Introduction To Business Processes: True-False Questions

Chapter 1
Introduction to Business Processes
True-False Questions
1. The most common organizational structure within modern organizations is the functional
structure.
Answer: True Difficulty: Easy Page Reference: 1

Section: The Functional Organizational Structure Practice:
2. Losing sight of the big picture is commonly referred to as the silo effect.
Answer: True Difficulty: Medium Page Reference: 2

Section: The Functional Organizational Structure: The Silo Effect Practice:
3. Systems that support end-to-end processes are called business processes.
Answer: False Difficulty: Medium Page Reference: 4

Section: Business Processes Practice:
4. An enterprise system is a set of tasks or activities that produce desired outcomes.
Answer: False Difficulty: Easy Page Reference: 2

Section: The Functional Organizational Structure: Enterprise Systems Practice:
5. Without the various steps of the business process, a company can’t successfully bill
customers and ship products.

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.

7. The material planning process is used to maintain internal assets such as machinery and to
delivery after-sales customer services such as repairs.

8. The fulfillment process (sell) consists of all the steps involved in selling and delivering the
products to the organization’s customers.

9. The financial accounting process focuses on internal reporting to manage costs and revenues.
Answer: False Difficulty: Difficult Page Reference: 6

10. The procurement process includes all of the tasks involved in acquiring needed materials.

Section: Business Processes: Procurement-Buy Practice:
11. Within the production process, the issuing of raw materials takes place in the warehouse.
Answer: True Difficulty: Difficult Page Reference: 7

Section: Business Processes: Procurement-Make Practice:
12. Materials encompass all the products, components, and parts that are used in an organization.

Section: Business Processes: Material Planning-Plan Practice:
13. Lead time is the time between placing the order and receiving confirmation that the item has
been shipped.

14. The purpose of material planning is to match supply with demand.

15. Insufficient supply results in a situation called “stock out.”

16. Excess supply will result in lower inventory costs because the company is eligible for a bulk
rate.
Answer: False Difficulty: Difficult Page Reference: 8

17. Forecasts of finished goods are determined by data from material planning.
18. Large warehouses do not need to move items as quickly and efficiently as smaller
warehouses.

Section: Business Processes: Inventory and Warehouse Management-Store Practice:
19. Asset management is concerned with both the preventive and the corrective maintenance of
an organization’s equipment.

Section: Business Processes: Asset Management and Customer Service-Service Practice:
20. Document management provides tools to manage and store documents securely and to keep
track of the multiple versions of these documents.

Section: Business Processes: Lifecycle Data Management-Design Practice:
21. The final stage of asset management and customer service is the authorization maintenance
stage.

22. The final stage of the customer service process is the settlement stage.

23. A project is permanent in nature and is typically associated with smaller, simpler projects.

Section: Business Processes: Project Management-Projects Practice:
24. During the planning phase of a project the scope of the project is defined and the milestones
and deadlines are established.

25. Projects rely on resources located in and work performed in other processes.

26. Common reports of financial accounting include income statement, profit and loss, and
balance sheet.
Section: Business Processes: Financial Accounting-Track for External Reporting
Practice:
27. Accounts payable is used to track money owed by customers.

Practice:
28. Asset accounting is concerned with tracking financial data related to assets such as
machinery and cars.

Practice:
29. Accounts receivable is used to track money that is owed to vendors.

Practice:
30. Management accounting helps an organization track costs and revenues to assess its
profitability

Section: Business Processes: Management Accounting-Track for Internal Reporting
Practice:

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Chapter 1

Introduction to Business Processes

Answer: True Difficulty: Easy Page Reference: 1

Answer: True Difficulty: Medium Page Reference: 2

3. Systems that support end-to-end processes are called business processes.

Answer: False Difficulty: Medium Page Reference: 4

4. An enterprise system is a set of tasks or activities that produce desired outcomes.

Answer: False Difficulty: Easy Page Reference: 2

Answer: True Difficulty: Medium Page Reference: 4

Answer: True Difficulty: Medium Page Reference: 5

Answer: False Difficulty: Medium Page Reference: 5

Answer: True Difficulty: Medium Page Reference: 5

Answer: False Difficulty: Difficult Page Reference: 6

Answer: True Difficulty: Medium Page Reference: 6

Answer: True Difficulty: Difficult Page Reference: 7

Answer: True Difficulty: Medium Page Reference: 8

Answer: False Difficulty: Easy Page Reference: 8

14. The purpose of material planning is to match supply with demand.

Answer: True Difficulty: Medium Page Reference: 8

15. Insufficient supply results in a situation called “stock out.”

Answer: True Difficulty: Medium Page Reference: 8

Answer: False Difficulty: Difficult Page Reference: 8

Answer: False Difficulty: Medium Page Reference: 9

Answer: True Difficulty: Medium Page Reference: 10

Answer: True Difficulty: Easy Page Reference: 10

Answer: False Difficulty: Medium Page Reference: 11

Answer: True Difficulty: Easy Page Reference: 11

Answer: False Difficulty: Medium Page Reference: 11

Answer: True Difficulty: Easy Page Reference: 12

Answer: True Difficulty: Medium Page Reference: 12

27. Accounts payable is used to track money owed by customers.

Answer: False Difficulty: Easy Page Reference: 13

Answer: True Difficulty: Medium Page Reference: 13

29. Accounts receivable is used to track money that is owed to vendors.

Answer: False Difficulty: Easy Page Reference: 13

Answer: True Difficulty: Medium Page Reference: 13

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