Professional Documents
Culture Documents
Ais
Ais
TRUE/FALSE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
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20.
21.
22.
MULTIPLE CHOICE
1. Which of the following is not a business
resource?
a. raw material
b. Labor
c. information
d. all are business resources
ANS: D
2. Which level of management is responsible
for short-term planning and coordination
of activities necessary to accomplish
organizational objectives?
a. operations management
b. middle management
c. top management
d. line management
ANS: B
3. Which level of management is responsible
for controlling day-to-day operations?
a.
b.
c.
d.
top management
middle management
operations management
executive management
ANS: C
4. The ability to achieve the goals of a
system depends upon the effective
functioning and harmonious interaction
between its subsystems. This is called
a. system decomposition
b. system redundancy
c. backup system
d. subsystem interdependency
ANS: D
5. The value of information for users is
determined by all of the following but
a. reliability
b. relevance
c. convenience
d. completeness
ANS: C
6. An example of a nonfinancial transaction
is
a. sale of products
b. cash disbursement
c. log of customer calls
d. purchase of inventory
ANS: C
7. An example of a financial transaction is
a. the purchase of computer
b. a suppliers price list
c. a delivery schedule
d. an employee benefit brochure
ANS: A
8. Which subsystem is not part of the
Accounting Information System?
a. Transaction Processing System
b. Expert System
c. General Ledger/Financial Reporting System
d. Management Reporting System
ANS: B
ANS: D
11. The Transaction Processing System
includes all of the following cycles except
a. the revenue cycle
b. the administrative cycle
c. the expenditure cycle
d. the conversion cycle
ANS: B
12. The primary input to the Transaction
Processing System is
a. a financial transaction
b. an accounting record
c. an accounting report
d. a nonfinancial transaction
ANS: A
13. When designing the data collection
activity, which type of data should be
avoided?
a. data that is relevant
b. data that is efficient
c. data that is redundant
d. data that is accurate
ANS: C
The most basic element of useful data in
the database is
a. the record
b. the key
c. the file
d. the attribute
ANS: D
In a database, a complete set of attributes
for a single occurrence of an entity class is
called
a. a key
b. a file
c. a record
d. a character
a.
b.
c.
d.
relevance
completeness
summarization
structure
ANS: D
17. Database management tasks do not
include
a. Summarization
b. Storage
c. Retrieval
d. Deletion
ANS: A
ANS: B
ANS: A
28. Which individual is least involved in new
systems development?
a. systems analyst
b. external auditor
c. end user
d. data librarian
ANS: C
34. Advantages of distributed data processing
include each of the following except
a. cost reductions
b. better management of organization resources
c. improved operational efficiency
d. increased user satisfaction
ANS: D
ANS: B
a. system users
b. system designers
c. system auditors
d. system converters
ANS: D
MULTIPLE CHOICE
1. Which system is not part of the expenditure
cycle?
a. cash disbursements
b. Payroll
c. production planning/control
d. purchases/accounts payable
ANS: C
2. Which system produces information used for
inventory valuation, budgeting, cost control,
performance reporting, and make-buy
decisions?
a. sales order processing
b. purchases/accounts payable
c. cash disbursements
d. cost accounting
ANS: D
3. Which of the following is a turn-around
document?
a. remittance advice
b. sales order
c. purchase order
d. payroll check
ANS: A
4. The order of the entries made in the ledger is
by
a. transaction number
b. account number
c. Date
d. User
ANS: B
5. The order of the entries made in the general
journal is by
a. Date
b. account number
c. User
d. customer number
ANS: A
6. In general a special journal would not be used
to record
a. sales
b. cash disbursements
c. depreciation
d. purchases
ANS: C
7. Which account is least likely to have a
subsidiary ledger?
a. sales
b. accounts receivable
c. fixed assets
d. inventory
ANS: A
8. Subsidiary ledgers are used in manual
accounting environments. What file is
comparable to a subsidiary ledger in a
computerized environment?
a. archive file
b. reference file
c. transaction file
d. master file
ANS: D
9. A journal is used in manual accounting
environments. What file is comparable to a
journal in a computerized environment?
