Question 1

Inaccurate recording and processing of production activities can diminish the overall effectiveness of production operations.One of the application controls that can help to ensure accounting records are accurate is to restrict the rights of authorized users only to the portion of the database needed to complete job duties.What specific control can help achieve this objective?
A)an access control matrix
B)passwords and user IDs
C)closed-loop verification
D)bar-code scanners

Accepted Answer

An access control matrix is a security model that restricts access to a database or system by only allowing authorized users access to specific portions of the database. This helps to ensure that accounting records are accurate by minimizing the risk of unauthorized modifications or errors in recording production activities. Passwords and user IDs are also important for security, but they do not specifically address the issue of restricting access to specific portions of the database. Closed-loop verification and bar-code scanners are more related to inventory control and accuracy of physical transactions, rather than accounting records.

Question 2

The general threat of the loss of production data can greatly slow or halt production activity within an organization.To counteract such a major threat,which of the following organization controls should be implemented and maintained?
A)store key master inventory and production order files on-site only to prevent their theft
B)back up data files only after a production run has been physically completed
C)access controls should apply to all terminals within the organization
D)allow access to inventory records from any terminal within the organization to provide efficient data entry

Accepted Answer

Access controls should apply to all terminals within the organization to ensure that only authorized personnel have access to the production data. This will reduce the risk of data loss due to unauthorized access or tampering. Storing key master inventory and production order files on-site only may not be effective if there is a theft or disaster at the site. Backing up data files only after a production run has been physically completed may also result in significant data loss if there is an issue during the production process. Allowing access to inventory records from any terminal within the organization may increase the risk of unauthorized access or data entry errors.

Question 3

The use of various forms of information technology in the production process is referred to as
A)computerized investments and machines.
B)computerized integration of machines.
C)computer-integrated manufacturing.
D)computer intense manufacturing.

Accepted Answer

Computer-integrated manufacturing (CIM) refers to the use of computers and information technology to control the entire production process, from design and planning to manufacturing and delivery. This includes integrating various machines, systems, and processes, as well as automating tasks and decision-making.

Question 4

Job-time tickets are used to
A)specify each production task.
B)collect the time spent by a worker on a specific task.
C)allocate machine costs.
D)All of the above are correct.

Accepted Answer

Job-time tickets are used to collect the time spent by a worker on a specific task, helping in tracking labor costs for job costing purposes.

Question 5

For replacement of inventories and assets destroyed by fire or other disasters,an organization needs
A)stand-by facilities.
B)adequate insurance coverage.
C)source data automation.
D)All of the above are correct.

Accepted Answer

Adequate insurance coverage is crucial for an organization to recover from a disaster by providing necessary funds for the replacement of destroyed inventories and assets. Stand-by facilities and source data automation may also be helpful, but they are not as essential as insurance coverage.

Question 6

There are four basic activities in the production cycle.The step that may incorporate robots and computer-controlled machinery to achieve its goals is
A)product design.
B)planning and scheduling.
C)production operations.
D)cost accounting.

Accepted Answer

Production operations involve the actual manufacturing of the product, which often requires the use of machinery to assemble or process materials. Robots and computer-controlled machinery are commonly used in this step to increase efficiency and precision. Product design involves designing the product, planning and scheduling involves setting production timelines, and cost accounting involves tracking and analyzing production costs.

Question 7

Which of the following is not a type of cost accounting system?
A)activity-based costing
B)just-in-time costing
C)job order costing
D)process costing

Accepted Answer

Just-in-time costing is not a type of cost accounting system. It is a lean manufacturing technique that focuses on reducing waste and increasing efficiency in production processes. The other three options, activity-based costing, job order costing, and process costing, are all types of cost accounting systems.

Question 8

Which type of information below should not be maintained by the AIS in accounting for fixed assets?
A)identification/serial number
B)cost
C)improvements
D)market value

Accepted Answer

The market value of fixed assets is not necessary information for accounting purposes because it is not used in calculating depreciation or determining the value of the assets on the balance sheet.

Question 9

The best control procedure for accurate data entry is
A)the use of on-line terminals.
B)an access control matrix.
C)passwords and user IDs.
D)the automation of data collection.

Accepted Answer

Automating data collection reduces human error and ensures more accurate data entry by minimizing manual input.

Question 10

Detailed data about warranty and repair costs is considered an applicable control used to mitigate the threat of
A)underproduction.
B)overproduction.
C)poor product design.
D)suboptimal investment of fixed assets.

Accepted Answer

Detailed data about warranty and repair costs can help identify products that have poor design or manufacturing issues, enabling the company to take corrective actions to improve the product. This control helps mitigate the threat of poor product design.

Question 11

The threat of loss of data exposes the company to
A)the loss of assets.
B)ineffective decision making.
C)inefficient manufacturing.
D)All of the above are correct.

Accepted Answer

The loss of data can lead to the loss of assets, as sensitive information could be compromised or stolen. It can also result in ineffective decision making, as important data needed to make informed decisions would not be available. Additionally, it can cause inefficient manufacturing processes as production schedules and inventory management could be impacted. Therefore, all of the above are correct.

Question 12

Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using __________ but an AIS enhancement is to use __________ to record and track direct labor costs.
A)job-time tickets; coded identification cards
B)move tickets; coded identification cards
C)employee earnings records; job-time tickets
D)time cards; electronic time entry terminals

Accepted Answer

The answer of Direct labor must be tracked and accounted...

Question 13

A company's production process may incorporate various forms of information technology such as robots and computer-controlled machinery.One effect of using such a process is a shift from mass production to custom order manufacturing.This process is called
A)ERP.
B)CRM.
C)AIS.
D)CIM.

