice?
a. accounts receivable master data
b. sales order master data
c. inventory master data
d. both B and C

 

 

ANS:  D                    PTS:   1

 

  1. In a logical DFD for the OE/S process, which of the following data stores is least likely to interact with the process validate sales order?
a. general ledger master data
b. accounts receivable master data
c. marketing data
d. inventory master data

 

 

ANS:  A                    PTS:   1

 

  1. In a typical OE/S process, validating a sales order likely would involve all of the following processes except:
a. checking the customer’s credit
b. verifying inventory availability
c. completing the sales order
d. completing the picking ticket

 

 

ANS:  D                    PTS:   1

 

  1. A valid shipping notice input is one that is supported by both:
a. an approved sales order and a completed picking ticket
b. an approved sales order and an actual shipment of goods
c. an approved sales order and a customer acknowledgement
d. an approved sales order and customer credit verification

 

 

ANS:  B                    PTS:   1

 

  1. Assuming that we separate the shipping and billing processes, which of the following data stores provides data to the typical OE/S process but is not updated by the process?
a. general ledger master data
b. sales order master data
c. inventory master data
d. customer master data

 

 

ANS:  D                    PTS:   1

 

  1. For a typical OE/S process to check a customer’s credit, all of the following data stores likely would be consulted except the:
a. general ledger master data
b. customer master data
c. accounts receivable master data
d. sales order master data

 

 

ANS:  A                    PTS:   1

 

  1. A document that is used when filling a sales order to authorize the movement of goods from a warehouse to shipping is called a:
a. shipping order
b. packing slip
c. picking ticket
d. blind authorization

 

 

ANS:  C                    PTS:   1

 

  1. To satisfy customers the focus of new OE/S systems is generally on:
a. mass marketing
b. segmented marketing strategies
c. individual customers
d. all of the above.

 

 

ANS:  C                    PTS:   1

 

  1. At the time that the shipping notice is prepared and disseminated, two data stores within the OE/S process are normally updated. Those two data stores are the:
a. customer master data and accounts receivable master data
b. accounts receivable master data and sales order master data
c. accounts receivable master data and marketing data
d. sales order master data and inventory master data

 

 

ANS:  D                    PTS:   1

 

  1. Which of the following documents represents a contract between two parties?
a. shipping’s inventory notification
b. packing slip
c. customer acknowledgement
d. bill of lading

 

 

ANS:  D                    PTS:   1

 

  1. Which of the following data stores is designed primarily to serve the vertical information needs of the organization rather than the horizontal information flows?
a. inventory master data
b. marketing data
c. sales order master data
d. customer master data

 

 

ANS:  B                    PTS:   1

 

  1. Which of the following data is least likely to be stored in the customer master data?
a. customer number
b. billing address
c. ship-to address
d. open invoices

 

 

ANS:  D                    PTS:   1

 

  1. In an entity-relationship (E-R) diagram for the OE/S process, you would expect that the word trigger would appear in the diamond showing the relationship between which of the following pairs of entities?
a. CUSTOMER and SALES ORDER
b. CUSTOMER and SHIPMENT
c. STOCK PICK and SHIPMENT
d. SALES INVOICE and SHIPMENT

 

 

ANS:  C                    PTS:   1

 

  1. Bar code readers:
a. are devices that use light reflection to read differences in bar code patterns to identify a labeled item.
b. are devices used for pattern recognition of handwritten or printed characters.
c. are input devices that capture printed images or documents and convert them into electronic digital signals that can be stored on computer media.
d. are computer-based systems for capture, storage, retrieval, and presentation of images of objects such as pictures and documents.

