Question 1

Accounting is often confused with:

Accepted Answer

A)  Bookkeeping. 
B)  Finance. 
C)  Information systems. 
D)  Tax research. 
A)  Bookkeeping. 
B)  Finance. 
C)  Information systems. 
D)  Tax research. A

Question 2

Internal controls
Sebastian's Coffee Shop makes and sells specialty coffee drinks, sandwiches and pastries. Sebastian has hired you to construct the shop's first chart of accounts; he wants to use a block coding system. Use the principles of block coding to assign account numbers to the accounts listed below. $$\begin{array} { | l | l | l | l | } 
\hline { \begin{array} { c } 
\text { Account } \
\text { title }
\end{array} } & \begin{array} { c } 
\text { Account } \
\text { number }
\end{array} & \text { Account title } &  { \begin{array} { c } 
\text { Account } \
\text { number }
\end{array} } \
\hline \text { Supplies } & & \text { Sales } & \
\hline \text { Equipment } & & \begin{array} { l } 
\text { Sales } \
\text { discounts }
\end{array} & \
\hline \begin{array} { l } 
\text { Wages } \
\text { payable }
\end{array} && \begin{array} { l } 
\text { Wages } \
\text { expense }
\end{array} & \
\hline \begin{array} { l } 
\text { Long-term notes } \
\text { payable }
\end{array} & & \begin{array} { l } 
\text { Interest } \
\text { expense }
\end{array} & \
\hline \begin{array} { l } 
\text { Retained } \
\text { earnings }
\end{array} && \begin{array} { l } 
\text { Cost of goods } \
\text { sold }
\end{array} & \
\hline
\end{array}$$

Accepted Answer

$$\begin{array} { | l | c | l | c | } 
\hline  { \begin{array} { c } 
\text { Account } \
\text { title }
\end{array} } & \begin{array} { c } 
\text { Account } \
\text { number }
\end{array} & \text { Account title } & \begin{array} { c } 
\text { Account } \
\text { number }
\end{array} \
\hline \text { Supplies } & 104 & \text { Sales } & 601 \
\hline \text { Equipment } & 202 & \begin{array} { l } 
\text { Sales } \
\text { discounts }
\end{array} & 604 \
\hline \begin{array} { l } 
\text { Wages } \
\text { payable }
\end{array} & 301 & \begin{array} { l } 
\text { Wages } \
\text { expense }
\end{array} & 705 \
\hline \begin{array} { l } 
\text { Long-term notes } \
\text { payable }
\end{array} & 401 & \begin{array} { l } 
\text { Interest } \
\text { expense }
\end{array} & 801 \
\hline \begin{array} { l } 
\text { Retained } \
\text { earnings }
\end{array} & 501 & \begin{array} { l } 
\text { Cost of goods } \
\text { sold }
\end{array} & 703 \
\hline
\end{array}$$

Question 3

Which of the following requires the most human judgment?

Accepted Answer

A)  Accounting. 
B)  Bookkeeping. 
C)  Posting. 
D)  Journalizing. 
A)  Accounting. 
B)  Bookkeeping. 
C)  Posting. 
D)  Journalizing. A

Question 4

Which of the following is most likely to employ sequential coding?

Accepted Answer

A)  Amounts on a cash register tape. 
B)  Chart of accounts. 
C)  License plate numbers. 
D)  Street addresses. 
A)  Amounts on a cash register tape. 
B)  Chart of accounts. 
C)  License plate numbers. 
D)  Street addresses.

Question 5

Company A's chart of accounts contains the following: Cash (101), Accounts receivable (102), inventory (103), equipment (201), accounts payable (301). Company B's chart of accounts shows: Wages payable (112), Taxes payable (113), Retained earnings (114). Which of the following is true?

Accepted Answer

A)  Company A uses block coding; Company B uses sequential coding. 
B)  Company A uses sequential coding; Company B uses hierarchical coding. 
C)  Both Company A and Company B use block coding. 
D)  Both Company A and Company B use sequential coding. 
A)  Company A uses block coding; Company B uses sequential coding. 
B)  Company A uses sequential coding; Company B uses hierarchical coding. 
C)  Both Company A and Company B use block coding. 
D)  Both Company A and Company B use sequential coding.

Question 6

Accounting and bookkeeping comparison
Indicate whether each of the following statements applies to: (a) accounting alone, (b) bookkeeping alone, (c) both accounting and bookkeeping or (d) neither accounting nor bookkeeping.
_____ Subject to internal controls
_____ Requires analysis
_____ Primarily involves cyclical activities
_____ Involves human judgment
_____ Focuses on economic information
_____ Defined by American Accounting Association
_____ Concerned with measuring
_____ Can incorporate computers
_____ Can be principles-based
_____ Always involves information technology

Accepted Answer

C - Subject to internal controls
C - Req

Question 7

Which of the following forms of internal control relies most heavily on human judgment?

Accepted Answer

A)  Preparing a trial balance. 
B)  Enforcing transaction limits. 
C)  Numbering documents sequentially. 
D)  Locking a filing cabinet. 
A)  Preparing a trial balance. 
B)  Enforcing transaction limits. 
C)  Numbering documents sequentially. 
D)  Locking a filing cabinet.

Question 8

Which of the following is not a coding system for a chart of accounts?

Accepted Answer

A)  Alphabetic. 
B)  Sequential. 
C)  Block. 
D)  Mnemonic. 
A)  Alphabetic. 
B)  Sequential. 
C)  Block. 
D)  Mnemonic.

Question 9

Chart of accounts coding
Bumble Beasley attempted to design a hierarchical chart of accounts in the following format: x.y.z. "X" stands for the type of account (1 = asset, 2= liability, etc.), while "Y" indicates whether the account is current (1) or non-current (2). If the current/non-current designation doesn't apply, "Y" is the number "zero." "Z" identifies the specific account. He developed the following account numbers:
Identify the accounts that are correctly coded. $$\begin{array} { | l | l | } 
\hline 2.1 .1 & \text { Accounts payable } \
\hline 3.1 .1 & \text { Capital stock } \
\hline 1.1 .1 & \text { Cash } \
\hline 3.0 .1 & \text { Cost of goods sold } \
\hline 4.0 .2 & \text { Depreciation expense } \
\hline 1.2 .2 & \text { Equipment } \
\hline 1.1 .3 & \text { Interest payable } \
\hline 2.1 .2 & \text { Inventory } \
\hline 3.2 .1 & \text { Land } \
\hline 2.2 .1 & \text { Long-term notes payable } \
\hline 3.0 .1 & \text { Retained earnings } \
\hline 4.1 .1 & \text { Sales } \
\hline
\end{array}$$

Accepted Answer

Correctly coded accounts are:

Question 10

A "uniform chart of accounts" means:

Accepted Answer

A)  All accounts have the same number. 
B)  The chart of accounts was developed without human intervention. 
C)  A company and its subsidiaries use the same chart of accounts. 
D)  The chart of accounts uses block coding. 
A)  All accounts have the same number. 
B)  The chart of accounts was developed without human intervention. 
C)  A company and its subsidiaries use the same chart of accounts. 
D)  The chart of accounts uses block coding.

Question 11

RKH Corporation reported a cash balance of $10,000 on its 12/31/2006 balance sheet. We can therefore assume:

Accepted Answer

A)  The company's cash flow from operations was $10,000. 
B)  The company's cash flow from operations was less than $10,000. 
C)  The company's cash flow from operations was more than $10,000. 
D)  Nothing about the company's cash flow from operations. 
A)  The company's cash flow from operations was $10,000. 
B)  The company's cash flow from operations was less than $10,000. 
C)  The company's cash flow from operations was more than $10,000. 
D)  Nothing about the company's cash flow from operations.

Question 12

Which of the following best explains "transaction limits" as an internal control?

Accepted Answer

A)  Two signatures are required on all checks. 
B)  A bank teller needs management approval to accept deposits over $500. 
C)  Purchasing agents cannot complete more than six purchase orders each day. 
D)  Sales staff must verify a client's credit before making a sale. 
A)  Two signatures are required on all checks. 
B)  A bank teller needs management approval to accept deposits over $500. 
C)  Purchasing agents cannot complete more than six purchase orders each day. 
D)  Sales staff must verify a client's credit before making a sale.

