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Chapter 1: Introduction to Business Process Learning Objectives After completing this chapter you will be able to: 1. Define the functional organizational structure, and explain why this structure... creates problems for modern businesses 2. Describe key business processes in an organization 3. Identify the main integration points between and among processes 4. Understand the cross-functional nature of processes and their relationship to organizational areas 5. Adopt and apply an integrated perspective to business processes 6. Describe GBI’s organizational structure 7. Explain how the SAP system promotes an integrated approach to business processes Chapter Outline and Teaching Suggestions 1. The Functional Organizational Structure a. The Silo Effect b. Enterprise Systems Discuss how companies are organized, and explain that the functional structure is the most common organizational structure. You can use a university or company or a business school department that you are familiar with as an example. Point out that processes are crossfunctional. Ask the question: Why is the functional structure so common? Figure 1-1 will assist you in explaining the cross-functional nature of business processes. Explain the silo effect and its negative implications for modern business organizations. You can give an example such as creating a sales order in sales and marketing with no integration or communication with inventory management or production. Point out that the nature of the functional organizational structure and the cross-functional nature of processes directly conflict with each other. Explain the benefits of an enterprise system (ES) (i.e., supports end-to-end processes, productivity, competitive edge, monitoring and changing of business processes, etc.). 2. Business Processes a. Procurement - Buy b. Production - Make c. Fulfillment - Sell d. Material Planning - Plan e. Inventory and Warehouse Management - Store f. Lifecycle Data Management - Design g. Asset Management and Customer Service - Service h. Human Capital Management - People i. Project Management - Projects j. Financial Accounting - Track for Track for External Reporting k. Management Accounting - Track for Internal Reporting Define and explain a business process. Point out that organizations use many processes to achieve their objectives and they employ specific terms to identify the processes. Processes can be directly related or closely related to creating and delivering goods and services. Use Figure 1-2 to illustrate a process that is executed in response to a need (trigger). The process is carried out through a sequence of steps and results in an output. You can use an example such as ordering supplies. Processes can be supported by other processes and can have numerous sub-processes. Point out that communication and coordination of tasks are very important. Figure 1-3 can assist you in explaining this point. Ask students to indentify some other processes that they are familiar with. Describe and give examples of the business processes (A - K). Figures 1-4 through 1-10 will assist you. 3. Global Bicycle, Incorporated (GBI) Explain that Global Bicycle, Incorporated (GBI) is a fictional company that is used to illustrate the important concepts, processes, and techniques discussed in the textbook. Figure 1-11 will assist you in explaining GBI's organizational structure. Call up the SAP University Alliance Community (UAC) website http://uac.sap.com, and demonstrate the functionality and services available for students. Also instruct students to read the GBI Backround Document on the UAC to understand GBI’s history, products and operations. 4. How To Use This Book a. Chapter Structure b. SAP Software and Certification c. WileyPLUS Explain the four key sections in most of the process chapters. Provide a brief background on the origins of SAP and the problems it initially solved. Explain that most SAP consultants are not programmers and have mastered the material presented in this book. Explain the three levels of SAP Certification and the value added of becoming a SAP-certified consultant. Point out that the importance of the WileyPLUS online supplements and the value added to passing the SAP Certification exam. Reinforce the point that using this textbook and the ancillary materials can substitute for taking a formal TERP 10 course. Review questions 1. Question: Describe the functional organizational structure. Why do you think this structure is so common? . : The functional organization structure is divided into functions, or departments, each of which is responsible for a set of closely related activities. This type of organizational structure is widely used because it spreads the responsibility across an organization instead of locating it in one particular person or group. In addition, it enables people to specialize in terms of skills and knowledge. 2. Question: What is the silo effect? Why does it exist? How can an organization reduce or eliminate the silo effect? . : The silo effect refers to an organizational structure in which workers complete their tasks in their functional “silos” without regard to the consequences for the other functions in the process. This situation exists because each department within a functional organization works independently and focuses on its objectives. This tendency can be reduced by thinking sideways or viewing the business across functional boundaries and focusing on the end-to-end nature of the process and its intended outcomes. 3. Question: What is a business processes? Why is a process view of organizations essential to becoming a successful manager? . : A business process is a set of tasks or activities that produce desired outcomes. Every process is triggered by some event, such as receiving a customer order or recognizing the need to purchase something. A process view can liberate managers from the silo effect. Managers must have a solid understanding of the processes that their company uses so that they can meet their company's and customer's satisfaction. 4. Question: Briefly describe the key business processes included in this chapter in terms of their key steps. . : The key business processes discussed in this chapter are the procurement process (buy), the production process (make), and the fulfillment process (sell). The procurement process refers to all of the activities involved in buying or acquiring the materials used by the organization, such as the raw materials needed to make products. The production process involves the actual creation of the products within the organization. The fulfillment process consists of all the steps involved in selling and delivering the products to the organization’s customers. 