a. archive file
b. reference file
c. transaction file
d. master file
ANS: C
10. In a computerized environment, a list of
authorized suppliers would be found in the
a. master file
b. transaction file
c. reference file
d. archive file
ANS: C
11. Which of the following is an archive file?
a. an accounts payable subsidiary ledger
b. a cash receipts file
c. a sales journal
d. a file of accounts receivable that have been written
off
ANS: D
12. Which document is not a type of source
document?
a. a sales order
process
d. balancing the trade off between batch size
and error detection
ANS: C
ANS: B
ANS: D
22. Which step is not found in batch processing
using sequential files?
a. control totals
b. sort runs
c. edit runs
d. immediate feedback of data entry errors
b.
ANS: D
23. Both the revenue and the expenditure cycle can
be viewed as having two key parts. These are
a. manual and computerized
b. physical and financial
c. input and output
d. batch and real-time
c.
d.
ANS: B
24. All of the following can provide evidence of an
economic event except
a. source document
b. turn-around document
c. master document
d. product document
ANS: C
ANS: D
28. Which symbol represents accounting records?
a.
b.
b.
c.
ANS: A
29. Which symbol represents a document?
a.
b.
d.
c.
ANS: B
d.
27. Which symbol represents a manual operation?
a.
ANS: B
b.
c.
d.
ANS: D
31. Which symbol represents a decision?
a.
b.
c.
d.
ANS: A
32. The characteristics that distinguish between
batch and real-time systems include all of the
following except
a. time frame
b. resources used
c. file format
d. efficiency of processing
ANS: C
ANS: B
39. Operational efficiencies can be improved by
a. updating accounts both common and unique to
many concurrent transactions in real time.
b. updating accounts both common and unique to
many concurrent transactions in batch mode.
c. updating accounts unique to many concurrent
transactions in real time and updating common
accounts in batch mode.
d. None of the above are true statements
ANS: C
MULTIPLE CHOICE
1.Which ethical principle states that the benefit
from a decision must outweigh the risks,
and that there is no alternative decision
that provides the same or greater benefit
with less risk?
a. minimize risk
b. Justice
c. informed consent
d. Proportionality
ANS: D
2. Individuals who acquire some level of
skill and knowledge in the field of
computer ethics are involved in which
level of computer ethics?
a. para computer ethics
b. pop computer ethics
c. theoretical computer ethics
d. practical computer ethics
ANS: A
3. All of the following are issues of
computer security except
a. releasing incorrect data to authorized
individuals
b. permitting computer operators unlimited
access to the computer room
c. permitting access to data by unauthorized
individuals
d. providing correct data to unauthorized
individuals
ANS: B
ANS: A
6. One characteristic of employee fraud is
that the fraud
a. is perpetrated at a level to which internal
controls do not apply
b. involves misstating financial statements
c. involves the direct conversion of cash or
other assets to the employees personal
benefit
d. involves misappropriating assets in a series
of complex transactions involving third
parties
ANS: C
7. Forces which may permit fraud to occur
do not include
a. a gambling addiction
b. lack of segregation of duties
c. centralized decision making environment
d. questionable integrity of employees
ANS: C
8. Which of the following best describes
lapping?
a. applying cash receipts to a different customers
account in an attempt to conceal previous thefts
of funds
b. inflating bank balances by transferring money
among different bank accounts
c. expensing an asset that has been stolen
d. creating a false transaction
ANS: A
ANS: C
14. Which of the following is a preventive
control?
a. credit check before approving a sale on account 20. Which of the following suggests a
b. bank reconciliation
weakness in the internal control
c. physical inventory count
environment?
d. comparing the accounts receivable subsidiary ledger to the
a. control
the firm
account
has an up-to-date organizational
chart
ANS: A
b. monthly reports comparing actual
performance to budget are distributed to
15. A well-designed purchase order is an
managers
example of a
c. performance evaluations are prepared
a. preventive control
every three years
b. detective control
d. the audit committee meets quarterly with
c. corrective control
the external auditors
d. none of the above
ANS: C
ANS: A
ANS: B
26. The decision to extend credit beyond the
normal credit limit is an example of
a. independent verification
b. authorization
c. segregation of functions
d. supervision
ANS: B
27. When duties cannot be segregated, the
most important internal control procedure
is
a. supervision
b. independent verification
c. access controls
d. accounting records
ANS: A
28. An accounting system that maintains an
adequate audit trail is implementing which
internal control procedure?
