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Test answers for ERP Test 2020

(7 / 53, CL) Last updated: March 12
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7 Answered Test Questions:

1. Who should be the ultimate owner of the ERP system in an organization?


• The human resources department

• The payroll department

• The information technology department

• The accounting department

2. How does the ERP system know which general ledger accounts to credit and debit based on the type of entry made into the system?


• They are predetermined by the ERP software vendor and companies must adopt their GL structure.

• All entries go into a suspense account that an accountant must code correctly at month end.

• All possibilities for entry are mapped to specific codes during the implementation phase.

• Each user must be trained in general ledger coding conventions and manually enter them for each transaction.

3. How long does it take to implement a mid-tier ERP system on an average?


• 1 week

• 1 month

• Several months

• 2 years

4. How can a company receive help in choosing between several systems without detailed knowledge of them?


• By utilizing the services of the ERP consultants who also act as third-party resellers and can help companies choose between several options

• By taking the sales people's advice when listening to their presentation

• By nominating an employee to learn everything possible and make a selection

• By Using the lowest cost possible as the deciding factor

5. How do switching costs affect a company once an ERP system is implemented?


• It is easy to switch over from one ERP system to a different one as implementation costs are low.

• Once employees learn one ERP system, they can use any ERP system; so switching costs are low.

• They are prohibitive and make it difficult to change to a different system frequently.

• It is expensive to maintain ERP systems; so switching over to a lower tier system is beneficial.

6. Why is ERP software typically more expensive as compared with individual software products?


• The ERP system enjoys a monopoly which leads the prices to be fixed at a high level.

• It includes several modules which companies do not need but have to pay for.

• The support feature of the software is more than what is offered by individual software vendors.

• The software essentially contains several individual software packages all at once, and the price also includes the cost of the time spent by the consultants to implement the software.

7. How do end users of the ERP software learn how to navigate and utilize the software?


• Through training conducted by the software expert for the employees department

• Through training offered by the ERP software vendor

• Through online training and documentation

• All of the above

53 NOT Answered Yet Test Questions:

(hold on, will be updated soon)
8. What is a data warehouse?


• The physical location where the company's servers are stored

• A server which only the ERP system can access

• A repository of the company's data from all of the company's systems to facilitate reporting and analysis

• The server where the ERP software is hosted

9. Why does having all employees of a company use the same ERP system, enhance the efficiency of the business?


• Having all employees on one system allows for faster system response.

• All the employees can duplicate data entries in the same system.

• Everyone is utilizing the same data and can view it in real time.

• The management can create their own reports and reduce the burden on the staff.

10. What feature of an ERP system would a manufacturing company require that a financial services company would not?


• Job costing

• Human resources

• Customer relationship management

• Financial reporting

11. Why would a busy retail chain with multiple locations and a head office choose a high-tier ERP system?


• They are looking for a lower cost solution.

• They need fewer user's licenses.

• The ERP system will be run only at the head office with no store interface.

• Their needs require that multiple users and locations should be able to use the system simultaneously with no latency.

12. Why is there often resistance from employees to adopting a new ERP system?


• They do not receive any of the benefits of the new system, but have to learn it.

• They do not want the company to spend money on a new system.

• They prefer to work harder and longer hours.

• They feel it creates an unfair advantage over competitors.

13. Why would user desktops need to be upgraded in order to use the ERP system?


• The ERP system reseller often includes desktop upgrades as a mandatory clause in the software contract.

• It will be able to handle future upgrades to the system several years later.

• Employees will be expected to work extra hard once the new system is in place.

• To run additional third party software.

14. What data from the human resource module can be used by the payroll module in order to reduce duplicate entries?


• Wage rates

• Payroll tax percentages

• Employee names and addresses

• Overtime calculations

15. What is meant by "extensions" to the ERP system which need to be implemented?


• Adding additional modules

• Third party software which integrates with the software and data capture devices such as scanners

• Deploying the software to offices outside of the home office

• Buying additional seats for users that need to be set up during implementation

16. What is involved in the "data migration" process of implementation?


• Identifying what data is to be migrated to the new system and establishing a clear cut off

• Creating a copy of the data and moving it to the server the ERP system will exist on

• Manually entering all the previous data into the new system

• Identifying which data is the most important to migrate and deleting all other past data

17. Why would a web-based software be chosen over a desktop system?


• It is faster in general than desktop systems.

• It is best suited for companies where all employees are in one location.

• The per seat license fee is typically much lower.

• It can be hosted online and mitigates the company's need to purchase several hardware upgrades to support the new system.

18. What are the four general steps in an implementation plan?


• Designing, Training, Testing, Phasing Out

• Configuration, Documentation, Testing, Training

• Project Design, Documentation, Training, Phasing Out

• Testing, Training, Implementation, Configuration

19. Which of the following is a disadvantage of the web based ERP software?


• It can be accessed anywhere without special desktop software.

• If a company loses an internet connection, they will have no access.

• There is no real time data reporting available.

• The cost is usually lower than that of a desktop solution of equal ability.