5. Question: Explain the interrelationships among the key processes discussed in this chapter. Why are these interrelationships important? . : This chapter discusses many interrelationships among the various processes found within an organization. These various processes must be coordinated in order to be performed successfully. For example, the asset management and customer service processes are closely integrated with production and sales processes. This interrelationship is important to producing quality products, maintenance of production equipment, repairs of products sold to customers, and providing customer satisfaction. Exercises Exercises for this chapter are available on the Wiley student companion website at http://www.wiley.com/college/magal/. Test Questions Three types of test questions are provided – True/False, Multiple-choice (one right ), and multiple (at least two right s). These are provided in MS word format as well as in a format that can be imported as a test in blackboard. The files are: Chapter01 Test Questions True False.docx Chapter01 Test Questions Multiple-choice.docx Chapter01 Test Questions Multiple-.docx Blackboard versions of these files are also provided. These versions end with the word Blackboard. Remember that these are zipped files that should be uploaded to Blackboard as they are, without unzipping. Your Blackboard administrator can help you with any problems you encounter in uploading these files to your course on Blackboard. If you include all three types of questions, the following grading suggestion is offered. T/F questions 1 point each Multiple-choice questions 2 points each Multiple- questions 3 (or 4) points each. All of the correct s must be chosen in order to receive credit for Multiple- questions. We suggest you do not offer partial credit. Chapter 1 Introduction to Business Processes Multiple Questions 1. Within the financial structure, typical functions or departments found in a modern organization include which of the following? a. purchasing b. operations c. internships d. finance e. marketing , b, d, e 1 Yes Section: The Functional Organizational Structure 2. Which of the following are steps within a generic business process of an organization? a. Payment b. Trigger c. Shipment d. Outcome e. Confirmation , d Section: Business Processes Diffic 4 3. Which processes have an impact on an organization’s finances? a. Financial accounting processes b. Project management processes c. Management accounting or controlling processes d. Material planning process e. Procurement process , c Section: Business Processes 6 Yes 4. Which processes focus primarily on people and projects? a. Financial accounting processes b. Procurement process c. Production process d. Human capital management processes e. Project management processes , e Section: Business Processes 6 5. Which of the following are components of the procurement process? a. Warehouse b. Purchasing c. Sales d. Operations e. Accounting , b, e 7 Yes Section: Business Processes: Production-Make 6. Which of the following are components of the production (make) process? a. Sales b. Operations c. Warehouse d. Accounting e. Production , e 7 Section: Business Processes: Production-Make 7. Which of the following are components of the fulfillment (sell) process? a. Sales b. Operations c. Warehouse d. Accounting e. Production , c, d 8 Section: Business Processes: Fulfillment-Sell 8. The term materials encompasses which of the following? a. Products b. Components c. Parts d. Anything used in an organization e. Accounting , b, c, d 8 Section: Business Processes: Fulfillment-Sell 9. Which of the following activities are related to the production process? a. Request materials b. Store materials c. Locate Materials d. Issue Materials e. Receive Payment , b, c, d 9 Section: Business Processes: Inventory and Warehouse Management-Store 10. Which of the following activities are related to the procurement process? a. Issue Materials b. Receive Materials c. Prepare for Storage d. Store Materials e. Locate Materials , c, d 9 Section: Business Processes: Inventory and Warehouse Management-Store 11. Which of the following activities are related to the fulfillment process? a. Locate Materials b. Prepare Shipment c. Prepare for Storage d. Store Materials e. Ship to Customer , b, e 9 Section: Business Processes: Inventory and Warehouse Management-Store Yes 12. Which of the following are components of the lifecycle data management process? a. Engineering b. Marketing c. Accounting d. Production e. Sales , b, d 10 Section: Business Processes: Lifecycle Data Management-Design 13. Which departments take part in the conception of an idea? a. Accounting b. Production c. Engineering d. Sales e. Marketing , e 10 Section: Business Processes: Lifecycle Data Management-Design 14. In which elements of the lifecycle data management process does marketing play a role? a. Design b. Conceive product ideas c. Make d. Marketing & service e. Discontinue product , d, e 10 Section: Business Processes: Lifecycle Data Management-Design 15. In which components of the asset management process is production involved? a. Settlement b. Perform maintenance c. Authorize maintenance d. Request maintenance e. Perform service , c, d 11 Section: Business Processes: Asset Management and Customer Service-Service 16. Sales is involved in which steps in the customer service process? a. Perform service b. Create service request c. Settlement d. Authorize service e. Request maintenance , d 11 Section: Business Processes: Human Capital Management-People 17. What part of the project management process is within the various functional areas? a. Budgeting b. Execution c. Settlement d. Planning , b, c, d 12 Yes Section: Business Processes: Project Management-Projects 18. Which of the following products fall(s) within GBI’s line of business? a. Deluxe and professional touring bikes b. Men and women’s off-road bikes c. Motor bikes d. Bike accessories , b, d 14 Section: Global Bicycle Incorporated (GBI) Yes 19. What is true about SAP R/3? a. Supports a single function or department b. Executes every process from start to finish c. Consolidates process data in a single database d. Enables users to view the status of a process in real time , c, d 15 Yes Section: How to use this book: SAP Software and Certification Chapter 1 Introduction to Business Processes Multiple Choice Questions 1. Which term refers to business processes that are not executed by a single group or function? a. Silo Effect b. Cross-Functional c. Functional Structure d. Enterprise Systems e. Organizational Structure 1 Section: The Functional Organizational Structure 2. Which term refers to a system in which workers complete their tasks in separate departments without regard to the consequences for the other components of the process? a. ERP Effect b. Cross-Functional c. Functional Structure d. Enterprise Systems e. Silo Effect 2 Section: The Functional Organizational Structure: The Silo Effect 3. Which system supports business processes end to end? a. Management System b. Accounting System c. Enterprise System d. Functional Structure e. Document System 2 Yes Section: The Functional Organizational Structure: The Silo Effect 4. Which of the following statements about business processes is true? a. They are executed across multiple functions. b. They are initiated by some type of trigger. c. They involve multiple steps. d. All of the above e. None of the above 4 Section: Business Processes 5. Which term represents a set of tasks or activities that produce desired outcomes? a. Business Process b. Trigger c. Outcome d. Enterprise Resource Planning e. None of the above Section: Business Processes 4 6. Which term refers to all of the activities involved in buying or acquiring the materials used by the organization, such as raw materials needed to make products? a. Material Planning b. Procurement Process c. Production Process d. Fulfillment Process e. Lifecycle Data Management Section: Business Processes Yes 5 7. Which process involves the actual creation of the products? a. Material Planning b. Procurement Process c. Production Process d. Fulfillment Process e. Lifecycle Data Management Section: Business Processes 5 8. Which process uses historical data and sales forecasts to plan which materials will be procured and produced? a. Material Planning b. Procurement Process c. Production Process d. Fulfillment Process e. Lifecycle Data Management Section: Business