 

 

ANS:  A                    PTS:   1

 

  1. Which of the following goals is not an example of an operations process goal of the typical OE/S process?
a. to provide timely responses to customer inquiries
b. to provide timely acknowledgements of customer orders
c. to provide timely updates to general ledger accounts
d. to provide timely shipments of goods to customers

 

 

ANS:  C                    PTS:   1

 

  1. In constructing a control matrix for an OE/S process, the principal data input(s) to the information system likely would be:
a. customer inquiries and customer order inputs
b. customer inquiries and shipping notice inputs
c. customer order and shipping notice inputs
d. customer order only

 

 

ANS:  C                    PTS:   1

 

  1. The file most important for ensuring validity of customer order inputs is the:
a. customer master data
b. accounts receivable master data
c. marketing data
d. completed picking ticket data

 

 

ANS:  A                    PTS:   1

 

  1. The control plan preformatted screens is directed primarily toward achieving the information process control goal of ensuring:
a. sales order input validity
b. sales order input accuracy
c. sales order input completeness
d. sales order update completeness

 

 

ANS:  B                    PTS:   1

 

  1. The control plan confirm input acceptance helps to achieve the sales order input control goal of:
a. sales order input validity
b. sales order input accuracy
c. sales order input completeness
d. shipping notice input accuracy

 

 

ANS:  C                    PTS:   1

 

  1. In the OE/S process, the document that represents an independent authorization to ship goods to the customer is the:
a. bill of lading
b. sales order
c. customer acknowledgement
d. shipping notice

 

 

ANS:  B                    PTS:   1

 

  1. In the control matrix of the OE/S process, regarding shipping notice inputs, which of the following control goals is ensured by comparing the shipping notice input to the sales order master data?
a. input completeness and input accuracy
b. input completeness and input validity
c. input validity and input accuracy
d. none of the above

 

 

ANS:  C                    PTS:   1

 

  1. Digital image processing systems are capable of performing all of the following except:
a. capture of data
b. storage of data
c. retrieval of data
d. creation of data

 

 

ANS:  D                    PTS:   1

 

  1. The system that enables users of an ERP system to view source documents from any location is:
a. electronic data interchange
b. local area network
c. digital image processing
d. electronic commerce

 

 

ANS:  C                    PTS:   1

 

COMPLETION

 

  1. The order entry/sales (OE/S) process includes the first four steps in the ______________________________ process.

 

ANS:  order-to-cash

 

PTS:   1

 

  1. The first step in the OE/S process is typically a data flow from a(n) ______________________________.

 

ANS:  customer

 

PTS:   1

 

  1. ______________________________ expect convenient and timely access to information about their order from order initiation, through product delivery, and until after the bill had been paid.

 

ANS:  Customers

 

PTS:   1

 

  1. The OE/S process helps support the decision needs of the ______________________________ and ______________________________ functions.

 

ANS:

sales, marketing

marketing, sales

 

PTS:   1

 

  1. One of the primary functions of the ______________________________ is to create information flows which support the repetitive work routines of the sales order, shipping, and credit departments.

 

ANS:

order entry/sales (OE/S) process

order entry/sales process

OE/s process

 

PTS:   1

 

  1. The flow of information from the OE/S process to marketing managers is an example of ______________________________ information flows.

 

ANS:  vertical

 

PTS:   1

 

  1. The flow of information from OE/S to the credit department is an example of ______________________________ information flows.

 

ANS:  horizontal

 

PTS:   1

 

  1. For companies using enterprise systems, customer relationship management (CRM) systems often share the same underlying ______________________________.

 

ANS:  database

 

PTS:   1

 

  1. The concept behind ______________________________ is to cultivate customer relationships by prospecting, acquiring, servicing, and retaining customers.

 

ANS:

customer relationship management (CRM)

customer relationship management

CRM

 

PTS:   1

 

  1. ______________________________ systems use the Internet to automate and manage purchases and the vendors from which these purchases are made.

 

ANS:  Buy-side

 

PTS:   1

 

  1. ______________________________ systems are designed to allow a company to market, sell, deliver, and service goods and services to customers throughout the world via the Internet.

 

ANS:  Sell-side

 

PTS:   1

 

  1. The buzzword in CRM which means the grouping of customers into categories based on key characteristics is ______________________________.

