Question 1

Audit trails:

Accepted Answer

A) Can proceed only from the source document to the journal entry. 
B) Can proceed only from the journal entry to the source document. 
C) Is only utilized by the CPA auditors. 
D) Can be from the source document to the journal entry or from the journal entry to the source document. 
A) Can proceed only from the source document to the journal entry. 
B) Can proceed only from the journal entry to the source document. 
C) Is only utilized by the CPA auditors. 
D) Can be from the source document to the journal entry or from the journal entry to the source document.

Question 2

External reports do not include:

Accepted Answer

A) Balance sheets. 
B) Income statements. 
C) Sales reports. 
D) Cash flows. 
A) Balance sheets. 
B) Income statements. 
C) Sales reports. 
D) Cash flows.

Question 3

Select the correct statement from the following.

Accepted Answer

A) General ledger employees should not have custody of any assets that they record in the general ledger. 
B) General ledger employees should never be given responsibility for authorizing any journal vouchers. 
C) General ledger employees should only record journal vouchers that have been authorized by the appropriate manager. 
D) All of the above, A, B, and C, are correct. 
A) General ledger employees should not have custody of any assets that they record in the general ledger. 
B) General ledger employees should never be given responsibility for authorizing any journal vouchers. 
C) General ledger employees should only record journal vouchers that have been authorized by the appropriate manager. 
D) All of the above, A, B, and C, are correct.

Question 4

Because of their access to the accounting system, internal managers need less detailed reports than external users.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements regarding the authorization of general ledger posting is NOT true?

Accepted Answer

A) Posting to the general ledger always requires specific authorization. 
B) User IDs and passwords can serve as authorization to post transactions to the general ledger. 
C) A journal voucher serves as authorization for manual systems. 
D) As IT systems become more automated, the authorization of general ledger posting is moved to lower levels of employees. 
A) Posting to the general ledger always requires specific authorization. 
B) User IDs and passwords can serve as authorization to post transactions to the general ledger. 
C) A journal voucher serves as authorization for manual systems. 
D) As IT systems become more automated, the authorization of general ledger posting is moved to lower levels of employees.

Question 6

A corporation's own stock that is repurchased by the company on the open market is a marketable security.

Accepted Answer

A) True 
 B)False

Question 7

Examples of employee initiated fraud would NOT include:

Accepted Answer

A) The writing off uncollectible accounts of a friend even when it could be collected. 
B) The inflation of hours worked on time card 
C) The theft of cash or checks from the mailroom. 
D) The release of false or misleading general purpose financial statements. 
A) The writing off uncollectible accounts of a friend even when it could be collected. 
B) The inflation of hours worked on time card 
C) The theft of cash or checks from the mailroom. 
D) The release of false or misleading general purpose financial statements.

Question 8

Security of source documents:

Accepted Answer

A) Is essential for both manual general ledger systems and IT accounting systems. 
B) Is not a factor with IT accounting systems since the source documents are electronic images. 
C) Is not a factor with manual general ledger systems since they are printed documents in archive files. 
D) None of the options, A, B, or C, are correct. 
A) Is essential for both manual general ledger systems and IT accounting systems. 
B) Is not a factor with IT accounting systems since the source documents are electronic images. 
C) Is not a factor with manual general ledger systems since they are printed documents in archive files. 
D) None of the options, A, B, or C, are correct.

Question 9

Segregation of duties:

Accepted Answer

A) Remains unchanged between computerized and manual accounting. 
B) May be more difficult in less complex computerized accounting systems. 
C) Is not a factor with computerized accounting systems. 
D) Is not a factor with manual accounting systems. 
A) Remains unchanged between computerized and manual accounting. 
B) May be more difficult in less complex computerized accounting systems. 
C) Is not a factor with computerized accounting systems. 
D) Is not a factor with manual accounting systems.

Question 10

Items associated with debt do NOT include:

Accepted Answer

A) Interest. 
B) Maturity date. 
C) Dividends. 
D) Changes in stockholders' equity. 
A) Interest. 
B) Maturity date. 
C) Dividends. 
D) Changes in stockholders' equity.

Question 11

Corporations with complex IT systems:

Accepted Answer

A) May automate their investment process. 
B) Still handle all investment processes manually. 
C) Generally isolate the investment process from their accounting application. 
D) Cannot forecast surplus cash levels. 
A) May automate their investment process. 
B) Still handle all investment processes manually. 
C) Generally isolate the investment process from their accounting application. 
D) Cannot forecast surplus cash levels.

Question 12

The processes that authorize the raising of capital, execute the raising of capital, and properly account for that capital are called:

Accepted Answer

A) Capital raising processes 
B) Source of capital processes 
C) Administrative processes 
D) Investment processes 
A) Capital raising processes 
B) Source of capital processes 
C) Administrative processes 
D) Investment processes

Question 13

Investment processes:

Accepted Answer

A) Issue stock. 
B) Issue bonds. 
C) Purchase of fixed assets. 
D) Invest excess funds. 
A) Issue stock. 
B) Issue bonds. 
C) Purchase of fixed assets. 
D) Invest excess funds.

Question 14

Fraud is:

Accepted Answer

A) Harder to conceal in the routine events of conversion and sales. 
B) Harder to conceal in the administrative processes such as investments because they are nonroutine and the number of transactions varies. 
C) Harder to conceal when initiated by top management due to limited access to the records. 
D) Precluded by proper internal control processes. 
A) Harder to conceal in the routine events of conversion and sales. 
B) Harder to conceal in the administrative processes such as investments because they are nonroutine and the number of transactions varies. 
C) Harder to conceal when initiated by top management due to limited access to the records. 
D) Precluded by proper internal control processes.

