Exam 15: Financial Management

If variances exist, managers must first examine the report to determine whether the data were reported correctly.

Audits focus on systemic weaknesses within an organization.

Audits are preventative work.

When using an audit trail, the auditor begins with the source document.

Match the term with the best descriptor. -serves to discover mistakes after their occurrence

Auditors are always employees of the organization as they have access to highly sensitive material.

Verification of the information recorded by an organization is performed using audit trails.

Match the term with the best descriptor. -sometimes referred to as cost accounting

Define budget. List and describe the two ways in which the budget process is managed.

The income statement indicates what the organization earned and how much was spent over the interval of time covered by the statement.

Accounting is known as the language of finance.

Match the term with the best descriptor. -the science of money, credit, and banking

Explain the difference between a journal and a general ledger.

The managers in an organization are responsible for which step of the financial cycle?

Internal controls are detective work.

If you wish to know how much money an organization has and how it has been spent, which document would you request?

Managerial accounting encompasses the design of the organization's bookkeeping system.

Requiring an employee to be granted authority before having access to valuable assets is demonstrating which element of internal control?

What is sometimes referred to as cost accounting?

Accounting procedures, precautions, and forms established to prevent and minimize errors and fraud are called