Processes Yes 5 9. Which process supports the design and development of products from the initial product idea stage through the discontinuation of the product? a. Material Planning b. Procurement Process c. Production Process d. Fulfillment Process e. Lifecycle Data Management Section: Business Processes 5 10. Which process tracks the financial impact of process steps with the goal of meeting legal reporting requirements? a. Human Capital Management (HCM) b. Project Management c. Financial Accounting d. Management Accounting or Controlling (CO) e. None of the above Section: Business Processes 6 11. Which process is used to plan and execute large projects such as the construction of a new factory or the production of complex products such as airplanes? a. Human Capital Management (HCM) b. Project Management c. Financial Accounting d. Management Accounting or Controlling (CO) e. None of the above Section: Business Processes 6 12. Which process focuses on people within an organization and includes functions such as recruiting, hiring, training, and benefits management? a. Human Capital Management (HCM) b. Project Management c. Financial Accounting d. Management Accounting or Controlling (CO) e. None of the above Section: Business Processes Diffic 6 13. What is the final step of the procurement process? a. Invoice b. Purchase Requisition c. Purchase Order d. Payment e. None of the above 6 Section: Business Processes: Procurement-Buy 14. What steps are involved in the accounting portion of the procurement process? a. Receiving the materials and the invoice b. Creating the purchase requisition and sending payment c. Creating and sending the purchase order d. Creating the purchase requisition and receiving the materials e. Receiving the invoice and sending payment Diffic 7 Yes Section: Business Processes: Procurement-Buy 15. What is the first step of the production process? a. Authorize Production b. Request Production c. Create Product d. Receive Finished Goods e. Issue Raw Materials 7 Yes Section: Business Processes: Procurement-Make 16. What function does the warehouse perform in the fulfillment process? a. Prepares and sends the shipment to the customer b. Communicates data related to the order to other parts of the organization c. Tracks the order d. Notifies the customer e. None of the above 8 Yes Section: Business Processes: Procurement-Make 17. ___________ is concerned with matching the demand for materials in the organization with the supply. a. Business Planning b. The Silo Effect c. Project Management d. Material Planning e. None of the above 8 Section: Business Processes: Material Planning-Plan 18. Which of the following is concerned with the storage and movement of materials? a. Business Planning b. Silo Effect c. Project Management d. Material Planning e. Inventory and warehouse management (IWM) 9 Section: Business Processes: Inventory and Warehouse Management-Store 19. _____________enables an organization to optimize its product development process, from design to market, while ensuring that it complies with industry, quality, and regulatory standards? a. Business Planning b. Lifecycle Data Management c. Project Management d. Material Planning e. None of the above 10 Section: Business Processes: Lifecycle Data Management-Design 20. _____________ provides tools to manage and store documents securely and to keep track of the multiple versions of these documents? a. Document Management b. Enterprise Management c. Project Management d. Material Planning e. None of the above 10 Section: Business Processes: Lifecycle Data Management-Design 21. How does GBI Global sell its merchandise? a. Directly to customers b. Via a network of specialized dealers c. Via the Internet d. All of the above e. None of the above 13 Section: Global Bicycle Incorporated (GBI) Yes 22. Which of the following statements about SAP R/3 is true? a. It supports a single function or department b. It is an end-to-end enterprise system c. Sharing data between departments is problematic d. None of the above 15 Section: How to use this book: SAP Software and Certification Yes Chapter 1 Introduction to Business Processes True-False Questions 1. The most common organizational structure within modern organizations is the functional structure. 1 Section: The Functional Organizational Structure 2. Losing sight of the big picture is commonly referred to as the silo effect. 2 Section: The Functional Organizational Structure: The Silo Effect 3. Systems that support end-to-end processes are called business processes. Section: Business Processes 4 4. An enterprise system is a set of tasks or activities that produce desired outcomes. 2 Section: The Functional Organizational Structure: Enterprise Systems 5. Without the various steps of the business process, a company can’t successfully bill customers and ship products. Section: Business Processes 4 6. The lifecycle data management (design) process supports the design and development of products from the initial product idea stage through the discontinuation of the product. Section: Business Processes 5 7. The material planning process is used to maintain internal assets such as machinery and to delivery after-sales customer services such as repairs. Section: Business Processes 5 8. The fulfillment process (sell) consists of all the steps involved in selling and delivering the products to the organization’s customers. Section: Business Processes 5 9. The financial accounting process focuses on internal reporting to manage costs and revenues. Section: Business Processes Diffic 6 10. The procurement process includes all of the tasks involved in acquiring needed materials. 6 Section: Business Processes: Procurement-Buy 11. Within the production process, the issuing of raw materials takes place in the warehouse. Diffic 7 Section: Business Processes: Procurement-Make 12. Materials encompass all the products, components, and parts that are used in an organization. 8 Section: Business Processes: Material Planning-Plan 13. Lead time is the time between placing the order and receiving confirmation that the item has been shipped. 8 Section: Business Processes: Material Planning-Plan 14. The purpose of material planning is to match supply with demand. 8 Section: Business Processes: Material Planning-Plan 15. Insufficient supply results in a situation called “stock out.” 8 Section: Business Processes: Material Planning-Plan 16. Excess supply will result in lower inventory costs because the company is eligible for a bulk rate. Diffic 8 Section: Business Processes: Material Planning-Plan 17. Forecasts of finished goods are determined by data from material planning. 9 Section: Business Processes: Material Planning-Plan 18. Large warehouses do not need to move items as quickly and efficiently as smaller warehouses. 9 Section: Business Processes: Inventory and Warehouse Management-Store 19. Asset management is concerned with both the preventive and the corrective maintenance of an organization’s equipment. 10 Section: Business Processes: Asset Management and Customer Service-Service 20. Document management provides tools to manage and store documents securely and to keep track of the multiple versions of these documents. 10 Section: Business Processes: Lifecycle Data Management-Design 21. The final stage of asset management and customer service is the authorization maintenance stage. 11 Section: Business Processes: Asset Management and Customer Service-Service 22. The final stage of the customer service process is the settlement stage. 