a. access controls
b. segregation of functions
c. independent verification
d. accounting records
ANS: D
29. Employee fraud involves three steps. Of
the following, which is not involved?
a. concealing the crime to avoid detection
b. stealing something of value
c. misstating financial statements
d. converting the asset to a usable form
ANS: C
30. Which of the following is not an example
of independent verification?
a. comparing fixed assets on hand to the
accounting records
b. performing a bank reconciliation
c. comparing the accounts payable
subsidiary ledger to the control account
d. permitting authorized users only to access
the accounting system
ANS: D
31. The importance to the accounting
profession of the Foreign Corrupt
Practices Act of 1977 is that
ANS: B
ANS: B
ANS: B
control
d. three subsystemssales order processing,
credit authorization, and cash receipts
ANS: B
a.
b.
c.
d.
ANS: A
2. The reconciliation that occurs in the
shipping department is intended to ensure
that
a. credit has been approved
b. the customer is billed for the exact quantity
shipped
c. the goods shipped match the goods ordered
d. inventory records are reduced for the goods
shipped
ANS: C
3. The adjustment to accounting records to
reflect the decrease in inventory due to a
sale occurs in the
a. warehouse
b. shipping department
c. billing department
d. inventory control department
ANS: D
4. Which document triggers the revenue
cycle?
a. the sales order
b. the customer purchase order
c. the sales invoice
d. the journal voucher
ANS: B
5. Copies of the sales order can be used for
all of the following except
a. purchase order
b. credit authorization
c. shipping notice
d. packing slip
ANS: A
6. The purpose of the sales invoice is to
a. record reduction of inventory
b. transfer goods from seller to shipper
c. bill the customer
d. select items from inventory for shipment
ANS: C
7. The customer open order file is used to
b. quantities to be sold
c. payment terms
d. person to authorize transactions
ANS: D
28. A cash prelist is
a. a document that records sales returns and
allowances
b. a document returned by customers with their
payments
c. the source of information used to prepare
monthly statements
d. none of the above
ANS: D
29. An advantage of real-time processing of
sales is
a. the cash cycle is lengthened
b. current inventory information is available
c. hard copy documents provide a permanent
record of the transaction
d. data entry errors are corrected at the end of
each batch
ANS: B
intervention
d. data are easily accessible
ANS: A
33. Which journal is not used in the revenue
cycle?
a. cash receipts journal
b. sales journal
c. purchases journal
d. general journal
ANS: C
34. Periodically, the general ledger
department receives all of the following
except
a. total increases to accounts receivable
b. total of all sales backorders
c. total of all sales
d. total decreases in inventory
ANS: C
37. The revenue cycle utilizes all of the
following files except
a. credit memo file
b. sales history file
c. shipping report file
d. cost data reference file
ANS: D
38. All of the following are advantages of
real-time processing of sales except
a. The cash cycle is shortened
b. Paper work is reduced
c. Incorrect data entry is difficult to detect
d. Up-to-date information can provide a
competitive advantage in the marketplace
ANS: C
ANS: B
35. The credit department
a. prepares credit memos when goods are
returned
b. approves credits to accounts receivable when
payments are received
c. authorizes the granting of credit to customers
d. none of the above
ANS: C
36. Adjustments to accounts receivable for
payments received from customers is
based upon
a. the customers check
b. the cash prelist
c. the remittance advice that accompanies payment
d. a memo prepared in the mailroom
5. The accounts payable department reconciles the accounts payable subsidiary ledger to the control
account.
6. The use of inventory reorder points suggests the need to obtain specific authorization.
7. Proper segregation of duties requires that the responsibility approving a payment be separated from
posting to the cash disbursements journal.