20. Which of the following is a way to create increased security in the ERP system against employee tampering of data?


• Allow employees access to all modules to create an open environment

• Limit the number of employees with access to ten or fewer

• Allow employees access only to the modules and functions they need for their specific jobs

• Create a strict audit routine where the management regularly audits employee transactions

21. Which of the following is not a typical module of an ERP system?


• General accounting

• Software development

• Customer relationship management

• Human resources

22. What does the abbreviation "ERP" represent?


• Enterprise Resource Performance

• Expert Representative Planning

• Expert Representation Performance

• Enterprise Resource Planning

23. What additional costs besides the cost of the software need to be considered while selecting the ERP software?


• Offsite server costs

• The cost of infrastructure upgrades needed, of training and documentation, and of the upgrades to other software needed

• The cost of the additional staff needed to run the system on the backend

• Replacement costs of the system in future

24. How is data transferred between user terminals and the data warehouse?


• Over phone lines

• Through network cabling

• Through wireless

• All of the above

25. How does the manufacturing process module impact the accounting module?


• Head count from the manufacturing department affect accounting allocations.

• Employee wages of the manufacturing employees are posted to the general ledger.

• As an item is produced and moves through the manufacturing process, direct and indirect costs impact the general ledger.

• Financial reports need to be created in order to facilitate the manufacturing department.

26. What do transaction identification numbers allow to be done?


• To time stamp transactions.

• To specifically identify who performed an entry or transaction in the ERP system, and all consequences related to it.

• To show the general ledger coding of a transaction.

27. Which module of the ERP system is typically the driving force for switching away from the legacy systems in search of better functionality?


• The human resources module

• The information technology module

• The accounting module

• The payroll module

28. What reason would a company have for disallowing the ERP desktop to all users and instead require them to use a virtual private network to access the system?


• It allows for updates to be installed in one central location.

• Local software will typically run faster than the software accessed over a VPN.

• Lower processing power is needed on users desktops.

• It enables the IT department to trouble shoot more effectively.

29. What are the best practices related to ERP software design?


• ERP software should be designed primarily with manufacturing in mind.

• ERP modules should be independent and not interrelated.

• Users should all be restricted to one module.

• ERP software is designed with general and often adopted rules of business in order to meet most customers' needs before customization.

30. What is the most efficient way for the employees to access the ERP desktop client without having it installed on their local machines?


• By using a virtual private network to log in remotely to the server the ERP system is installed on

• By using web portal directly linked to the ERP

• By physically going to the IT department to use a terminal linked to the ERP system

• By creating their system entries in Excel and uploading them to the ERP system

31. What information from the payroll module should never be shared with the other modules and departments?


• Names of the employees

• Wage rates for the employees

• Total count of all the employees

• The current payroll tax rate

32. What is the purpose of mapping business processes prior to implementation?


• It allows for lower costs in implementation.

• It helps with the selection of the ERP software.

• It allows the implementation team to understand the flow of data.

33. Why should end users be involved in system demonstrations and selection?


• Their time is cheaper than that of the high paid consultants.

• It is better to give them the ultimate decision making power.

• There is no reason to get end user feedback if they are involved in making the decision.

• They will have valuable feedback apart from the cost and technical perspective.

34. Why would an accounting employee need access to the manufacturing module?


• To get the head count of manufacturing employees

• To determine the current payroll tax rate

• To get the list of employees

• To look at specific financial data related to work orders

35. What part of the IT infrastructure typically needs to be upgraded in order to facilitate the use of an ERP system?


• Desktops

• Cabling

• Servers

• Backup drives

36. Why is an ERP system not suitable for all companies?


• It is more efficient to use several individual software packages.

• Employees have a difficult time switching over to the new system.

• It has some short term disadvantages even though long term benefits outweigh them.

• It can be expensive and provides more functionality than is needed by smaller companies.

37. What is one of the main reasons which prevents an ERP system implementation from being successful?


• Poor or no mapping of current business processes

• Lack of management support

• Inadequate budget

• Lack of employee training manuals

38. Who from the IT department in an organization should be responsible for maintaining the ERP system?


• A devoted employee who is an ERP system expert

• The Chief Technology Officer

• A college intern

• A data warehouse expert

39. Why are third party consultants usually employed to help with the implementation process?


• The costs of the consultants can be capitalized to the project instead of expensed.

• The implementation is beyond the scope of most company employees.

• It is required as part of the software purchase contract.

• They provide in-depth knowledge on the software and implementation process, which are seldom the employees skills.

40. What is the term used for the past software which is typically replaced by an ERP system?


• Old software

• Integrated software

• Legacy software

• Prior version software

41. Which of the following is typically not a unique module?


• Accounting

• Customer relationship management

• Accounts payable

• Purchasing

42. What is the main task involved in the configuration stage?


• Determining which users have what security rights

• Designing and customizing the system to do what the company needs within the confines of the system's abilities

• Setting up tables in the data warehouse

• Report designing

43. What is the decision which must be made during the Inventory module implementation and will have long lasting effects on the company?


