ACCT 3122- past quiz questions

Question 1

Which of the following is not a purpose of the acct sys?

a. provide accountability of all levels of management for the delegated responsibilites
b. to transform resources into goods and services
c. protect business assets from unauthorized use or consumption
d. measure, record categorize, and summarize the daily operating activities of the business in monetary terms

Answer 1

b. to transform resources into goods and services

Question 2

which of the following is not a reason to document the company’s financial processes?

a. indentifies ways to improve the accounting system
b. provides the information for training new employees
c. provides reasonable assurance that the financial statements are reliable
d. allows personnel to easily communicate information accounting the accounting system
e. reduces the likelihood of an incomplete or ineffective accounting system

Answer 2

c. provides reasonable assurance that the financial statements are reliable

Question 2

what is the duality aspect of every cycle in the value chain?

a. there is an inflow and outflow to ever process
b. for every debit, there must also be a credit
c. the end of the accounting cycle is also the start of the next accounting cycle
d. a company will only give something up if it expects something in return
e. all documents must be generated either externally or internally

Answer 2

d. a company will only give something up if it expects something in return

Question 3

for every purchase, there should also be a:

a. sale
b. labor operation
c. cash disbursement
d. cash receipts
e. material issue

Answer 3

c. cash disbursement

Question 4

what is the next step in the accounting sysrem after transactions are recorded in journals?

a. prepare financial statements
b. post to ledgers
c. prepare closing entries
d. prepare documents
e. prepare and post adjusting entries

Answer 4

b. post to ledgers

Question 5

what is typically the final step of the accounting process?

a. recording of adjusting entries
b. preparing the trial balance
c. preparing the post- closing trial balance
d. posting the totals in the journals to the general ledger
e. preparing the financial statements

Answer 5

c. preparing the post- closing trial balance

Question 6

a cash sale to a customer would be recorded in the:

a. the sales journal and the general journal
b. sales journal
c. the cash receipts journal and the general journal
d. purchases journal
e. cash receipts journal

Answer 6

e. cash receipts journal

Question 7

which of the following statements is correct?

a. all transactions must be recorded in both a special journal and a general journal
b. transactions are recorded in ledgers and ledgers are posted to the journals
c. every transaction is posted to the general ledger at the end of the month
d. transactions are recorded in journals are posted to ledgers

Answer 7

d. transactions are recorded in journals are posted to ledgers

Question 8

which of the following documents is prepared before the transaction occurs?

a. a bill of lading
b. an employee paycheck
c. a purchase order
d. a sales invoice
e. receiving report

Answer 8

c. a purchase order

Question 9

the write off of Lil’ Red Company’s account balance will be recorded in:

a. the general journal
b. the sales journal
c. the cash disbursements journal
d. the general ledger
e. cash receipts journal

Answer 9

d. the general journal

Question 10

the journal entry writing off Lil’ Red Company’s balance as uncollectible will involve:

a. a debit to bad debt expense
b. a debit to allowance for doubtful accounts
c. a debit to sales returns
d. a debit to accounts receivable

Answer 10

b. a debit to allowance for doubtful accounts

Question 11

why does the bookkeeper initial the accounts receivable aged trial balance?
a. to identify who was responsible for performing the task
b. to show that the general ledger matches the accounts receivable subledger
c. to identify which customers have been sent a monthly statement
d. to authorize the collection of overdue receivables

Answer 11

b. to show that the general ledger matches the accounts receivable subledger

Question 12

what is the purpose of comparing the validated deposit receipt to the cash receipts prelist and cash receipts journal?

a. to record the receipt of cash
b. to show that the accounts receivable subledger is accurate
b. to show that the accounts receivable subledger is accurate
c. to adjust for loans from banks
d. to verify that the amount deposited in the bank matched the amount recorded in the books

Answer 12

d. to verify that the amount deposited in the bank matched the amount recorded in the books

Question 13

why does rudy winters initial the write off the uncollectible account?

a. because rudy is mad at lil’ red company
b. to ensure that the money was deposited in the bank
c. to ensure that the information has been recorded in the general ledger
d. to ensure that the bookkeepers’ numbers are correct
e. to show that rudy has reviewed the situation and agrees that the account cannot be collected

Answer 13

e. to show that rudy has reviewed the situation and agrees that the account cannot be collected

Question 14

the reason why rudy winter initials the invoice is

a. to verify that there is a purchase order associated with the invoice
b. to show that he has reviewed the invoice and has authorized the payment to the supplier
c. to show that he has adjusted the invoice for any quantity or price discrepamcies
d. to remember to contact the supplier

Answer 14

b. to show that he has reviewed the invoice and has authorized the payment to the supplier

Question 15

what three documents are compare in a three way match?

a. the purchases journal, accounts receivable subledger and genral ledger
b. the purchase order, pick list and bill of lading
c. the purchase order, bill of lading and the invoice
d. the purchases journal, accounts receivable subledger and fixed assets subledger
e. the purchase order, receiving report and the invoice

Answer 15

e. the purchase order, receiving report and the invoice

Question 16

the payment to the board of water and light will invoice a debit to:

a. purchases
b. accounts payable
c. fixed assets
d. other operating expenses
e. advertising expense

Answer 16

d. other operating expenses

Question 17

Who pays Social Security taxes?

a. neither the employee or the employers
b. both the employee and the employer
c. the employer
d. the employee

Answer 17

b. both the employee and the employer

Question 18

the primary purpose of a bank reconciliation is to:

a. to identify the difference between the bank balance per the bank statement and the general ledger balance
b. make sure the bank has nit made a mistake
c. make sure the bookkeeper has not made a mistake
d. to make sure all cash received got deposited
e. to show how much money our company has at any point in time

Answer 18

a. to identify the difference between the bank balance per the bank statement and the general ledger balance

Question 19

which documents are not used in preparing the bank rec?

a. the cash disbursements journal
b. the bank statement
c. the purchases journal
d. the general ledger
e. the prior month’s bank rec

Answer 19

c. the purchases journal

Question 20

Which of the following should the preparer of the bank rec investigate further? assume the cutoff date for the bank statement is October 31.

a. a deposit made an October 30 that is still in transit
b. a recording error where a check for $202 was mistakenly recorded as $220
c. a check dated September 15 that is still outstanding
d. a check dated October 31 that is still outstanding
e. a deposit made on October 7 that is still in transit

Answer 20

e. a deposit made on October 7 that is still in transit

Question 21

Which of the following is correct regarding errors on the bank reconciliation?

a. corrections to errors made by the bookkeeper are recorded in the general journal and posted to the general ledger
b. an error involves a mistake made by the bookkeeper, but never a mistake by the bank
c. an example of a banking error is a cash receipt that was not recorded in the cash receipts journal
d. corrections to errors made by the bank are recorded in the general journal and posted to the general ledger
e. an error involves a mistake made by the bank but never a mistake by the bookkeeper

Answer 21

a. corrections to errors made by the bookkeeper are recorded in the general journal and posted to the general ledger

Question 22

why does the bookkeeper put his or her initials to the right of the fixed assets balance in the general ledger?

a. to identify who was responsible for recording the journal entry
b. to show that the general ledger matches the fixed assets subledger
c. to show the depreciation for the period has been recorded
d. to authorize the purchase of fixed assets

Answer 22

b. to show that the general ledger matches the fixed assets subledger

Question 23

nancy ford not having access to the inventory records is an example of what type of control

a. adequate documents and records
b. access controls
c. human resource controls
d. segregation of duties
e. independent checks of performance
f. authorization of transactions

Answer 23

d. segregation of duties

Question 24

why does jim adams compare the vendor invoice to the purchase order and receiving report to ensure the information matches

a. to identify the proper expense or asset account for recording the items
b. ensure that only necessary items are being purchased
c. to ensure that the company received everything identified on the invoice
d. to ensure that there is segregation of duties between custody of assets and record keeping

Answer 24

c. to ensure that the company received everything identified on the invoice

Question 25

why does waren sports supply use prenumbered receiving reports?

a. to notify the vendor who to contact for payments
b. to ensure that only necessary items are being purchased
c. to ensure that all items (ex: inventory, fixed assets or supplies) received are properly accounted for
d. to check the accuracy of the purchase order

Answer 25

c. to ensure that all items (ex: inventory, fixed assets or supplies) received are properly accounted for

Question 26

why does waren sports supply prefer ACH payments over paper checks?

a. ach payments do not have to be recorded in the cash receipts journal
b. waren sports supply receives the ACH payment before the goods are shipped
c. ACH payments provide no advantage over paper checks
d. ACH payments are automatically deposited in the company’s account, so there is less chance that the money will be stolen

Answer 26

d. ACH payments are automatically deposited in the company’s account, so there is less chance that the money will be stolen

Question 27

comparing the total in the accounts payable subledger to the accounts payable general ledger account is an example of what type of control?

a. segregation of duties
b. human resource controls
c. authorization of transactions
d. adequate documents and records
e. independent checks of performance
f. access controls

Answer 27

e. independent checks of performance

Question 28

why does jim adams place a posting reference check mark under each column total in the journals and by each of the individual transactions in the “other” column

a. to show that the debits in the journal match the credits
b. to show that the amount in the cash account is correct
c. to show that the totals have been posted to the general ledger
d. to identify which accounts need to be reviewed later