 

ANS:  segmentation

 

PTS:   1

 

  1. In the OE/S process, the one input that creates the six outputs of general ledger inventory sales update, sales order notification, bill of lading, completed packing slip, shipping’s billing notification, and customer acknowledgement is the ______________________________.

 

ANS:  customer order

 

PTS:   1

 

  1. When a source document provides authority for a business activity to occur, the source document is said to ______________________________ the activity.

 

ANS:  trigger

 

PTS:   1

 

  1. If a check of the inventory master data shows that the goods requested on a customer order are not in stock, an exception routine called a(n) ______________________________ process is initiated.

 

ANS:  back order

 

PTS:   1

 

  1. A(n) ______________________________ authorizes the warehouse to remove goods from the warehouse and send them to the shipping department.

 

ANS:  picking ticket

 

PTS:   1

 

  1. A(n) ______________________________ is affixed to the inventory package sent to the customer and identifies the customer and the contents of the package.

 

ANS:  packing slip

 

PTS:   1

 

  1. ______________________________ are sent to customers to notify them that their orders have been accepted and to inform them of the expected shipping date.

 

ANS:  Customer acknowledgements

 

PTS:   1

 

  1. A(n) ______________________________ is the document representing the contract between the shipping company and the carrier.

 

ANS:  bill of lading

 

PTS:   1

 

  1. The OE/S process sends the ______________________________ notification to the billing/accounts receivable/cash receipts process to notify that process of a pending shipment.

 

ANS:  sales order

 

PTS:   1

 

  1. When a transaction is terminated because of an error or other exception condition, such as when a customer refuses to accept a back order in the OE/S process, the transaction termination is shown on a DFD by a(n) ______________________________ data flow.

 

ANS:  reject

 

PTS:   1

 

  1. In the ER diagram for OE/S, SALES_ORDERS activates ______________________________.

 

ANS:  STOCK_PICK

 

PTS:   1

 

  1. In the ER diagram for OE/S, STOCK_PICK triggers ______________________________.

 

ANS:  SHIPMENTS

 

PTS:   1

 

  1. In the ER diagram for OE/S, SHIPMENTS generates ______________________________.

 

ANS:  SALES_INVOICES

 

PTS:   1

 

  1. The ______________________________ data is the repository of a variety of sales-oriented data, some of which result from recording sales events and some of which originate from activities that do not culminate in completed sales, such as presales activities.

 

ANS:  marketing

 

PTS:   1

 

  1. The ______________________________ master data normally contains standing data about each customer, such as name, address, and telephone number.

 

ANS:  customer

 

PTS:   1

 

  1. The ______________________________ master data is updated to reflect the fact that the goods have been picked, packed, and shipped.

 

ANS:  sales order

 

PTS:   1

 

  1. ______________________________ are devices that use light reflection to read differences in code patterns in order to identify a labeled item.

 

ANS:  Bar code readers

 

PTS:   1

 

  1. ______________________________ is used to recognize patterns of handwritten or printed characters.

 

ANS:

Optical character recognition

Optical character recognition (OCR)

OCR

 

PTS:   1

 

  1. Input devices that capture printed images or documents and convert them into electronic digital signals that can be stored in computer media are called ______________________________.

 

ANS:  scanners

 

PTS:   1

 

  1. A(n) ______________________________ file is one that is reviewed on a current and regular basis for the purpose of taking action to clear the items from that file.

 

ANS:  tickler

 

PTS:   1

 

  1. One-for-one checking of ______________________________with the goods ensures that the correct goods are picked from the shelf and that any errors are detected and corrected in a timely manner (e.g., before the goods get to the shipping department).

 

ANS:  picking tickets

 

PTS:   1

 

  1. ______________________________ may reduce input errors by populating certain fields and rejecting incorrectly formatted fields, thereby preventing the customer service representative from omitting data or entering data with errors.

 

ANS:  Preformatted screens

 

PTS:   1

 

  1. ______________________________ advises customer service representatives to check data entries for accuracy before moving on.

 

ANS:  Online prompting

 

PTS:   1

 

  1. ______________________________ ensures that the organization protects its resources by dealing only with customers who have demonstrated an ability to satisfy their liabilities.

 

ANS:  Customer credit check

 

PTS:   1

 

  1. ______________________________ master data contains a record of each item that is stocked in the warehouse or regularly ordered from a vendor.

 

ANS:  Inventory

 

PTS:   1

 

  1. ______________________________ is a control plan that establishes, for shipping personnel, that someone other than warehouse personnel authorized a shipment.

 

ANS:  Independent shipping authorization

 

PTS:   1

 

  1. ______________________________ segregates duties between the personnel who create the customer record and the personnel who create the sales order.

 

ANS:  Independent customer master data maintenance

 

PTS:   1

 

  1. ______________________________ tools can be used by marketing managers to connect with customers, to learn what they like and don’t like, and about new products that they want.

 

ANS:  Web 2.0

 

PTS:   1

 

  1. ______________________________ systems are computer-based systems for the capture, storage, retrieval, and presentation of images of objects such as pictures and documents.

 

ANS:  Digital image processing

 

PTS:   1

 

PROBLEM

 

  1. TB Figure 10.1 below shows the horizontal perspective of an OE/S process. Functional titles and information flows, depicted as documents, generated or captured by the OE/S process have been omitted from the figured and listed underneath it.

 

 

Functional titles (for OE/S structures and

entities with which the process interacts)

Information Flows

(depicted as documents)

A. Credit department L. Customer order
B. Sales order department M. Credit request
C. Shipping department N. Credit approval
D. VP finance O. Acknowledgement (to customer)
E. VP logistics P. Picking ticket (to warehouse)
F. B/AR/CR process Q. Completed picking ticket (to shipping)
G. Carrier R. Sales order (to B/AR/CR)
H. Customer S. Shipping notice (to B/AR/CR)
I. General ledger T. Shipping notice (to sales order dept.)
J. Warehouse U. Shipping notice (to carrier)
K. VP marketing V. Shipping notice (to general ledger)
W. Sales order (to shipping)

 

Required:

Number your paper from 1 to 23 Match the letter from the list to the appropriate number in TB Figure 10.1.

 

ANS:

1. H 9. M 17. W
2. L 10. N 18. S
3. O 11. R 19. V
4. G 12. D 20. E
5. K 13. A 21. J
6. B 14. F 22. Q
7. T 15. I 23. C
8. U 16. P

 

 

PTS:   1

 

  1. Below is a narrative of the “Validate sales order” portion (i.e., bubble 1.0) of the order entry/sales process.

 

Narrative Description

 

How does the OE/S process then validate a customer order? First, process 1.1 verifies the availability of the requested inventory by consulting the inventory master data. If a sufficient level of inventory is on hand to satisfy the request, the order is forwarded for further processing, as depicted by the data flow “Inventory available order.” Conversely, if a customer orders goods that are not in stock, process 1.1 runs a special back order routine. This routine determines the inventory requirement necessary to satisfy the order and then sends the back order request to the purchasing department. This activity is depicted by the “Back order” data flow, which in reality is a specific type of exception routine (i.e., a specific type of reject stub). If the customer refuses to accept a back order, then the sales event is terminated and the order is rejected, as shown by the “Reject” data flow. Information from the order (e.g., sales region, customer demographics, and order characteristics that reflect buying habits) that has potential value to marketing is recorded in the marketing data store.

 

After assuring inventory availability, process 1.2 establishes the customer’s existence and then evaluates credit. The credit check adds the amount of the order to accounts receivable balances and open sales orders (i.e., orders about to be receivables), and compare that total to the credit limit. If the customer has exceeded their credit limit, the order is rejected.