Accepted Answer

CIM (Computer Integrated Manufacturing) refers to the use of computers to control the entire production process, allowing for flexibility and customization in manufacturing, shifting from mass production to custom order manufacturing.

Question 14

To curtail the threat of theft or destruction of inventories and other fixed assets,the organization may wish to implement which of the following controls?
A)review and approval of fixed asset acquisitions
B)improved and timelier reporting
C)better production and planning systems
D)document all movement of inventory through the production process

Accepted Answer

Documenting all movement of inventory through the production process helps track and monitor inventory, reducing the risk of theft or destruction by ensuring accountability and transparency.

Question 15

Manufacturing overhead consists of all manufacturing costs that are not economically feasible to trace directly to specific jobs or processes.Which of the costs below would not be considered an overhead cost?
A)utilities
B)rent
C)earnings of factory production employees
D)salaries of factory production supervisors

Accepted Answer

The earnings of factory production employees can be traced directly to specific jobs or processes as these employees are responsible for the production activities. Hence, it would not be considered an overhead cost. Utilities and rent would be considered overhead costs as they cannot be easily traced to specific jobs or processes. Similarly, salaries of factory production supervisors would also be considered overhead costs as they are not directly involved in the production activities and their salaries cannot be easily traced to specific jobs or processes.

Question 16

Overproduction or underproduction can be a threat to an organization.To which process or activity does this threat relate?
A)product design
B)planning and scheduling
C)production operations
D)cost accounting

Accepted Answer

Overproduction or underproduction can be a threat to planning and scheduling as it can lead to inefficiencies, excess inventory, and wasted resources. It is important to have accurate forecasting and planning to prevent these issues.

Question 17

The type of cost accounting system that primarily assigns costs to specific batches,or jobs,and is used where production items can be discretely identified is known as __________ cost accounting.
A)just-in-time
B)process
C)job-order
D)manufacturing resources

Accepted Answer

Job-order cost accounting is used for assigning costs to specific jobs or batches where production items can be discretely identified. Just-in-time cost accounting is a method of inventory management, not a type of cost accounting system. Process cost accounting is used in continuous production processes, where it is not feasible to identify individual cost units. Manufacturing resources is not a type of cost accounting system.

Question 18

The final step in the production cycle is the cost accounting function.There are several principal objectives of the cost accounting system.Which objective listed below is not a principal cost accounting objective?
A)to provide information for planning,controlling,and evaluating the performance of production operations
B)to provide cost data about products used in pricing and product mix decisions
C)to collect and process the information used to calculate inventory and cost of goods sold amounts that appear in the financial statements
D)to provide tests of audit control functions as part of the AIS

Accepted Answer

The principal cost accounting objectives are related to providing information for planning, controlling, evaluating performance, and making pricing and product mix decisions. Testing audit control functions is not a primary objective of the cost accounting system.

Question 19

Factory supervisory costs would be assigned to departments for
A)product-mix decisions.
B)pricing decisions.
C)performance evaluation purposes.
D)All of the above are correct.

Accepted Answer

Factory supervisory costs are indirect costs that cannot be directly traced to a specific product or service. These costs are allocated to departments or cost centers for performance evaluation purposes so that the management can evaluate each department's efficiency and effectiveness. Assigning these costs to product-mix or pricing decisions cannot be justified as they are not directly related to those decisions. Therefore, option C is the best choice.

Question 20

The accountant's role in the __________ step of production cycle activities is to understand how CIM affects the AIS.
A)production operations
B)product design
C)planning and scheduling
D)cost accounting methods

Accepted Answer

The production operations step involves the conversion of raw materials into finished goods. The accountant's role in this step is to understand how computer-integrated manufacturing (CIM) affects the accounting information system (AIS), including how to record transactions and adjust for inventory and cost of goods sold. Therefore, option A is the best choice. Options B, C, and D describe different stages of the production cycle, but they do not directly relate to the accountant's role in understanding the impact of CIM on the AIS.

Quiz 12: The Production Cycle

The general threat of the loss of production data can greatly slow or halt production activity within an organization.To counteract such a major threat,which of the following organization controls should be implemented and maintained?

The use of various forms of information technology in the production process is referred to as

Job-time tickets are used to

For replacement of inventories and assets destroyed by fire or other disasters,an organization needs

There are four basic activities in the production cycle.The step that may incorporate robots and computer-controlled machinery to achieve its goals is

Which of the following is not a type of cost accounting system?

Which type of information below should not be maintained by the AIS in accounting for fixed assets?

The best control procedure for accurate data entry is

Detailed data about warranty and repair costs is considered an applicable control used to mitigate the threat of

The threat of loss of data exposes the company to

Direct labor must be tracked and accounted for as part of the production process.Traditionally,direct labor was tracked using but an AIS enhancement is to use to record and track direct labor costs.

A company's production process may incorporate various forms of information technology such as robots and computer-controlled machinery.One effect of using such a process is a shift from mass production to custom order manufacturing.This process is called

To curtail the threat of theft or destruction of inventories and other fixed assets,the organization may wish to implement which of the following controls?

Manufacturing overhead consists of all manufacturing costs that are not economically feasible to trace directly to specific jobs or processes.Which of the costs below would not be considered an overhead cost?

Overproduction or underproduction can be a threat to an organization.To which process or activity does this threat relate?

The type of cost accounting system that primarily assigns costs to specific batches,or jobs,and is used where production items can be discretely identified is known as __________ cost accounting.

The final step in the production cycle is the cost accounting function.There are several principal objectives of the cost accounting system.Which objective listed below is not a principal cost accounting objective?

Factory supervisory costs would be assigned to departments for

The accountant's role in the __________ step of production cycle activities is to understand how CIM affects the AIS.