11 Section: Business Processes: Asset Management and Customer Service-Service 23. A project is permanent in nature and is typically associated with smaller, simpler projects. 11 Section: Business Processes: Project Management-Projects 24. During the planning phase of a project the scope of the project is defined and the milestones and deadlines are established. 12 Section: Business Processes: Project Management-Projects 25. Projects rely on resources located in and work performed in other processes. 12 Section: Business Processes: Project Management-Projects 26. Common reports of financial accounting include income statement, profit and loss, and balance sheet. 12 Section: Business Processes: Financial Accounting-Track for External Reporting 27. Accounts payable is used to track money owed by customers. 13 Section: Business Processes: Financial Accounting-Track for External Reporting 28. Asset accounting is concerned with tracking financial data related to assets such as machinery and cars. 13 Section: Business Processes: Financial Accounting-Track for External Reporting 29. Accounts receivable is used to track money that is owed to vendors. 13 Section: Business Processes: Financial Accounting-Track for External Reporting 30. Management accounting helps an organization track costs and revenues to assess its profitability 13 Section: Business Processes: Management Accounting-Track for Internal Reporting Chapter 2 Introduction to SAP ERP Multiple Questions 1. A three-tier architecture includes which of the following components? a. Operating system layer b. Data layer c. Presentation layer d. Application layer e. Network layer , c, d 1 Yes Section: Enterprise Systems – Architecture of Enterprise Systems 2. Which of the following statements concerning Web services are true? a. Web services expose functionality to other applications. b. One Web service can be used to execute multiple steps in a process. c. Web services have standard interfaces for input and output. d. Web services are an essential component of enterprise systems. e. Web services can be used to create composite applications. , d, e Diffic 2 Section: Enterprise Systems – Client-Server Architecture 3. Which of the following SAP systems are used to support inter-company processes? (2 correct s) a. SAP ERP b. SAP SCM c. SAP CRM d. SAP BI e. SAP Netweaver , c Section: Enterprise Systems 4 4. Which of the following SAP systems are used to support inter-company processes? a. SAP SCM b. SAP CRM c. Production planning (PP) module d. Materials management (MM) module e. Strategic enterprise management (SEM) module , b Section: Enterprise Systems 4 Yes 5. Which of the following statements regarding organizational data are true? a. Organizational data represent entities such as customers and vendors. b. Organizational data define the structure of an enterprise. c. Organizational data are a consequence of the execution of process steps. d. Organizational data are constantly changing. e. Organizational data change infrequently. , b 6 Section: Data in an Enterprise System – Organizational Data 6. Which of the following statements regarding master data are true? a. Master data represent entities such as customers and vendors. b. Master data define the structure of an enterprise. c. Master data are a consequence of the execution of process steps. d. Master data are constantly changing. e. Master data change infrequently. , c 8 Section: Data in an Enterprise Systems – Master Data 7. Which of the following statements concerning transaction data are true? a. Transaction data represent entities such as customers and vendors. b. Transaction data define the structure of an enterprise. c. Transaction data are a consequence of the execution of process steps. d. Transaction data are constantly changing. e. Transaction data change infrequently. , d 12 Yes Section: Enterprise Systems – Transaction Data 8. Which of the following are examples of organizational data in SAP? a. Client b. Customer c. Purchasing Organization d. Vendor e. Plant , b, d 6 Section: Data in an Enterprise System – Organizational Data 9. Which of the following are examples of master data in SAP? a. Client b. Customer c. Purchasing Organization d. Vendor e. Plant , d 8 Section: Data in an Enterprise System – Master Data 10. A plant can be used to represent which of the following? a. A factory b. A storage facility (warehouse, DC) c. An office d. A legal entity e. A company vehicle , b, c 8 Section: Data in an Enterprise System – Organizational Data 11. Material master data are grouped based on: a. Process b. Material type c. Company Code d. Organizational Element e. Key segments , c, d 9 Section: Data in an Enterprise System – Master Data 12. Which of the following statements regarding instance level reporting are true? a. It provides the status of one occurrence of a process (e.g., one customer order). b. It provides information on the performance of a process across many occurrences (e.g., customer orders over time). c. It is based on data in the transactional system. d. It is based on data in the informational system. e. It uses aggregated data. , c Section: Reporting 15 13. Which of the following statements regarding process level reporting are true? a. It provides the status of one occurrence of a process (e.g., one customer order). b. It provides information on the performance of a process across many occurrences (e.g., customer orders over time). c. It is based on data in the transactional system. d. It is based on data in the informational system. e. It uses aggregated data. , c, e Section: Reporting Diffic 15 14. Which of the following are examples of online lists? a. Picking list b. Billing due list c. List of customers d. Delivery due list e. List of documents , e 17 Section: Reporting - Online Lists 15. Which of the following are examples of work lists? a. Picking list b. Billing due list c. List of customers d. Delivery due list e. List of documents , b, d 16 Section: Reporting - Work Lists 16. Supply chain management deals with a. Managing relationships with suppliers b. Planning for production demand requirements c. Optimizing transportation and logistics for materials d. Providing data to help manage sales , c 4 Yes Section: Enterprise Systems – Enterprise Resource Planning System 17. Which of the following statements concerning SAP NetWeaver are true? a. It deals exclusively with processes that are executed within a company. b. It helps companies integrate with other non-SAP applications. c. It serves as the application platform on which the SAP Business Suite runs. d. It enables companies to plug in independent software vendor (ISV) applications on top of their core ERP and suite applications. , c, d 5 Section: Enterprise Systems – Application Platform 18. Plant is an organizational element where a. Financial accounting takes place b. Products and services are created c. Production planning is carried out d. Services and maintenance is performed , c, d 7 Section: Data in an Enterprise Systems – Organizational data 19. Transaction data make use of which types of data? a. Master b. Organizational c. Situational d. None of the above , b, c 12 Section: Data in an Enterprise Systems – Transaction data 20. Information structures enable which types of analysis? a. Standard analysis b. Flexible analysis c. Rigid analysis d. All of the above , b 19 Section: Reporting – Information Systems Chapter 2 Introduction to SAP ERP Multiple Choice Questions 1. Which term relates to the technical capabilities that allow systems to connect with one another through standardized interfaces called Web services? a. Enterprise Resource Planning b. Supply Chain Management c. Architecture d. Service-Oriented