 

Upon a successful credit approval, process 1.3 performs the following activities simultaneously:

· Updates the inventory master data to allocate the quantity ordered to the sales order. The inventory balance could actually be reduced at this time to save a later update of the inventory master data.
· Updates the sales order master data to indicate that a completed sales order has been created.
· Disseminates the sales order.

 

Required:

From the DFD in TB Figure 10.2 and the narrative description above, explode bubble 1.0 into a lower-level diagram showing the details of that process.

 

 

ANS:

 

PTS:   1

 

  1. Below is a narrative of the “Validate sales order” portion (i.e., bubble 1.0) of the order entry/sales process.

 

Narrative Description

 

How does the OE/S process then validate a customer order? First, process 1.1 verifies the availability of the requested inventory by consulting the inventory master data. If a sufficient level of inventory is on hand to satisfy the request, the order is forwarded for further processing, as depicted by the data flow “Inventory available order.” Conversely, if a customer orders goods that are not in stock, process 1.1 runs a special back order routine. This routine determines the inventory requirement necessary to satisfy the order and then sends the back order request to the purchasing department. This activity is depicted by the “Back order” data flow, which in reality is a specific type of exception routine (i.e., a specific type of reject stub). If the customer refuses to accept a back order, then the sales event is terminated and the order is rejected, as shown by the “Reject” data flow. Information from the order (e.g., sales region, customer demographics, and order characteristics that reflect buying habits) that has potential value to marketing is recorded in the marketing data store.

 

After assuring inventory availability, process 1.2 establishes the customer’s existence and then evaluates credit. The credit check adds the amount of the order to accounts receivable balances and open sales orders (i.e., orders about to be receivables), and compare that total to the credit limit. If the customer has exceeded their credit limit, the order is rejected.

 

Upon a successful credit approval, process 1.3 performs the following activities simultaneously:

· Updates the inventory master data to allocate the quantity ordered to the sales order. The inventory balance could actually be reduced at this time to save a later update of the inventory master data.
· Updates the sales order master data to indicate that a completed sales order has been created.
· Disseminates the sales order.

 

Required:

From the DFD in TB Figure 10.4 and the narrative description above, explode bubble 1.0 into a lower-level diagram showing the details of that process by identifying the words that belong in items 1 to 18 (TB Figure 10.5).

 

 

 

ANS:

NOTE TO INSTRUCTORS: This question is similar to Problem 2 (in the original banks) except that it asks students to identify the missing pieces instead of drawing Diagram 1.

 

1. Customer order 10. Accepted order
2. 1.1 Verify inventory availability 11. Picking ticket
3. Customer master data 12. 1.2 Check credit
4. Sales order master data 13. Inventory master data
5. 1.3 Complete sales order 14. Backorder
6. Customer acknowledgement 15. Reject
7. Sales order notification 16. Inventory master data
8. Marketing data 17. Accounts receivable master data
9. Inventory available order 18. Reject

 

 

PTS:   1

 

  1. Below is the narrative of the “Execute shipping notice” portion (i.e., bubble 3.0) of the order entry/sales process.

 

Narrative Description

 

This narrative describes activities that normally take place in a shipping department. Process 3.1 receives two data flows, namely the completed picking ticket and data retrieved from the sales order master data. The shipping clerk matches the quantity of the goods, the quantity on the picking ticket, and the quantity stored in the sales order master data. If the details agree, the matched sales order is forwarded to process 3.2. If the details of the data flows do not agree, process 3.1 rejects the order and initiates procedures for resolving any discrepancies.

 

When process 3.2 receives a matched sales order from process 3.1, it produces and disseminates notices of the shipment and updates the sales order and inventory master data. The sales order master data is updated to reflect the fact that the goods have been picked, packed, and shipped. The inventory master data is updated to change the quantity allocated for the sales order to an actual shipment, thus reducing the quantity of inventory on hand. We generally expect the dissemination of notices will include the following data flows:

· Shipping notifies billing to begin the invoicing process.
· A bill of lading is attached to the outside of the goods being shipped and is given to the carrier.
· A packing slip is inserted into the goods being shipped and is given to the carrier.
· The flow “General ledger inventory sales update” notifies the general ledger process that inventory has been sold and the cost of goods sold has increased.