Question 15

Select the answer that contains only external reports.

Accepted Answer

A) Balance sheet, income statement, cash flow statement. 
B) Sales, balance sheet, income statement. 
C) Balance sheet, income statement, aged receivables. 
D) Sales, inventory, aged receivables. 
A) Balance sheet, income statement, cash flow statement. 
B) Sales, balance sheet, income statement. 
C) Balance sheet, income statement, aged receivables. 
D) Sales, inventory, aged receivables.

Question 16

Capital or investment processes:

Accepted Answer

A) Is a regular and frequent event. 
B) Do not require established procedures or internal controls due to their infrequency. 
C) Require established procedures and internal controls even though they are considered infrequent events. 
D) Do not involve the company's own bond issues. 
A) Is a regular and frequent event. 
B) Do not require established procedures or internal controls due to their infrequency. 
C) Require established procedures and internal controls even though they are considered infrequent events. 
D) Do not involve the company's own bond issues.

Question 17

Raw material events can be found in which two processes?

Accepted Answer

A) Revenue and return processes, systems & controls and 2) expenditures and return processes, systems & controls. 
B) Expenditures and return processes, systems & controls and 2) conversion processes, systems & controls. 
C) Conversion processes, systems & controls and 2) Administrative processes, systems & controls. 
D) Administrative processes, systems & controls and 2) Revenue and return processes, systems & controls. 
A) Revenue and return processes, systems & controls and 2) expenditures and return processes, systems & controls. 
B) Expenditures and return processes, systems & controls and 2) conversion processes, systems & controls. 
C) Conversion processes, systems & controls and 2) Administrative processes, systems & controls. 
D) Administrative processes, systems & controls and 2) Revenue and return processes, systems & controls.

Question 18

Corrections to posting errors are made:

Accepted Answer

A) Before the first trial balance. 
B) Only after the first trial balance. 
C) When discovered. 
D) Only when directed by top management. 
A) Before the first trial balance. 
B) Only after the first trial balance. 
C) When discovered. 
D) Only when directed by top management.

Question 19

Regarding subsidiary ledgers and general ledger control accounts, which of the following is NOT true?

Accepted Answer

A) Total balances in a subsidiary ledger should always equal the balance in the corresponding general ledger account. 
B) The general ledger maintains details of subaccounts. 
C) Control is enhanced by separating the subsidiary ledger from the general ledger. 
D) Reconciling a subsidiary ledger to the general ledger can help to detect errors or fraud. 
A) Total balances in a subsidiary ledger should always equal the balance in the corresponding general ledger account. 
B) The general ledger maintains details of subaccounts. 
C) Control is enhanced by separating the subsidiary ledger from the general ledger. 
D) Reconciling a subsidiary ledger to the general ledger can help to detect errors or fraud.

Question 20

Special journals include:

Accepted Answer

A) Accounts receivable journal, cash receipts journal, payroll journal, purchases journal, and sales journal. 
B) Accounts payable journal, cash disbursements journal, payroll journal, purchases journal, and sales journal. 
C) Cash disbursements journal, cash receipts journal, general journal, payroll journal, purchases journal, and sales journal. 
D) Cash disbursements journal, cash receipts journal, payroll journal, purchases journal, and sales journal. 
A) Accounts receivable journal, cash receipts journal, payroll journal, purchases journal, and sales journal. 
B) Accounts payable journal, cash disbursements journal, payroll journal, purchases journal, and sales journal. 
C) Cash disbursements journal, cash receipts journal, general journal, payroll journal, purchases journal, and sales journal. 
D) Cash disbursements journal, cash receipts journal, payroll journal, purchases journal, and sales journal.

Audit trails:

External reports do not include:

Select the correct statement from the following.

Because of their access to the accounting system, internal managers need less detailed reports than external users.

Which of the following statements regarding the authorization of general ledger posting is NOT true?

A corporation's own stock that is repurchased by the company on the open market is a marketable security.

Examples of employee initiated fraud would NOT include:

Security of source documents:

Segregation of duties:

Items associated with debt do NOT include:

Corporations with complex IT systems:

The processes that authorize the raising of capital, execute the raising of capital, and properly account for that capital are called:

Investment processes:

Fraud is:

Select the answer that contains only external reports.

Capital or investment processes:

Raw material events can be found in which two processes?

Corrections to posting errors are made:

Regarding subsidiary ledgers and general ledger control accounts, which of the following is NOT true?

Special journals include:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters

Exam 12: Administrative Processes and Controls

Audit trails:

External reports do not include:

Select the correct statement from the following.

Because of their access to the accounting system, internal managers need less detailed reports than external users.

Which of the following statements regarding the authorization of general ledger posting is NOT true?

A corporation's own stock that is repurchased by the company on the open market is a marketable security.

Examples of employee initiated fraud would NOT include:

Security of source documents:

Segregation of duties:

Items associated with debt do NOT include:

Corporations with complex IT systems:

The processes that authorize the raising of capital, execute the raising of capital, and properly account for that capital are called:

Investment processes:

Fraud is:

Select the answer that contains only external reports.

Capital or investment processes:

Raw material events can be found in which two processes?

Corrections to posting errors are made:

Regarding subsidiary ledgers and general ledger control accounts, which of the following is NOT true?

Special journals include:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters