Question 1

Identify which of the following is not considered a cost to insure quality?

Accepted Answer

Maintenance cost is not considered a cost to insure quality as it refers to the recurring expenses incurred to maintain equipment, facilities, or assets in running condition. In contrast, the other three options - internal failure cost, appraisal cost, and prevention cost - are quality-related costs that are incurred to identify and prevent defects in products or services.

Question 2

Identify the ratio below that does not monitor non-value added time.

Accepted Answer

The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It does not factor in non-value added time such as time spent waiting for materials or equipment, which could negatively impact a company's ability to meet its obligations in the long run. The other ratios listed, such as Inventory Turnover, Accounts Payable Turnover, and Accounts Receivable Turnover, all measure how efficiently a company is using its resources and managing its cash flows, which can include monitoring non-value added time.

Question 3

The balanced scorecard approach has four perspectives,which of the following is not one of those perspectives?

Accepted Answer

The four perspectives of the balanced scorecard approach are Financial Perspective, Learning and Growth Perspective, Internal Business Perspective, and Customer Perspective. The Internal Control Perspective is not a part of the balanced scorecard approach.

Question 4

The cost and effectiveness of research and development is part of which of the following balanced scorecard perspectives?

Accepted Answer

The Learning and Growth Perspective of the Balanced Scorecard focuses on the intangible assets of an organization, particularly human capital, information capital, and organizational capital. Research and development (R&D) activities are crucial for innovation and growth, which are key components of this perspective. It emphasizes the importance of continuous improvement and the development of new products and services, which are directly related to R&D efforts.

Question 5

The bookkeeper who records cash receipts also deposits daily cash receipts at the bank on his way home from work.This is a violation of which of the following characteristics of good internal control:

Accepted Answer

The violation is of the principle of separating incompatible duties. The bookkeeper should not be responsible for both recording and depositing cash receipts, as this increases the risk of fraudulent activity or errors. Ideally, different employees should be responsible for these tasks.

Question 6

All the checks used by Graphics,Inc.to pay its bills are prenumbered.This is an application of which of the following internal controls:

Accepted Answer

Prenumbered checks help maintain an orderly system of records by ensuring that all transactions can be accounted for, which aligns with the internal control principle of maintaining adequate documents and records.

Question 7

Plans showing business activities intended to accomplish objectives during the next year are referred to as:

Accepted Answer

Operating plans are tactical plans that show how the organization will allocate resources to achieve specific objectives during the next year. They are focused on the day-to-day implementation of the strategic plan and are usually created by middle-level managers. Strategic plans are longer-term plans that establish an organization's overall direction and goals, typically covering three to five years. Evaluating plans are plans focused on assessing the effectiveness of strategies and plans. Development plans are plans focused on employee training and development.

Question 8

Which of the following businesses would have the shortest customer response time?

Accepted Answer

Dell Computers is most likely to have the shortest customer response time as it operates in the tech industry where customers expect quick resolutions to their queries and problems. The other businesses listed may have longer response times due to their nature of operations or industries.

Question 9

Which of the following businesses would have the longest customer response time?

Accepted Answer

Apple Grower has the longest customer response time because it takes time for the apples to grow and be harvested.

Question 10

Customer response time is part of which of the following balanced scorecard perspectives?

Accepted Answer

The answer of Customer response time is part of which...

Question 11

Which of the following would be part of the capital resources process?

Accepted Answer

Issuance of stock refers to the process of raising capital by offering ownership shares of a company to investors. This is a key component of the capital resources process.

Answer: B and C
 Preparation of an operating budget and calculating financial ratios are both important steps in managing and allocating capital resources. They help ensure that funds are being used effectively and efficiently.

Answer: D 
 Selling products on credit to customers is not part of the capital resources process. While it may impact a company's cash flow and financial resources, it is primarily a sales or revenue-generating activity.

Question 12

Which is not part of the operating process?

Accepted Answer

The purchase of a bulldozer by a construction company is a capital expenditure, not part of the operating process, which involves day-to-day business activities.

Question 13

A burger shop requires employees to ring up sales and place all cash receipts in the cash register.This is an application of which of the following internal controls:

Accepted Answer

Physically controlling assets and documents refers to the safeguarding of cash, checks, and other assets by ensuring that they are held securely in cash registers or other secure locations. The requirement for all cash receipts to be placed in the cash register is an example of physically controlling assets and documents.

Question 14

The controller of Allitron,Inc.is one of two individuals in the company allowed to sign checks.This is an application of which of the following internal controls:

Accepted Answer

Requiring proper authorization is an internal control measure that ensures only designated individuals, such as the controller in this case, have the authority to sign checks, thereby safeguarding the company's financial resources.

Question 15

Identifying incompatible duties is divided into four phases,which of the following is not one of the four phases?

Accepted Answer

Scrutiny is not one of the four phases typically involved in identifying incompatible duties, which usually include approval, execution, and custody.

Question 16

Which of the following would not be part of the capital resources process?

Accepted Answer

Purchase and sale of inventory are part of the operational resources process, not the capital resources process. The capital resources process involves obtaining funds and acquiring assets such as equipment and property, whereas the operational resources process involves managing day-to-day business activities such as inventory and production. The other options (A, B, and D) all involve obtaining capital resources.

Question 17

Which of the following are the three phases of a business?

Accepted Answer

The three phases of a business typically refer to planning, performing, and evaluating, which encompass the stages of setting goals, executing strategies, and assessing outcomes.

Question 18

Internal failure cost occurs when:

Accepted Answer

Internal failure costs are costs that are incurred when a product or service that does not meet quality standards is detected before the product is shipped to the customer. Repairing a product before it is sold to the customer is an example of internal failure cost as it represents the cost of correcting a mistake in the production process.

Question 19

Which of the following is not part of an internal control system?

Accepted Answer

The answer of Which of the following is not part...

Question 20

Which of the following is part of the operating process?

Accepted Answer

The answer of Which of the following is part of...

Quiz 2: Business Processes and Accounting Information