ACC 564 (Strayer) Week 11 Final Exam

1) The general ledger and reporting system consists of the ________ involved in ________ the general ledger and ________ reports.

A) business transactions; updating; processing

B) data processing; business transactions for; printing

C) information processing; updating; creating

D) business transactions; data processing; preparing

2) Which item below is not considered a major input to the general ledger and reporting system?

A) summary entries from the major subsystems

B) reports from managers

C) adjusting entries

D) financing and investing activities

3) Who provides the adjusting entries for a well-designed general ledger and reporting system?

A) various user departments

B) the treasurer’s area

C) the other major AIS subsystems

D) the controller’s area

4) The general ledger and reporting system is designed to provide information for which of the following user groups?

A) internal users

B) external users

C) inquiry processing by internal or external users

D) all of the above

5) The general ledger system of an organization should be designed to serve the information requirements of both internal and external users. This means that the system should support

A) producing expansive regular periodic reports to cover all information needs.

B) the real-time inquiry needs of all users.

C) producing regular periodic reports and respond to real-time inquiry needs.

D) access by investors and creditors of the organization to general ledger balances.

6) How is general ledger updating accomplished by the various accounting subsystems?

A) Individual journal entries for each accounting subsystem transaction update the general ledger every 24 hours.

B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger.

C) The controller or treasurer must approve accounting subsystem journal entries before any updating may occur.

D) Nonroutine transactions are entered into the system by the treasurer’s office.

7) When updating the general ledger, sales, purchases, and production are examples of ________ entries, and issuance or retirement of debt and the purchase or sale of investment securities are examples of ________ entries.

A) adjusting; controller originated

B) accounting subsystem; treasurer originated

C) adjusting; special journal

D) controller generated; special journal

8) Entries to update the general ledger are often documented by which of the following?

A) general journal

B) subsidiary journal

C) subsidiary ledgers

D) journal vouchers

9) Adjusting entries that reflect events that have already occurred, but for which no cash flow has taken place are classified as

A) accruals.

B) deferrals.

C) revaluations.

D) corrections.

10) Recording interest earned on an investment is an example of which type of adjusting journal entry?

A) accrual entry

B) deferral entry

C) revaluation entry

D) correcting entry

11) An adjusting entry made at the end of an accounting period that reflects the exchange of cash prior to performance of a related event is classified as a(n)

A) accrual entry.

B) deferral entry.

C) revaluation entry.

D) correcting entry.

12) Depreciation expense and bad debt expense are examples of which type of adjusting journal entry?

A) deferrals

B) accruals

C) revaluations

D) estimates

13) Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called

A) reconciliations.

B) revaluations.

C) estimates.

D) accruals.

14) Adjusting entries that are made to counteract the effects of errors found in the general ledger are called

A) accruals.

B) corrections.

C) deferrals.

D) estimates.

15) Corrections are entries made to correct errors found in ________.

A) all journals

B) special journals

C) the general ledger

D) the financial statements

16) Immediately after the adjusting entries are posted, the next step in the general ledger and reporting system is to prepare

A) an adjusted trial balance.

B) closing entries.

C) financial statements.

D) an unadjusted trial balance.

17) Financial statements are prepared in a certain sequence. Which statement is prepared last in the sequence?

A) the adjusted trial balance

B) the income statement

C) the balance sheet

D) the statement of cash flows

18) A listing of journal vouchers by numerical sequence, account number, or date is an example of

A) a general ledger control report.

B) a budget report.

C) a batch to be processed.

D) responsibility accounting.

19) If you believe not all adjusting entries were posted in the general ledger, you should prepare a general ledger control report listing journal vouchers in

A) numerical sequence.

B) chronological order.

C) general ledger account number order.

D) any order, since you have to review them all anyway.

20) If you believe a general ledger account was not adjusted properly or at all, you should prepare a general ledger control report listing journal vouchers in

A) numerical sequence.

B) chronological order.

C) general ledger account number order.

D) any order, since you have to review them all anyway.

21) The managerial report that shows planned cash inflows and outflows for major investments or acquisitions is the

A) journal voucher list.

B) statement of cash flows.

C) operating budget.

D) capital expenditures budget.

22) The operating budget

A) compares estimated cash flows from operations with planned expenditures.

B) shows cash inflows and outflows for each capital project.

C) depicts planned revenues and expenditures for each organizational unit.

D) is used to plan for the purchase and retirement of property, plant, and equipment.

23) Budgets and performance reports should be developed on the basis of

A) responsibility accounting.

B) generally accepted accounting principles.

C) financial accounting standards.

D) managerial accounting standards.

24) Performance reports for cost centers should compare actual versus budget ________ costs.

A) controllable

B) uncontrollable

C) fixed

D) variable

25) Performance reports for sales deparments should compare actual versus budget

A) revenue.

B) cost.

C) return on investment.

D) profit.

26) Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as ________ centers.

A) cost

B) profit

C) investment

D) revenue

27) As responsibility reports are rolled up into reports for higher level executives, they

A) become less detailed.

B) become more detailed.

C) become narrower in scope.

D) look about the same.

28) Variances for variable costs will be misleading when the planned output differs from budgeted output. A solution to this problem would be

A) calling all costs fixed.

B) to use flexible budgeting.

C) better prediction of output.

D) to eliminate the budgeting process.

29) Concerning XBRL, which of the following statements is not true?

A) XBRL is a variant of XML.

B) XBRL is specifically designed for use in communicating the content of financial data.

C) XBRL creates unique tags for each data item.

D) XBRL’s adoption will require accountants and systems professionals tag data for their clients.

30) The benefits of XBRL include:

A) organizations can publish financial information only once, using standard XBRL tags.

B) tagged data is readable and interpretable by computers, so users don’t need re-enter data into order to work with it.

C) Both are benefits of XBRL.

D) Neither are benefits of XBRL.

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