 

Required:

From the DFD in TB Figure 10.6 and the narrative description above, explode bubble 3.0 into a lower-level diagram showing the details of that process.

 

 

ANS:

 

PTS:   1

 

  1. The entity-relationship (E-R) diagram below represents an order entry/sales process, but with the names of certain entities, characteristics of relationships, and relationship cardinalities removed from the diagram. The names omitted are:
Entities Characteristics of the Relationships
· CUSTOMERS · activate
· INVENTORY · billed_to
· SHIPMENTS · generate
· SALES_RELATIONS
· trigger

 

Required:

Complete TB Figure 10.8 by:

a. Inserting the names from the above lists into the rectangles (entities) or diamonds (characteristics of the relationships), respectively, where they belong
b. Inserting a 1 or an N where necessary next to the connecting lines to indicate the cardinality of the relationships

 

 

ANS:

 

PTS:   1

 

  1. The following systems flowchart depicts a portion of the OE/S Process:

 

 

Required:

Based on the flowchart (TB Figure 10.10):

a. Complete the flowchart by matching the 8 blank items, which are indicated by the letters A through H with the 8 items listed below:
1. Bill of Lading
2. Compare order number and quantities
3. Completed picking ticket (with bar codes)
4. Display sales order
5. Enterprise database
6. Accept shipment
7. Packing Slip
8. Scan bar codes on picking ticket
b. Name the present and missing control plans identified with the letters P and M in the flowchart.

 

 

ANS:

a. Missing

Item

Item

Description

A 5
B 4
C 3
D 8
E 2
F 6
G 1 or 7
H 1 or 7
b. The control plans from above are:
     P-2 Customer credit check
     P-3 Populate input screens with master data
     P-4 Programmed edit checks
     P-9 Confirm input acceptance
     P-11 Enter shipment data in shipping
     P-12 Turnaround document
     P-13 Automated data entry
     P-14 Independent shipping authorization
     P-15 One-for-one checking of goods, picking ticket, sales order
     M-1 Independent customer master data maintenance
     M-2 Review open sales orders (tickler file)

 

 

PTS:   1

 

  1. The following is a list of 10 control plans.

 

Control Plans
A. Enter data close to where customer order is received
B. Online prompting
C. Independent shipping authorization
D. Procedures for rejected inputs
E. Preformatted screens
F. Customer credit check
G. One-for-one checking of goods, picking ticket, sales order
H. Populate inputs with master data
I. Review open sales orders (tickler file)
J. Turnaround document (picking ticket with bar codes)

 

Required:

Listed below are ten system failures that have control implications. On the answer line to the left of each system failure, insert the capital letter from the list above of the best control plan to prevent the system failure from occurring. A letter should be used only once.

 

