Question 1

What type of transaction would not initially be recorded in the general ledger?

Accepted Answer

A)   Payment of a lawsuit settlement of $5 million
B)   Payroll
C)   Disposal of long-term assets
D)   Issuance or retirement of bonds and stock

Question 2

List and explain four examples (out of the ten listed in the text) of transaction risk in the financial process.

Accepted Answer

Any of four of the following: <b>Unautho...

Question 3

Describe some of the differences between GAAP and IFRS.

Accepted Answer

Examples of the differences between IFRS...

Question 4

The chart of accounts that is a listing of all account names, along with their numbers and codes assigned to the accounts (general ledger).

Accepted Answer

A) True 
 B)False  True

Question 5

The financial process is the core activity of the accounting information system.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is an example of vertical analysis?

Accepted Answer

A)   Data comparisons
B)   Absolute changes
C)   Common dollar analysis
D)   Percentage changes

Question 7

Which of the following is not a part of the financial process?

Accepted Answer

A)   Budget preparation
B)   Inventory management
C)   Events that do not fall within the revenue, purchasing, or inventory processes
D)   Summarized transaction and other event data from the other processes B

Question 8

The balance sheet and statement of cash flow constitute the basic reporting requirements in the financial process.

Accepted Answer

A) True 
 B)False

Question 9

Define "soft" and "hard" closings. Be sure to indicate the DIFFERENCE between the two.

Accepted Answer

Answers:
Soft closings allows interim cl...

Question 10

List and explain three examples of information processing control activities in the financial process.

Accepted Answer

Authorization Controls: Only auth...

Question 11

Which of the following illustrates a difference between GAAP and IFRS?

Accepted Answer

A)   Under IFRS, component depreciation is allowed.
B)   Under IFRS, impairment adjustments cannot be reversed.
C)   Under IFRS, the classification of some financial instruments will cause a change to GAAP-calculated debt ratios.
D)   Under IFRS, whether or not an entity is consolidated has to do with whether the consolidation was handled using the purchase method.

Question 12

Adjustments that must be reversed at the beginning of each accounting period are often accomplished using which data entry efficiency feature?

Accepted Answer

A)   Automatic distribution entry
B)   Recurring entry
C)   Time-sensitive entry
D)   Dollar versus cents entry

Question 13

Which of the following is part of the financial process because it is an event that does not fall within the revenue, purchasing, or inventory processes?

Accepted Answer

A)   Cost accounting
B)   Payment of stock dividends
C)   Accounts receivable
D)   Cash receipts

Question 14

Define the following: chart of accounts, credit rating, FOB point, picking list.

Accepted Answer

Answers:
Chart of accounts: listing of a...

Question 15

When an account is designated as an "inactive account," which of the following is true of its status?

Accepted Answer

A)   The accounting information system will prevent further entries from being made to the account.
B)   The account is immediately deleted from the general ledger.
C)   Entries may still be made to the account.
D)   The account remains active until the accounting period is closed and is deleted after the accounting period is closed.

Question 16

When an account is designated as "inactive," which of the following is NOT true of its status?

Accepted Answer

A)   The accounting system will prevent further entries from being made to the account.
B)   The accounting system will immediately delete the account from the chart of accounts.
C)   The account remains active until the accounting period is closed and financial statements issued.
D)   All of the above are false regarding inactive accounts. B

Question 17

What is the term that accounting software packages use for control accounts?

Accepted Answer

A)   Normal accounts
B)   Chart of accounts
C)   Sub-accounts
D)   Master accounts

Question 18

What types of business processes are first reflected in the general ledger module?

Accepted Answer

Only miscellaneous business processes ar...

Question 19

An account that stores the cubic feet of gas sold is an example of a statistical account.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not an event that falls within the financial process because it appropriately falls within the revenue, purchasing, or inventory processes?

Accepted Answer

A)   Payment of bond interest
B)   Issuance of bonds
C)   Vendor invoicing
D)   Issuance of stocks

Exam 8: The Financial Process

What type of transaction would not initially be recorded in the general ledger?

Correct AnswerverifiedShow Answer

List and explain four examples (out of the ten listed in the text) of transaction risk in the financial process.

Correct AnswerverifiedAny of four of the following: Unautho...View AnswerShow Answer

Describe some of the differences between GAAP and IFRS.

Correct AnswerverifiedExamples of the differences between IFRS...View AnswerShow Answer

The chart of accounts that is a listing of all account names, along with their numbers and codes assigned to the accounts (general ledger).

Correct AnswerverifiedTrue

The financial process is the core activity of the accounting information system.

Correct AnswerverifiedShow Answer

Which of the following is an example of vertical analysis?

Correct AnswerverifiedShow Answer

Which of the following is not a part of the financial process?

Correct AnswerverifiedB

The balance sheet and statement of cash flow constitute the basic reporting requirements in the financial process.

Correct AnswerverifiedShow Answer

Define "soft" and "hard" closings. Be sure to indicate the DIFFERENCE between the two.

Correct AnswerverifiedAnswers:Soft closings allows interim cl...View AnswerShow Answer

List and explain three examples of information processing control activities in the financial process.

Correct AnswerverifiedAuthorization Controls: Only auth...View AnswerShow Answer

Which of the following illustrates a difference between GAAP and IFRS?

Correct AnswerverifiedShow Answer

Adjustments that must be reversed at the beginning of each accounting period are often accomplished using which data entry efficiency feature?

Correct AnswerverifiedShow Answer

Which of the following is part of the financial process because it is an event that does not fall within the revenue, purchasing, or inventory processes?

Correct AnswerverifiedShow Answer

Define the following: chart of accounts, credit rating, FOB point, picking list.

Correct AnswerverifiedAnswers:Chart of accounts: listing of a...View AnswerShow Answer

When an account is designated as an "inactive account," which of the following is true of its status?

Correct AnswerverifiedShow Answer

When an account is designated as "inactive," which of the following is NOT true of its status?

Correct AnswerverifiedB

What is the term that accounting software packages use for control accounts?

Correct AnswerverifiedShow Answer

What types of business processes are first reflected in the general ledger module?

Correct AnswerverifiedOnly miscellaneous business processes ar...View AnswerShow Answer

An account that stores the cubic feet of gas sold is an example of a statistical account.

Correct AnswerverifiedShow Answer

Which of the following is not an event that falls within the financial process because it appropriately falls within the revenue, purchasing, or inventory processes?

Correct AnswerverifiedShow Answer

Correct Answer
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Any of four of the following: Unautho...
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Examples of the differences between IFRS...
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True

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B

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Answers:
Soft closings allows interim cl...
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Authorization Controls: Only auth...
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Correct Answer
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Correct Answer
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Answers:
Chart of accounts: listing of a...
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Correct Answer
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B

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Only miscellaneous business processes ar...
View Answer

Correct Answer
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Correct Answer
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