Professional Documents
Culture Documents
6-GL and FR Cycle
6-GL and FR Cycle
reporting cycle
True/False
1. The sole function of the general ledger and the financial reporting cycle is to prepare financial
statements to the shareholders of the company. F
2. XBRL is becoming the standard for corporate filing and reporting in Australia. True. XBRL
(eXtensible Business Reporting Language) has been increasingly adopted as a standard for corporate filing and
reporting in various countries, including Australia
3. Detailed budgeting, although more difficult than aggregate budgeting, provides better monitoring of
performance. T . Detailed budgeting involves breaking down budgets into specific categories or items,
which can offer better insight and control over spending and performance compared to broader,
aggregate budgeting.
4. The general ledger and financial reporting cycle starts with the updating of the general ledger. F
( bắt đầu bằng prepare budget)
5. The only output of the general ledger and financial reporting cycle is the set of financial statements.
6. Historical transactions and prior results must be used in the budgeting process to produce more
accurate estimates. F. ( not must )
7. The primary risk related to determining budget values are data entry errors. F. ( under/overestimate
revenue and expenditure.)
8. The primary risk when preparing adjusting journals are data entry errors. T.
9. Management reports produced by the general ledger and financial reporting cycle should be
protected against unauthorised distribution.
10. Separation of duties need not be specified for the general ledger and financial reporting cycle
because there is no physical asset involved. T.
Multiple choice
a. Summarises, adjusts, and reports on data from all previous operational cycles
b. Summarises, adjusts, and reports on data from all current operational cycles
c. Creates, adjusts, and summarises on data from all previous operational cycles
d. Creates, adjusts, and summarises on data from all current operational cycles
13. Financial reports generated in the general ledger and financial reporting cycle is not used by:
a. Budgets created for a particular financial year should not be altered until the next financial
year.
b. Assuring the timeliness, validity, accuracy and completeness of reported data has nothing to
do with the organisation success's.
c. Final budgets are used as a forecast rather than a control measure.
d. To motivate desirable behaviour by managers within the organisation, budgets should be
framed so that activity targets are achievable but challenging.
a. Get a forecast of resource usage for the next financial year only
b. Facilitate organisational planning and control
c. Request more funding.
d. None of the above.
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16. An unfavourable variance between budgeted and actual data does not indicate
a. Poor performance
b. Budget estimates were set at an unrealistic or unachievable level
c. The estimation of future activity levels and the associated potential costs and revenues is
incorrect and inaccurate.
d. None of the above.
17. In terms of the general ledger and financial reporting cycle, which of the following sequences is in
the correct order?
a. create trial balance, perform bank reconciliation, prepare adjusting journal entries, conduct
financial reporting
b. prepare adjusting journal entries, create trial balance, perform bank reconciliation, conduct
financial reporting
c. perform bank reconciliation, create trial balance, prepare adjusting journal entries, conduct
financial reporting
d. create trial balance, prepare adjusting journal entries, perform bank reconciliation, conduct
financial reporting
a. Decision making performance may be compromised due to poor quality outputs of the
general ledger and financial reporting cycle.
b. Decision making performance may be compromised due to poorly formatted and designed
reports.
c. Decision making performance may be compromised due to too many data being presented
in the reports.
d. None of the above.
20. Which of the following is not a problem that can be caused directly by errors in financial
statements?
a. ERP
b. XBRL
c. Both of a and b
d. None of the above
22. An internet-based banking facility that allows organisations to manage and view their bank
accounts online and conduct transactions such as transfer from those accounts is called:
a. Online reconciliation
b. Online payment
c. Online banking
d. Online financial management
23. XBRL allows semantics to be embedded within strings of financial data. This does not mean:
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26. Setting budget targets requires balance between:
a. the current financial situation of the organisation and the forecasted cash flow
b. what is desired in terms of performance and what is thought to be possible
c. the expenditure and the revenue of the organisation
d. All of the above.
27. Which of the following is not required during the process of updating the general ledger?
a. journal voucher
b. accounts receivable data
c. manufacturing overheads
d. direct labour costs
28. To minimise the risk of under or over estimating revenue and expenditure amounts, which of the
following controls can be applied?
30. A warning message is produced if budget estimate varies by more than a fixed percentage from
last year's budget is an example of controlling for:
a. fraud
b. data entry errors when recording budgets
c. underestimation of revenue and expenditure amounts
d. None of the above.
31. To reduce the risks of incomplete and inaccurate data during data extraction and validation in the
process of updating the general ledger, which of the following controls can be used?
a. Batch totals
b. Hash totals
c. Use ledger control accounts
d. All of the above
32. Which of the following is not helpful in reducing the risk of journal entries errors during the
preparation of adjusting journals?
35. Which of the following KPIs is not suitable for measuring how accurate and complete the budget
estimates are determined and recorded?