Answers SYSTEM FAILURES
           1. The sales personnel can approve all customer orders.
           2. Any correcting entries to be made by the customer service representative are done at a later time rather than as the data is input into the system. Some customer orders are never corrected and re-entered.
           3. The finished goods warehouse delivers goods to the shipping department, accompanied by the picking ticket. After checking the goods against the picking ticket, the shipping employee signs the picking ticket and gives it to the warehouse employee. Then the shipping department prepares a three-part shipping notice, one copy of which serves as the packing slip. A recent audit discovered that a dishonest warehouse employee had been forging picking ticket documents, thereby having goods shipped to an accomplice.
           4. Customer service representatives record customer orders on prenumbered order forms, and then forward the forms to the corporate office in Orlando for processing. J.B. Wrigley, one of Mandates top salesmen, had a very good week; he mailed 55 customer orders to the corporate office on Friday afternoon. Unfortunately, they were misplaced in the mail and did not reach Orlando until three weeks later. Needless to say, those 55 customers were more than a little displeased at the amount of time that Mandate took to fill their orders.
           5. Customer service representative can manually key in order data at one of many PCs. In the first two weeks of operation, every sales order produced by the computer was missing a “ship-to” address.
           6. The customer service representative can enter a customer code with no matching customer master data and no authorized customer. Therefore, it is possible to make invalid entries into the system.
           7. Proper comparisons are not made to ensure that the shipping notice inputs are represented by an actual shipment of goods.
           8. The OE/S system does not advise the customer service representative to check the data entries before moving on to the next order.
           9. Customers have complained that their invoices are not correct. The amount of goods received does not correspond to the number of items on the invoices. After some investigation it was determined that shipping clerks have made errors in recording the amount shipped.
           10. Several shipments have not been made in a timely manner.

 

 

ANS:

1. F 6. H
2. D 7. G
3. C 8. B
4. A 9. J
5. E 10. I

 

 

PTS:   1

 

  1. TB Figure 10.11 is the annotated systems flowchart for the order entry/sales process. TB Figure 10.12 is the related control matrix. Following the control matrix is a description of the first control plan, P-1.

 

Required:

Using the format shown for control plan P-1, write descriptions for control plans P-2, P-10, P-14, P-15, and M-1.

 

 

Control Goals of the OE/S Business Process
Control Goals of the Operations Process Control Goals of the Information Process
Recommended

control plans

Ensure effectiveness

of operations:

Ensure

efficient

employment

of resources

(people,

computers)

Ensure

security of

resources

(inventory,

customer

master data)

For sales order

inputs (i.e.,

customer orders),

ensure:

For sales

order and

inventory

master

data,

ensure:

For shipping notice

inputs (i.e., shipment

data), ensure:

For sales

order and

inventory

master

data,

ensure:

A B C IV IC IA UC UA IV IC IA UC UA
Present Controls
P-1: Enter customer

order close to

where the order

is received

P-1 P-1 P-1 P-1 P-1
P-2: Customer credit

check

P-2 P-2 P-2
P-3: Populate input

screens with

master data

P-3 P-3 P-3 P-3 P-3 P-3
P-4: Programmed

edit checks

P-4 P-4 P-4 P-4
P-5: Compare input

data with

master data

P-5 P-5 P-5 P-5 P-5
P-6: Preformatted

screens

P-6 P-6 P-6 P-6
P-7: Online

prompting

P-7 P-7 P-7 P-7
P-8: Procedures for

rejected inputs

P-8 P-8 P-8 P-8 P-8 P-8
P-9: Confirm input

acceptance

P-9 P-9
P-10: One-for-one

checking of

picking ticket

with the goods

P-10 P-10 P-10 P-10 P-10
TB Figure 10.12 (part 1)

 

Control Goals of the OE/S Business Process
Control Goals of the Operations Process Control Goals of the Information Process
Recommended

control plans

Ensure effectiveness

of operations:

Ensure

efficient

employment

of resources

(people,

computers)

Ensure

security of

resources

(inventory,

customer

master data)

For sales order

inputs (i.e.,

customer orders),

ensure:

For sales

order and

inventory

master

data,

ensure:

For shipping notice

inputs (i.e., shipment

data), ensure:

For sales

order and

inventory

master

data, ensure:

A B C IV IC IA UC UA IV IC IA UC UA
Present Controls
P-11: Enter

shipment data

in shipping

P-11 P-11 P-11 P-11
P-12: Turnaround

document

P-12 P-12 P-12 P-12
P-3: Automated data

entry

P-13 P-13 P-13
P-14: Independent

shipping

authorization

P-14 P-14
P-15: One-for-one

checking of

goods,

picking

ticket, sales

order

P-15 P-15 P-15
Missing Controls
M-1: Independent

customer

master data

maintenance

M-1 M-1 M-1
M-2: Review open

sales orders

(tickler file)

M-2 M-2
Possible effectiveness goals include the following:

A¾Provide timely acknowledgement of customer orders.