Architecture e. None of the above Section: Enterprise Systems 2 Yes 2. Which term refers to the technical structure of the software, how users interact with the software, and how the software is physically managed on computer hardware? a. Architecture b. Supply Chain Management c. Enterprise Resource Planning d. Service Oriented Architecture e. None of the above Section: Enterprise Systems 1 3. Which of the following is used to integrate several client-server applications and create enterprise mash-ups, or composite applications? a. Management System b. Accounting System c. Enterprise System d. All of the above e. Web Services Section: Enterprise Systems 2 Yes 4. Which system connects a company’s ERP system to those of its customers? a. Application Platform b. Customer Relationship Management (CRM) c. Enterprise Solution d. Product Lifecycle Management (PLM) e. None of the above 4 Section: Enterprise Systems 5. Which of the following systems helps companies administer the processes of research, design, and product management? a. Application Platform b. Customer Relationship Management (CRM) c. Enterprise Solution d. Product Lifecycle Management (PLM) e. None of the above Section: Enterprise Systems 4 6. Which program is the “operating system” for an entire company’s business processes? a. Microsoft Vista b. Linux c. SAP NetWeaver d. SAP Prolific e. None of the above Section: Application Platforms 5 7. The highest organizational level in SAP ERP is the a. Vendor b. Client c. Material Master d. Plant e. None of the above 7 Section: Data in an Enterprise System – Organizational Data 8. Which of the following is(are) used to represent the structure of an enterprise? a. Organizational Data b. Project Management c. Client d. Plant e. Lifecycle Data Management 6 Section: Data in an Enterprise System – Organizational Data 9. Which of the following terms refers to an organizational element that performs multiple functions and is relevant to several processes? a. Warehouse b. Procurement c. Plant d. Fulfillment e. Lifecycle Data Management 7 Yes Section: Data in an Enterprise System – Organizational Data 10. How many company codes can a plant belong to? a. One b. Two c. Three d. Any Number 8 Section: Data in an Enterprise System – Organizational Data 11. Which of the following master data is used in numerous processes? a. Material Master b. Plant c. Company Code d. Customer Master e. Vendor Master 8 Section: Data in an Enterprise System – Master Data 12. Materials that are created by the production process from other materials are referred to as _____________ a. Finished Goods (FERT) b. Semi-finished Goods (HALB) c. Trading Goods (HAWA) d. Raw Materials e. None of the above 10 Section: Data in an Enterprise System – Master Data 13. What type of materials is purchased from a vendor? a. Trading Goods b. Finished Goods (FERT) c. Semi-finished Goods (HALB) d. Material Types e. None of the above Diffic 10 Section: Data in an Enterprise System – Master Data 14. Materials that are purchased from an external source (a vendor) and used in the production process are known as ______________ a. Finished Goods (FERT) b. Semi-finished Goods (HALB) c. Trading Goods (HAWA) d. Raw Materials e. None of the above 10 Section: Data in an Enterprise System – Master Data 15. Which of the following terms refers to materials with similar characteristics? a. Material Master b. Material Group c. Transaction Data d. Material number e. None of the above 11 Section: Data in an Enterprise System – Master Data 16. ____________reflect(s) the consequences of executing process steps. a. Material Groups b. Organizational Data c. Transaction Data d. Project Management e. None of the above 12 Section: Data in an Enterprise System – Transaction Data 17. Financial accounting (FI) documents, management accounting or controlling (CO) documents, and material documents are referred to as a. Transaction Documents b. Transaction Data c. Material Group d. Virtual Documents e. None of the above Diffic 13 Section: Data in an Enterprise System – Transaction Data 18. Which term is generally used to describe the ways that users can view and analyze data to help them make decisions and complete their tasks? a. Reporting b. Evaluating c. Characteristics d. Period Definition e. Online Analytic Processing (OLAP) 14 Yes Section: Data in an Enterprise System – Reporting 19. Which of the following is(are) used to capture specified transaction data in an aggregated and summarized form that enables users to analyze the data as needed. a. Reporting b. Evaluating c. Information Structures d. Period Definition e. Online Analytic Processing (OLAP) 15 Yes Section: Data in an Enterprise System – Reporting 20. Which of the following identify tasks that are scheduled to be completed in a process? a. Online Lists b. Parameters c. Information Structures d. Work Lists e. Period definitions 16 Section: Reporting – Work Lists Chapter 2 Introduction to SAP ERP True-False Questions 1. The architecture of an enterprise system refers to the technical structure of the software, how users interact with the software, and how the software is physically managed on computer hardware. 1 Section: Enterprise Systems – Architecture of Enterprise Systems 2. The three layers of the “three-tier client-server architecture” are the presentation layer, windows layer, and data layer. 1 Section: Enterprise Systems – Architecture of Enterprise Systems 3. When you access the Internet, your browser is the presentation layer. 2 Section: Enterprise Systems – Architecture of Enterprise Systems 4. Scalability is the ability of the hardware and software to support a greater number of users easily over time. 2 Section: Enterprise Systems – Architecture of Enterprise Systems 5. Service-oriented architecture (SOA) is the fundamental concept behind systems connecting through standardized interfaces called Web services. Diffic 2 Section: Enterprise Systems – Architecture of Enterprise Systems 6. Enterprise resource planning (ERP) focuses on the internal operations of an organization. :True 3 Section: Enterprise Planning Systems 7. Inter-company processes take place within a single company. :False 4 Section: Enterprise Planning Systems 8. Customer relationship management (CRM) systems connect a company’s ERP system to its accounting software system. 4 Section: Enterprise Planning Systems 9. Supply chain management (SCM) systems help companies execute the processes of research, design, and product management. 4 Section: Enterprise Planning Systems 10. Application platforms serve as a type of "enterprise operating system" for a company’s ES landscape by allowing all of the various systems to communicate seamlessly with one another as well as with systems outside the company. 5 Section: Application Platforms 11. Current versions of the SAP business suite can’t run on SAP NetWeaver. 6 Section: Application Platforms 12. SAP NetWeaver is the “operating system” for an entire company’s business processes. 6 Section: Application Platforms 13. Organizational data are used to represent the structure of an enterprise. 6 Section: Data in an Enterprise System – Organizational Data 14. A company code is the highest organizational level in SAP ERP. 7 Section: Data in an Enterprise System – Organizational Data 15. A client represents each company within an enterprise. 7 Section: Data in an Enterprise System – Organizational Data 16. Material master are organizational elements that performs multiple functions and is relevant to several processes. 