Multiple-Choice Questions

1. Sequential access means that

c. to read any record on the file, all of the preceding records must first be read.

2. Which file has as its primary purpose to provide historical financial data for comparative
financial reports?
d. general ledger history file

3. Which of the following statements is true?

c. journal vouchers summarizing transaction activity from various operational
departments into GLS, where they are independently reconciled and posted to the
general ledger accounts.

4. Which of the following statements best describes a computer-based GL/FRS?

a. most firms derive little additional benefit from a real-time FRS.

5. Which of the following is NOT a potential exposure of the FRS?

c. unauthorized access to the check register

6. Which task should the general ledger perform?

a. update the general ledger

7. The Ozment Corporation uses a performance reporting system that shows online the data
for each subordinate who reports to a supervisor. The data presented show the actual
costs incurred during the period, the budgeted costs, and all variances from the budget of
that subordinate’s department. The name of this system of reporting is
b. responsibility accounting

8. Which of the following is not a characteristic of the strategic planning process?

a. emphasis on both the short and long run

9. The following are all output reports of the financial reporting system, EXCEPT
b. tax return

10. Which of the following budgeting processes is LEAST likely to motivate managers
toward organizational goals?
e. having top management set budget levels

11. Which of the following would normally be considered in a strategic plan?

b. maintaining the image of the company as the industry leader
12. At what level of management are the long-range planning functions most important?
a. at top management levels

13. Which of the following is the basic purpose of a responsibility accounting?

b. motivation

14. Which statement below best describes a profit center?

a. the authority to make decisions affecting the major determinants of profit,
including the power to choose its markets and sources of supply.

15. Which statement below best describes an investment center?

b. the authority to make decisions affecting the major determinants of profit,
including the power to choose its markets and sources of supply, and significant
control over the amount of invested capital.