• Choice of the inventory accounting methodology such as FIFO or LIFO

• What suppliers will be used to purchase inventory from

• What the bill of materials is for all items produced

• Who will be the primary employee responsible for maintaining the inventory module

44. Why does "out of the box" ERP software typically need customization before it is useful?


• It will not work at all without customization.

• The software is usually built with a manufacturing company in mind.

• The modules need to be purchased separately and then woven together.

• The software is complex and built to fit the needs of companies from all industries with the expectation that it will be tailored for the specific customers.

45. Why can the interconnected nature of data between different departments in an ERP system be a disadvantage?


• It facilitates the flow of information.

• It reduces input error since data can be used by several departments.

• Employees in one department do not want to share information with others and resist utilizing the full functionality of the system.

• It reduces the flow of information between departments.

46. Why is it important to have a project team dedicated to an ERP system implementation?


• Only certain employees should know how the system works.

• The costs of the employees' time can be capitalized.

• It keeps the otherwise idle employees busy.

• It is a several month long project which requires the input and coordination of all departments.

47. What advantage does a data warehouse have over using multiple databases?


• It allows the ERP system to read and write data faster by using a central location.

• It allows the use of a web based ERP system.

• The ERP system is typically hosted on the data warehouse along with the actual data.

• It costs less than using the existing company servers as data sources.

48. Why is it important to factor in future growth into IT decisions made in the present?


• You can choose the lowest cost alternative and learn how to create work arounds to facilitate the growth.

• It will be more cost effective to implement all upgrades that will handle future growth simultaneously.

• You can purchase expensive and overpowered equipment for use now and state that it is for future growth.

• The ERP system will typically be replaced every 3-5 years; so future planning is essential.

49. What does the newest "ERP 2" software offer that original ERP systems did not?


• The ability for multiple users to be simultaneously logged in

• Web access and the ability of vendors, customers and suppliers to log in from the internet

• Ability for modules to interact with each other

• Time stamping of transactions

50. Why would a company choose a system which is larger in nature than the company's current needs?


• It is cheaper to buy a larger and more complex system.

• The company anticipates growth and will grow into the functionality of the system.

• It is easier to implement a larger software system.

• There are more consultants familiar with the larger systems.

51. Which of the following is an advantage of having centralized data in an ERP system?


• It enables the users not to share data with other departments.

• It creates additional work for the employees by way of coordinating their data.

• It eliminates the need to enter information into multiple systems.

• It enables the employees to view the payroll module and see what other people are earning.

52. Which of the following factors should be considered in the ERP system selection?


• The employee sophistication

• The company hiring policy

• Both the current and the future needs of the company

• The lowest cost system available

53. What level of detail can a person using an ERP system view profitability, assuming the system has been set up to facilitate reporting on the most detailed level?


• By cost center

• By product line

• Only at the profit & loss statement, companywide level

• At a granular level, for a specific item

54. Why is the security measure of not allowing the deletion of information sometimes a disadvantage?


• Employees can not cover up mistakes they make.

• The management can see what errors are being frequently made and help employees learn to avoid them.

• A mistake can be traced back to a specific entry and employee.

• Employees create "work arounds" to fix problems when their access is limited, which often causes more problems if they do not understand the full impact of what they are doing.

55. Why do many companies utilize third-party software to do financial reporting instead of using the ERP system built-in capabilities?


• ERP systems do not come with any financial reporting ability.

• Traditionally the built in reporting abilities have been weak and not flexible and do not meet the requirements of the companies.

• Companies do not understand how to use the ERP financial reporting.

• The third party software is an inexpensive alternative.

56. Why would employees in the accounting department not be allowed to access the payroll module?


• So that they may not be able to see sensitive data. They need only to see the accounting impact of the payroll which they can see through the accounting module

• So that they may not be able to determine how many employees work for the company

• So that they may not be able to see what the current payroll tax percentages are

• So that they may not be able to get a copy of the company organization chart

57. What would be considered a mid-tier ERP system?


• One which has functionality beyond simple accounting and business practices, but not adequate enough to handle international transactions, multiple locations, complex transactions and several users at one point in time

• A simple system which handles only accounting and payroll functions

• A system which can be deployed worldwide to multiple locations and handle multiple simultaneous users, and is suitable for large scale retail chains

• One which is neither too costly nor too cheap

58. What must an ERP software package do in order to be classified as ERP software?


• It must handle the Human Resource function.

• It must provide the functions of at least two separate systems and integrate them.

• It must support dynamic reporting functions.

• It must allow the user greater functionality than the legacy software.

59. Why should the ERP systems from vendors from other countries be evaluated with caution?


• They typically cost more than the domestic software.

• There are laws in place about using international software.

• Every country uses different accounting rules.

• There may be currency, grammar, and business practices which differ in the software vendors' companies which will be difficult to work with.

60. Which of the following modules should never have a financial impact on the accounting module?


• Manufacturing

• Purchasing

• Human resources

• Payroll