7 Section: Data in an Enterprise System – Organizational Data 17. A building can house only a single plant. Diffic 8 Section: Data in an Enterprise System – Organizational Data 18. A plant can be a factory, a warehouse, a regional distribution center, or a service center. 8 Section: Data in an Enterprise System – Organizational Data 19. The material master is the most commonly used organizational data in an enterprise. 8 Section: Data in an Enterprise System – Master Data 20. The material master includes a large amount of data because it is used in numerous processes. 8 Section: Data in an Enterprise System – Master Data 21. Materials are categorized into different material types based on the way they are used in the firm’s operations. Section: Material Types 9 22. The four most common material types are raw materials, semi‐finished goods, finished goods, and exported goods. Section: Material Types Diffic 9 23. Raw materials (ROH) are purchased from an external source ‐ a vendor‐ and used in the production process. Section: Material Types 10 24. Trading goods (HAWA) are resold to customers after they have been modified by the company. Section: Material Types 10 25. Transaction data reflect the consequences of executing process steps. 12 Section: Enterprise Systems – Transaction Data 26. The financial accounting documents, management accounting or controlling documents, and material documents are all “virtual.” 13 Section: Enterprise Systems – Transaction Data 27. Reporting is a general term for the methods a user can utilize to update data in the ERP system to execute process steps. 14 Section: Reporting 28. The online transaction processing (OLTP) system is designed to capture and store detailed organizational data. 15 Section: Reporting 29. Work lists identify tasks that are scheduled to be completed in a process. 16 Section: Reporting – Work Lists 30. Information structures display lists of master data, such as materials, vendors, and purchasing info records, and documents, such as transaction documents, FI, CO, and material documents that are generated during the execution of a process. 17 Section: Reporting – Online Lists Chapter 4 The Procurement Process Multiple Questions 1. Which of the following are organizational elements in purchasing? a. Shipping point b. Company code c. Vendors d. Materials e. Plant , e Section: Organizational Data 2 2. Which of the following statements about storage locations are true? a. A storage location must be assigned to a plant b. A storage location can be assigned to more than one plant c. A client can have more than one storage location d. A plant can have more than one storage location e. A storage location can hold only materials with a stock status of unrestricted use , c, d Section: Storage Location Yes 2 3. Which of the following are organizational elements in purchasing? a. Sales organization b. Purchasing area c. Plant d. Vendor e. Storage location , e Section: Storage Location 3 4. Which of the following statements about purchasing organizations are correct? a. They negotiate conditions of purchase with vendors b. They can purchase only for one company c. They can purchase for multiple plants d. They can purchase for multiple plants, but they must be within the same company code e. They identify a buyer or a group of buyers , c 3 Section: Purchasing Organization 5. A purchase order can be sent to which of the following? a. A vendor b. A customer c. A plant d. A purchasing organization e. A purchasing group , c Section: Purchasing Group 6 6. Data for source determination are obtained from: a. A purchase order b. Purchase info records c. A source list d. Contracts and agreements e. The vendor master record , c, d Section: Purchasing Organization 6 7. Which of the following are master data that are related to the purchasing process? a. Material master b. Vendor master c. Vendor info records d. Purchasing organization e. Customer master , b, c Section: Master Data Yes 7 8. Which of the following are methods of valuing materials? a. Actual price b. Standard price c. Purchasing price d. Moving (average) price e. Selling price , d Section: Material Master Diffic 8 9. Which G/L accounts are impacted by the goods receipt step of the procurement process? a. Accounts payable b. Goods receipt / invoice receipt account c. Inventory account d. Vendor account e. Band account , c Section: Goods Receipt Diffic 32 10. Which G/L accounts are impacted by the invoice verification step of the procurement process? a. Accounts payable b. Goods receipt / invoice receipt account c. Inventory account d. Vendor account e. Bank account , b, d Section: Invoice Verification Diffic 36 11. Which of the following data categories are included in a purchasing info record? a. Freight b. Discounts c. Material number d. Vendor address e. Texts , b, e 12 Section: Purchasing Info Records 12. Data from which of the following sources are automatically included in a purchase order? a. Vendor info record b. Purchasing info record c. Material master d. Vendor master e. Purchasing organization , c, d 12 Section: Purchasing Info Records 13. Which of the following are material types? a. Consumable material b. Raw material c. Packaging d. Consignment material e. Non-valuated material , b, c, e 14 Section: Account Determination 14. Which of the following are account assignment categories? a. Asset b. Order c. Cost center d. Sales order e. Project , b, c, d, e 15 Section: Account Determination Yes 15. Materials designated as __________ can be withdrawn only for sampling or for scrap. a. Goods movement b. In-quality inspection c. Blocked stock d. Material document e. Purchase info record , c Section: Stock Type or Status 17 16. Material documents consist of a header and an items section. Which of the following are included in the items section? a. Document number b. Movement type c. Material number d. Storage location e. Document date , c, d Section: Goods Movement Yes 18 17. A purchase order can be created with reference to which of the following? a. Purchase order b. Purchase requisition c. Purchase info record d. RFQ e. Sales order , b, d Section: Order Processing Yes 25 18. Which of the following are consequences of the goods receipt step in the procurement process? a. A material document is created b. An accounting document is created c. The purchase order history is updated d. The document flow is updated e. The material master is updated , b, c, e Section: Goods Receipts Diffic Yes 30 19. Which of the following are key documents in purchasing? a. Material documents b. Fl documents c. CO documents d. Purchase order e. Invoice , b, c, d, e Section: Process 21 20. Which of the following organizational data are required when creating a purchase requisition? a. Sales organization b. Company code c. Storage location d. Purchasing organization e. Purchasing group , d, e 22 Section: Requirement Determination 21. Which steps are involved in converting a purchase requisition into a purchase order? a. Source list b. Outline purchase agreement c. Storage location d. Request for quotation e. Quotation , e 24 Section: Source of Supply Determination 22. Which of the following organizational data are required when creating a purchase order? a. User input b. Purchase Requisition c. RFQ d. Quotation e. Purchase order , c, d, e Section: Order Processing 25 23. Which transaction documents are included in a purchase order? a. Requisition b. RFQ c. Quotation d. Conditions e. Vendor , b, c Section: Order Processing 26 24. SAP can utilize which of the following forms of media to communicate with a vendor? a. Print b. E-mail c. EDI d. Web services e. Fax , b, c, d, e Section: Oder Processing 28 25. What are the key stock types (statuses) utilized in purchasing, based on usability of materials? a. Unrestricted use b. Stock in transit c. Stock on order d. Stock in storage e. Blocked stock , b, e Section: Goods Receipt 31 26. Which of the following documents are required for the invoice verification step of the procurement process? a. Vendor invoice b. Purchase requisition c. Purchase order d. Material document e. Material master , c, d Section: Invoice Verification 34 27. Which of the following are consequences of the invoice verification step of the procurement process? a. A material document is created b. An accounting document is created c. The purchase order history is updated d. G/L accounts are updated e. The sales order is updated , d, c Section: Invoice Verification Diffic Yes 34 28. Which of the following data are needed for invoice verification? a. Company code b. Purchase order c. Material document d. Invoice e. User input , c, d, e Section: Invoice Verification 35 29. Which of the following tasks are performed during the payment step? a. Selecting method of payment b. Updating master data c. Selecting invoice items d. Verifying an invoice e. Calculating the payment amount , c, e Section: Payment Processing 37 30. To complete a vendor payment, which of the following types of data must be included on the vendor master? a. Payment terms b. Payment method c. Date d. Payment address e. Amount , b, d Section: Payment Processing 37 31. Which organizational processes interact with procurement? a. Project management b. Material planning c. Fulfillment (sales) d. Management accounting e. Financial accounting , b, c, d, e 40 Section: Integration with Other Processes 32. Standard reporting tools in the transaction system are used to generate which of the following? a. Picking lists b. Online lists c. Work lists d. Inventory lists , c Section: Reporting Yes 40 Chapter 4 The Procurement Process Multiple Choice Questions 1. Which one of the following is not a type of organizational data that is utilized in the procurement process? a. Client b. Company Code c. Storage Location d. Purchasing Organization e. Manufacturing Plant Section: Organizational Data 2 2. What is a storage location? a. The place where raw materials are received b. The place within a plant where materials are kept until they are needed c. The place where materials are collected for staging and inspection d. The place within a plant where machines are installed for production purposes e. The place within a plant where finished goods are kept for sale Section: Storage Location 2 3. Which organizational element(s) control(s) the entry of accounting data in the vendor master? a. Purchasing organization b. Client c. Company Code d. Client and Company Code e. Client and Purchasing Organization Section: Organizational Data Yes 3 4. A purchasing organization is involved in all of the following operations except a. Negotiating contracts and agreements b. Negotiating pricing with vendors c. Evaluating and identifying vendors d. Determining storage locations within the plant 4 Section: Purchasing Organization 5. Which one of the following is not a model of the purchasing organization? a. Enterprise level b. Company level c. Client level d. Plant level e. Cross-plant 4-6 Section: Purchasing Organization 6. Within the plant-level purchasing organization, also known as a plant-specific purchasing Organization, a. Each plant has its own purchasing organization b. One purchasing organization is responsible for multiple plants c. Only one purchasing organization for all plants d. One purchasing organization is responsible for all company codes in the enterprise e. Two or more purchasing organizations are responsible for each plant Diffic 5 Section: Plant-Level Purchasing Organization 7. A purchasing group is an individual or a group of individuals who are responsible for all of the following except a. Creating purchase requisitions b. Negotiating contracts and agreements c. Requesting quotations from vendors d. Creating and monitoring purchase orders e. Planning for material requirements Section: Purchasing Group 6 8. Which one of the following is not one of the data types that are relevant to the purchasing process? a. Material master b. Vendor master c. Sales master d. Purchasing info records e. Conditions Section: Master Data 7 9. The key data in the purchasing view of the material master are a. The purchasing organization, the goods receipt processing time, and the delivery tolerances b. The purchasing group, the goods receipt processing time, and the delivery tolerances c. The purchasing group, the invoice, and the delivery tolerances d. The purchasing group, the material master, and the delivery tolerances e. The price, the storage location, and the delivery date Section: Material Master 9 10. Data in the vendor master are grouped into which three segments? a. General data, storage data, and purchasing data b. General data, storage data, and inventory data c. Storage data, accounting data, and purchasing data d. Storage data, accounting data, and pricing data e. General data, accounting data, and purchasing data Section: Vendor Master 9 11. General data in a vendor master contain all of the following except: a. Name b. Address c. Communication d. Payment terms and methods e. Search term Section: Vendor Master Yes 10 12. Which of the following is an intersection or combination of material data and vendor data? a. Condition type b. Purchasing info record c. Stock transfer d. Third-party order e. Search term 12 Section: Purchasing Info Records 13. Which item category would you use to have your vendor ship goods directly to your customer? a. Consignment b. Third-party c. Stock transfer d. Standard e. Transfer posting Section: Item Categories Yes 13 14. Materials that are acquired to be used within the organization are referred to as a. Stock materials b. Transfer materials c. Vendor materials d. Consumable materials e. None of the above 14 Section: Account Determination 15. Which of the following account assignment categories is used when the company acquires a fixed asset? a. Cost center b. Asset c. Order d. Sales order e. Project 15 Section: Account Determination 16. Which of the following document types is not utilized during the Purchasing process? a. Material documents b. Fl documents c. CO documents d. Picking document e. Invoice Section: Good Movement 17 17. A FI document includes a header and an items section. Which of the following data are included in the items section? a. Document number b. Account c. Storage location d. Document date e. Document currency Section: Goods Receipt Yes 33 18. Which of the following statements about a plant is not true? a. A plant can be assigned to more than one company code b. A company code can have more than one plant c. A plant is a key organizational element in purchasing d. A plant can be assigned to only one company code e. A plant must have at least one storage area Section: Goods Movement Diffic 18 19. Which of the following goods movements need not involve a physical movement of materials? a. Goods receipt b. Goods issue c. Stock transfer d. Transfer posting e. None of the above (all involve physical movement of materials) :d Section: Goods Movement 19 20. Which element of the requirements determination process involves creating the requisition? a. Data b. Task c. Trigger d. Outcomes e. None of the above Diffic 21 Section: Requirements Determination 21. A company can use which of the following to select a vendor from a list of potential suppliers ? a. Source list b. Company code c. Vendor master d. Material master e. None of the above 23 Section: Source of Supply Determination 22. Which element of a purchase order includes communicating with the vendor? a. Trigger b. Data c. Task d. Outcome e. None of the above Section: Order Processing 25 23. Which item is included in the header of a purchase order? a. Order quantity b. Vendor c. Delivery date d. Price e. None of the above Section: Order Processing Yes 26 24. SAP can utilize which of the following media to communicate with a vendor? a. Web services b. EDI c. Fax d. Print e. All of the above Section: Order Processing 28 25. Which of the following is(are) a form of data within the goods receipt step? a. Material ordered b. Quantity delivered c. Verification d. Storage location e. All of the above Section: Goods Receipt 31 26. Which of the following is a form of invoice verification? a. Three-way match b. Quality management c. Inspection lot d. Warehouse management e. None of the above Section: Invoice Verification 34 27. Which element of the payment step includes selecting a bank? a. Trigger b. Data c. Outcome d. Task e. None of the above Section: Payment Processing 37 28. Which of the following facilitates the integration between vendor master data and financial accounting? a. Vendor account number b. Reconciliation account c. Accounts payable number d. Material number e. Accounts receivable number Section: Payment Processing Yes 38 29. Purchasing information systems are a component of which system? a. Logistics information systems b. Business intelligence systems c. Financial information systems d. Human resource information systems 41 Yes Section: Purchasing Information Systems Processing Chapter 4 The Procurement Process True-False Questions 1. Storage locations are places within a plant were materials are kept until they are needed. Section: Storage Location 2 2. There can only be one storage location within a plant. Section: Storage Location 2 3. A storage location is a key organizational element in purchasing. Section: Storage Location 2 4. A purchasing organization is involved only in negotiating prices with vendors Diffic 3 Section: Purchasing Organization 5. Typically, there are three models of purchasing organizations: enterprise-level, companylevel, and plant-level. 4 Section: Purchasing Organization 6. The enterprise‐level purchasing organization is also known as the cross‐company code purchasing organization. 4 Section: Enterprise-Level Purchasing Organization 7. The company-level purchasing organization is the most centralized model. 4 Section: Company -Level Purchasing Organization 8. The enterprise-level purchasing organization is the most centralized model. 4 Section: Enterprise-Level Purchasing Organization 9. A plant can belong to more than one company code. 4 Section: Company-Level Purchasing Organization 10. The most decentralized model of purchasing organizations is the plant‐specific purchasing organization. 5 Section: Plant-Level Purchasing Organization 11. A purchasing group is an internal group that is responsible for executing the procurement process. Section: Purchasing Group 6 12. A purchasing organization is an individual or a group of individuals who are responsible for purchasing activities for a material or group of materials. Section: Purchasing Group 7 13. Vendor master data include the data needed to conduct business with a vendor and to execute transactions related to the procurement process. Section: Vendor Master 9 14. The method used to value material is defined in the material master. Section: Material Master 8 15. Different material types have different required material views. Section: Material Master 7 16. General data related to a vendor are accessible to all company codes in a client. Section: Vendor Master 10 17. Purchasing data related to a vendor are accessible to all purchasing organizations. Section: Vendor Master 11 18. Material master data can be defined differently for different organizational levels. Section: Vendor Master 11 19. A purchasing info record is an intersection or combination of material and accounting data. 12 Section: Purchasing Info Record 20. Accounting data related to a vendor are accessible to all clients in a company code. Section: Vendor Master 11 21. Item categories in a purchase order determine the process steps used to procure materials. Section: Item Categories 13 22. Consumable materials are acquired to be used within an organization. 14 Section: Account Determination 23. When purchasing consumable materials, an account assignment category and specific account assignment objects must be provided when the purchase order is created. 16 Section: Account Determination 24. A goods movement is not required when changing the status of material from “in quality inspection” to “unrestricted use”. Section: Goods Movement Diffic 17 25. A plant-to-plant movement of goods does not generate an accounting document. Section: Goods Movement 18 26. A goods receipt cannot be accomplished without a movement type. Section: Goods Movement 18 27. A stock transfer does not involve a change in storage location. Section: Goods Movement Diffic 18 28. A transfer posting changes the stock status of a material and need not involve a physical movement of goods. Section: Goods Movement 19 29. A goods movement is a transaction that causes a change in stock value or status. Section: Goods Movement 17 30. Materials cannot be moved from one company code to another because each company code uses a different set of books. Section: Goods Movement Diffic 18 31. A transfer posting is used to move materials from one storage location to another. Section: Goods Movement 19 32. A transfer posting does not generate a material document. Section: Goods Movement 19 33. Requirements for materials must be created manually. Diffic 21 Section: Requirement Determination 34. The data needed to create a purchase requisition are the item category, quantity, desired delivery date, and desired delivery location or receiving plant. 22 Section: Requirement Determination 35. A requisition represents a legal obligation to make the purchase. 22 Section: Requirement Determination 36. The header section of a purchase order contains information such as purchase order number, vendor, currency, dates, and payment terms. Section: Order Processing 26 37. The primary task of the order processing step is to create and send the purchase order to the vendor. Section: Order Processing 27 38. SAP cannot utilize any media except Web services to communicate a purchase order to a vendor. Section: Order Processing 28 39. Materials ordered in multiple purchase orders must be delivered in multiple shipments. Section: Goods Receipt 29 40. The material master is updated after the invoice verification step of the procurement process has been completed. Section: Invoice Verification 36 41. The material master is updated after the goods receipt step of the procurement process has been completed. Section: Goods Receipt Diffic 32 42. Tolerances for price variations among purchase orders, invoices, and goods receipts are allowed, but tolerances for quantity variances are not. Section: Invoice Verification Diffic 33 43. Invoice verification authorizes payment of the invoice to the vendor. Section: Invoice Verification 36 44. Payments must be made automatically through a payment program. Section: Payment Processing 37 45. Electronic payments are sent automatically. Section: Payment Processing 38 46. Work lists display lists of master data and documents that are generated during the execution of a process. Section: Work Lists Diffic 41 [Show More]

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