B¾Provide assurance of customer’s creditworthiness.

C¾Provide timely shipment of goods to customers.

 

IV = input validity

IC = input completeness

IA = input accuracy

UC = update completeness

UA = update accuracy

TB Figure 10.11 (part 2)  

 

 

P-1: Enter customer order close to where the order is received.
· Effectiveness goals A and C, efficient employment of resources: Use of this strategy places CSRs in a position to process customer orders immediately, and being familiar with the orders allows the CSRs to input the orders more quickly, which leads to timely acknowledgements and shipments and more orders processed by each representative (efficiency).
· Sales order input completeness: By having the CSRs enter the sales data rather than forwarding to a data entry function, the risk of orders getting lost should be reduced.
· Sales order input accuracy: Because CSRs are familiar with the type of data being entered and can correct any input errors “on the spot,” input accuracy should be improved.

 

 

ANS:

P-2: Customer credit check.
· Effectiveness goal B: The credit check is performed by ascertaining that the amount of the customer order (plus the amount of any open orders and the amount of any outstanding receivables balance) falls within the credit limit established by the credit department. If the request falls outside the limit, then the control terminates the sale.
· Security of resources: Termination of orders exceeding credit limits ensures that the organization protects its resources by dealing only with customers who have demonstrated an ability to satisfy their liabilities.
· Sales order input validity: Valid sales orders include those that fall within authorized credit limits (i.e., there is a reasonable expectation of payment).
P-10: One-for-one checking of picking tickets with the goods.
· Effectiveness goal C, efficient employment of resources: By comparing the goods to the picking ticket (and correcting any picking errors) in the warehouse, rather than later in shipping, we can process shipments in a more timely manner and more efficiently (the warehouse clerk is in a better position to correct picking errors than is the shipping clerk).
· Security of resources: By correcting picking errors, we ensure that only goods that were ordered leave the warehouse.
· Shipping notice input validity, shipping notice input accuracy: The shipping clerk sends only the quantity of goods that were on the picking ticket, thus ensuring that the goods entered are shipments that will be valid and accurate.
P-14: Independent shipping authorization.
· Security of resources: The system provides the shipping department with an independent authorization (i.e., an open sales order in the enterprise database that was created by the CSR) to ship inventory to a customer. In addition, the plan calls for the system to provide an independent authorization (i.e., a picking ticket) to the warehouse to pick goods and send them to the shipping department.
· Shipping notice input validity: The shipping department will not record a shipment unless it has received independent authorization to do so. This independent authorization comes in the form of picking tickets and the open sales order executed by independent functions, the warehouse and the CSR.
P-15: One-for-one checking of goods, picking ticket, sales order.
· Security of resources, shipping notice input validity: By comparing data on the sales order master data with the data on the picking ticket and then comparing these data sets to the actual goods being shipped, this plan ascertains that inventory shipments have been authorized and represent an actual shipment of goods.
· Shipping notice input accuracy: By comparing such items as item numbers, quantities, and customer identification, we can ensure that the input of shipping data is accurate.
M-1: Independent customer master data maintenance.
Note: We are assuming that this control is missing, even though we are told that there is a credit check and that credit rejection procedures are initiated.
· Effectiveness goal B: Only personnel in the credit department, a function that is separate from the sales department, should add new customers to the customer master data.
· Security of resources: By precluding sales being made to customers who may not be creditworthy, the organization helps to ensure the security of its resources.
· Sales order input validity: Valid sales orders include those that are made to customers for whom management has provided prior authorization. This is accomplished here by having the records entered by the credit department.

 

 

PTS:   1

Accounting Information Systems 10th Edition Test Bank – Ulric J. Gelinas – Patrick Wheeler -Richard B. Dull

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