8. A major risk exposure in the expenditure cycle is that accounts payable may be overstated at the end of
the accounting year.
9. When a trading partner agreement is in place, the traditional three way match may be eliminated.
10. Authorization of purchases in a merchandising firm occurs in the inventory control department.
11. A three way match involves a purchase order, a purchase requisition, and an invoice.
12. Authorization for a cash disbursement occurs in the cash disbursement department upon receipt of the
suppliers invoice.
13. An automated cash disbursements system can yield better cash management since payments are made
on time.
14. Permitting warehouse staff to maintain the only inventory records violates separation of duties.
15. A purchasing system that employs electronic data interchange does not use a purchase order.
16. Inventory control should be located in the warehouse.
17. Inspection of shipments in the receiving department would be improved if the documentation showed
the value of the inventory.
18. One reason for authorizing purchases is to enable efficient inventory management.
19. If accounts payable receives an invoice directly from the supplier it needs to be reconciled with the
purchase order and receiving report.
20. Supervision in receiving is intended to reduce the theft of assets.
d. general ledger
MULTIPLE CHOICE
1. The purpose of the purchase requisition is
to
a. order goods from vendors
b. record receipt of goods from vendors
c. authorize the purchasing department to order
goods
d. bill for goods delivered
ANS: D
4. The purpose of the purchase order is to
a. order goods from vendors
b. record receipt of goods from vendors
c. authorize the purchasing department to order
goods
d. approve payment for goods received
ANS: A
ANS: C
2. The purpose of the receiving report is to
a. order goods from vendors
b. record receipt of goods from vendors
c. authorize the purchasing department to order
goods
d. bill for goods delivered
ANS: B
Chapter 6The Expenditure Cycle Part II: Payroll Processing and Fixed Asset
Procedures
TRUE/FALSE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Time cards are used by cost accounting to allocate direct labor charges to work in process.
The personnel department authorizes changes in employee pay rates.
Most payroll systems for mid-size firms use real-time data processing.
To improve internal control, paychecks should be distributed by the employee's supervisor.
Employee paychecks should be drawn against a special checking account.
Because a time clock is used, no supervision is required when employees enter and leave the work
place.
Inventory control performs the formal record keeping function for fixed assets.
The depreciation schedule shows when assets are fully depreciated.
Authorization to dispose of fixed assets should be issued by the user of the asset.
Work-in-process records are updated by payroll personnel.
Ideally, payroll checks are written on a special bank account used only for payroll.
The supervisor is the best person to determine the existence of a phantom employee and should
distribute paychecks.
Payroll processing can be automated easily because accounting for payroll is very simple.
Timekeeping is part of the personnel function.
Fixed asset accounting systems include cost allocation and matching procedures that are not part of
routine expenditure systems.
Asset maintenance involves only the recording of depreciation charges. Physical improvements are
always expensed.
Fixed Asset Systems must keep track of the physical location of each asset to promote accountability.
Time cards capture the total time an individual worker spends on each production job.
Accounting conventions and IRS rules sometime specify the depreciation parameters to be used.
The fixed asset disposal report authorizes the user department to dispose of a fixed asset.
MULTIPLE CHOICE
1. The document that captures the total
amount of time that individual workers
spend on each production job is called a
a. time card
b. job ticket
c. personnel action form
d. labor distribution form
ANS: B
2. An important reconciliation in the payroll
system is
a. general ledger compares the labor
distribution summary from cost accounting
to the disbursement voucher from accounts
payable
b. personnel compares the number of
employees authorized to receive a paycheck
to the number of paychecks prepared
c. production compares the number of hours
reported on job tickets to the number of
hours reported on time cards
d. payroll compares the labor distribution
summary to the hours reported on time
cards
ANS: A
3. Which internal control is not an important
part of the payroll system?
a. Supervisors verify the accuracy of
employee time cards.
b. Paychecks are distributed by an
independent paymaster.
ANS: C
ANS: B
13. In a manufacturing firm, employees use
time cards and job tickets. Which of the
following statements is not correct?
a. Job tickets are prepared by employees for
each job worked on, so an employee may