Answer 28

c. to show that the totals have been posted to the general ledger

Question 29

why does ray kramer initial each employee’s time record report?

a. to ensure segregation of duties from bookkeeping and custody of assets
b. to show that he has reviewed the time record report and believes the number of hours is accurate
c. to ensure the payrates are accurate
d. to ensure that payroll deductions are accurate

Answer 29

b. to show that he has reviewed the time record report and believes the number of hours is accurate

Question 30

why does the employee sign the time record report before he or she receives the paycheck?

a. to verify that the information on the paycheck is accurate
b. to show that he or she received the paycheck
c. to verify that the information and to show that he or she received the paycheck
d. none of the choices is correct

Answer 30

c. to verify that the information and to show that he or she received the paycheck

Question 31

why dies ray kramer prepare the bank reconciliation?

a. to identify the differences between the bank balance per bank statement and the balance per books
b. to ensure that accounts receivable general ledger matches the accounts receivable subledger
c. to show how much money waren sports supply has at any point in time
d. to make sure all cash that was received got deposited

Answer 31

a. to identify the differences between the bank balance per bank statement and the balance per books

Question 32

separation of authorization of payment from accounting for the payment is an example of what type of control?

a. authorization of transactions
b. segragation of duties
c. adequate documents and records
d. human resource controls
e. independent checks of performance
f. access controls

Answer 32

b. segragation of duties

Question 33

why does jim adams prepare a monthly statement for each customer with a balance?

a. to remind customers to pay the company
b. to make sure all cash that was received got deposited
c. to identify differences between the company’s records and the customers records
d. to ensure that the accounts receivable general ledger matches the accounts receivable subledger

Answer 33

c. to identify differences between the company’s records and the customers records

Question 34

why does nancy ford foot the balance for the AR subsidiary ledger and compares the total to the AR general ledger?

a. to identify whether there are errors in the AR general ledger account or the AR subsidiary ledger
b. to identify which accounts need to be written off as uncollectible
c. to identify which suppliers need to be paid
d. to make sure all cash that was received got deposited

Answer 34

a. to identify whether there are errors in the AR general ledger account or the AR subsidiary ledger

Question 35

why does waren sports supply use a time clock to track jim adams and nancy ford’s hours?

a. to avoid time theft (ex: employees are paid for hours they didnt work)
b. to ensure that payrates are a
c. to ensure segregation of duties from bookkeeping and custody of assets
d. to ensure that payroll deductions are accurate

Answer 35

a. to avoid time theft (ex: employees are paid for hours they didnt work)

Question 36

why does nancy ford foot the total in the AP subledger and compare it to the AP general ledger account?

a. to make sure all cash paid has been recorded
b. to identify whether there are errors in the AP general ledger account of the AP subsidiary ledger
c. to identify whether purchase discounts have been take
d. to identify which suppliers need to be paid

Answer 36

b. to identify whether there are errors in the AP general ledger account of the AP subsidiary ledger

Question 37

why does ray kramer intitial the write off of the customer account in the general journal and subsidiary ledger?

a. because kramer is mad at the customer
b. to show that he has reviewed the situation and agrees that the account cannot be collected
c. to ensure that the information has been recorded in the general ledger
d. to ensure that the money was deposited in the bank
e. to ensure that the bookkeepers’ numbers are correct

Answer 37

b. to show that he has reviewed the situation and agrees that the account cannot be collected

Question 38

what type of control is the cash receipts prelist?

a. independent checks of performance
b. adequate documents and records
c. access controls
d. human resource controls
e. segregation of duties
f. authorization of transactions

Answer 38

e. segregation of duties

Question 39

the employee signing the paycheck is an example of what type of control?

a. adequate documents and records
b. access controls
c. human resource controls
d. authorization of transactions
e. independent checks of performance
f. segregation of duties

Answer 39

e. independent checks of performance

Question 40

ray kramer initialing each employee’s time record report is an example of what type of control?

a. adequate documents and records
b. human resource controls
c. authorization of transactions
d. segregation of duties
e. access controls
f. independent checks of performance

Answer 40

c. authorization of transactions

Question 41

what type of control is jim adams initialing the invoice before it is sent to the customer?

a. independent checks of performance
b. segregation of duties
c. human resource controls
d. access controls
e. adequate documents and records
f. authorization of transactions

Answer 41

a. independent checks of performance

Question 42

ray kramer writing “paid”, the checl number, the date and his initials on the invoice is an example of what type of control?

a. segregation of duties
b. adequate documents and records
c. authorization of transactions
d. access controls
e. independent checks of performance
f. human resource controls

Answer 42

c. authorization of transactions