Pre-Assessment Flashcards
Which information flow supports preparing the financial statements of an organization?
Internal vertical Internal horizontal External horizontal External vertical
Internal vertical
What is the relationship between the transaction processing system (TPS) and the general ledger system (GLS)?
-The GLS captures TPS transactions.
-Data from the TPS are input for the GLS.
-Data from the GLS are summarized in the TPS.
-The GLS and TPS have operational interdependency.
Data from the TPS are input for the GLS.
Which accounting information system (AIS) component provides information to external users?
-General ledger system (GLS)
-Financial reporting system (FRS)
-Management information system (MIS)
-Transaction processing system (TPS)
Financial reporting system (FRS)
Useful information has the following characteristics: relevance, timeliness, accuracy, completeness, and summarization.
What happens if the information is irrelevant?
The decision maker receives outdated information.
The decision maker analyzes material information.
The decision maker receives inaccurate information.
The decision maker wastes time analyzing the information.
The decision maker wastes time analyzing the information.
A grocery store updates its inventory levels in the accounting information system in real time. However, the store frequently reports petty theft and has trouble locating inventory on the shop floor.
Which characteristic of useful information is missing from this scenario?
-Timely
-Reliable
-Complete
-Relevant
Reliable
Which component of an information system is used to produce an operational budget?
-Transaction processing system (TPS)
-Financial reporting system (FRS)
-Management reporting system (MRS)
-General ledger system (GLS)
Management reporting system (MRS)
Why would an organization decide to buy a turnkey information system (IS)?
-The organization has an in-house team of qualified IT professionals.
-The organization has a generous budget and timeline.
-The organization can implement it with little or no modification.
-The organization needs an IS addressing a specific business need.
The organization can implement it with little or no modification.
What are the advantages of using data coding in accounting information systems?
-Providing a means of accountability over the incompleteness of the transactions processed
-Misidentifying unique transactions and accounts within a file
-Supporting the audit function by providing an ineffective audit trail
-Concisely representing large amounts of complex information that would otherwise be unmanageable
Concisely representing large amounts of complex information that would otherwise be unmanageable
How is the digital audit trail like the paper audit trail?
-The digital audit trail is unable to contact customers for verification.
-The digital audit trail uses only hard copies.
-The digital audit trail allows transaction tracing.
-The digital audit trail is unable to find errors.
The digital audit trail allows transaction tracing.
What does an external auditor’s responsibility involve?
-Encouraging incomplete work
-Hiding invalid accounts
-Camouflaging instances of inaccurate reporting
-Determining validity, accuracy, and completeness
Determining validity, accuracy, and completeness
Which type of digital computer file stores payroll programs and other data that are used as standards for processing?
-Master file
-Transaction file
-Archive file
-Reference file
-Reference file
With which cycle does the fixed asset system share some characteristics?
-Conversion cycle
-Revenue cycle
-Development cycle
-Expenditure cycle
Expenditure cycle
Which company cycle transforms or converts input resources; such as raw materials, labor, and overhead; into finished products or services for sale?
-Expenditure cycle
-Revenue cycle
-Development cycle
-Conversion cycle
Conversion cycle
Data coding involves creating simple numeric or alphabetic codes to represent complex economic phenomena that facilitate efficient data processing.
Which problem does data coding solve?
-Items sold can be properly identified and entered onto source documents.
-An entry takes a great deal of recording space, is time-consuming to record, and is prone to many types of errors.
-Postings to ledger accounts require minimal searching through the subsidiary files using small descriptions as the key.
-Locating and picking goods for shipment is efficient, and shipping errors are unlikely.
An entry takes a great deal of recording space, is time-consuming to record, and is prone to many types of errors.
Which items are included in the subsidiary ledger?
-Tracking information of the outstanding orders with inventory on the backorder
-The account number and name with a description of items purchased
-The quantities of items shipped and whether the customer received the correct merchandise
-Customer name, customer address, current balance, available credit, transaction dates, invoice numbers, credit for payments, returns
Customer name, customer address, current balance, available credit, transaction dates, invoice numbers, credit for payments, returns
What are the duties of the mail room clerk?
-The mail room clerk prepares a summary of changes to account balances.
-The mail room clerk submits cash receipt journals to the bank.
-The mail room clerk prepares the journal voucher daily.
-The mail room clerk opens the envelopes and reconciles checks and remittances.
The mail room clerk opens the envelopes and reconciles checks and remittances.
What is a method for verification control?
-A copy of the signature to verify the signature
-A written authorization via the internet
-Direct access to inventory to shop
-A verbal authorization for the credit transaction
A copy of the signature to verify the signature
What is the purpose of a purchase requisition?
-The purchase requisition assists with reconciling goods.
-The purchase requisition is a formal entry of the sold products to an accounting department.
-The purchase requisition allows customers to make requests for new items.
-The purchase requisition ensures items purchased are only from authorized vendors.
-The purchase requisition ensures items purchased are only from authorized vendors.
What are the accounting functions for the accounts payable?
-Identify low-level conditions and interject new activities to follow
-Record the standard cost of items
-Review all the bills
-Collect data and invoices to properly complete transactions
Collect data and invoices to properly complete transactions
How do internal controls affect daily activities?
-They compromise the integrity of an organization.
-They conclude that employees that steal from a job can go undetected.
-They are designed for accounting departments only.
-They protect an organization from risk, and therefore, physical controls and IT controls are used.
They protect an organization from risk, and therefore, physical controls and IT controls are used.
Which items make up the three-way match?
-Purchase order, reports and blind copy
-Supplier’s invoice, receiving report and purchase order
-Purchase requisition, vendor invoice and packing slips
-Reports, blind copy and purchase requisition
Supplier’s invoice, receiving report and purchase order
Which items does a payroll department need in order to prepare the payroll register?
-Hours worked, voucher packet, and withholding information
-Voucher packet, pay rate, and hours worked
-Pay rate, withholding information, and hours worked
-Hours worked, bank automated clearing house information, and pay rate
Pay rate, withholding information, and hours worked
Which document contains details on the acquisition of a fixed asset?
-Inventory report
-Journal voucher report
-Payroll report
-Depreciation report
Depreciation report
Which process represents proper design for funding a payroll imprest account?
-The Cash Disbursements department creates a check at the beginning of the year based on the estimated amount of payroll from last year to fund the payroll imprest account.
-The Cash Disbursements department creates a single check to fund the payroll imprest account for the company payroll disbursement.
-The Cash Disbursements department funds the payroll imprest account for whatever cleared in the prior month’s payroll disbursement.
-Each division is designated a payroll imprest account, and checks for each division are deposited for each division’s payroll expense.
-The Cash Disbursements department creates a single check to fund the payroll imprest account for the company payroll disbursement.
Who are the primary recipients of financial information?
-Investors and employees
-Investors and creditors
-Employees and creditors
-The public and government agencies
Investors and creditors
Which item represents a characteristic of a detailed and rich audit trail for a general ledger?
-Providing the ability to refer inquiries
-Providing a means for detecting errors
-Providing a way to completely destroy files
-Providing data to the public
Providing a means for detecting errors
Which risk does automating general ledger (GL) postings pose to a company?
-Numerous automated transactions need more time to process and update financial data.
-Real-time transaction processing requires reconciliation and review of journal vouchers.
-Having no human intervention means the company could have errors in the data.
-Batched transactions need complex application logic to process.
Having no human intervention means the company could have errors in the data.
What describes the network of information that can be used as an audit trail?
-Adjusted trial balance, ledgers, and journals
-Adjusted trial balance, closing entries, and ledgers
-Documents, journals, and ledgers
-Journals, ledgers, and special journals or subsidiary ledgers
-Documents, journals, and ledgers