Question 13

Which of the following best distinguishes adjusting entries from closing entries?

Accepted Answer

A)  Adjusting entries involve only balance sheet accounts; closing entries involve only income statement accounts. 
B)  Closing entries cannot be journalized using information technology, while adjusting entries can. 
C)  Adjusting entries happen before preparing financial statements; closing entries occur after preparing financial statements. 
D)  In adjusting entries, debits must equal credits; in closing entries, debits should be greater than credits. 
A)  Adjusting entries involve only balance sheet accounts; closing entries involve only income statement accounts. 
B)  Closing entries cannot be journalized using information technology, while adjusting entries can. 
C)  Adjusting entries happen before preparing financial statements; closing entries occur after preparing financial statements. 
D)  In adjusting entries, debits must equal credits; in closing entries, debits should be greater than credits.

Question 14

In RKH Corporation's chart of accounts, the account number for cash is "1.1.1," while the account number for "land" is "1.2.1." From that information, we can infer that:

Accepted Answer

A)  RKH uses mnemonic coding in its chart of accounts. 
B)  The middle digit distinguishes current assets from long-term assets. 
C)  RKH employs information technology in its accounting information system. 
D)  No other company utilizes RKH's system for chart of accounts coding. 
A)  RKH uses mnemonic coding in its chart of accounts. 
B)  The middle digit distinguishes current assets from long-term assets. 
C)  RKH employs information technology in its accounting information system. 
D)  No other company utilizes RKH's system for chart of accounts coding.

Question 15

Match between columns
                        Premises:  Subject to internal controls
 Requires analysis
 Primarily involves cyclical activities
 Involves human judgment
 Focuses on economic information
 Defined by American Accounting Association
 Concerned with measuring
 Can incorporate computers
 Can be principles-based
 Always involves information technology

Accepted Answer

The Answer of accounting alone and bookkeeping alone and both is...

Question 16

RKH Corporation wants to design its chart of accounts to facilitate the use of information technology in its closing entries. Which coding system should RKH use?

Accepted Answer

A)  Mnemonic. 
B)  Block. 
C)  Sequential. 
D)  Random. 
A)  Mnemonic. 
B)  Block. 
C)  Sequential. 
D)  Random.

Question 17

Which of the following describes a difference between sequential coding and block coding?

Accepted Answer

A)  Sequential coding uses letters; block coding uses numbers. 
B)  Block coding uses letters; sequential coding uses numbers. 
C)  Sequential coding cannot be used for a chart of accounts, while block coding can. 
D)  Individual digits and groups of digits have meaning in block coding, but not in sequential coding. 
A)  Sequential coding uses letters; block coding uses numbers. 
B)  Block coding uses letters; sequential coding uses numbers. 
C)  Sequential coding cannot be used for a chart of accounts, while block coding can. 
D)  Individual digits and groups of digits have meaning in block coding, but not in sequential coding.

Question 18

Which type of coding system helps users remember the meaning of the code?

Accepted Answer

A)  Sequential. 
B)  Hierarchical. 
C)  Mnemonic. 
D)  Block. 
A)  Sequential. 
B)  Hierarchical. 
C)  Mnemonic. 
D)  Block.

Question 19

Information technology would be least useful for:

Accepted Answer

A)  Designing internal controls. 
B)  Eliminating human judgment. 
C)  Calculating depreciation. 
D)  Auditing. 
A)  Designing internal controls. 
B)  Eliminating human judgment. 
C)  Calculating depreciation. 
D)  Auditing.

Question 20

A company's chart of accounts is block coded and contains the following information: Accounts payable (201), Wages payable (204), Interest payable (207). The account number for "accounts receivable" is therefore likely to be:

Accepted Answer

A)  302. 
B)  211. 
C)  202. 
D)  102. 
A)  302. 
B)  211. 
C)  202. 
D)  102.

Accounting is often confused with:

Which of the following requires the most human judgment?

Which of the following is most likely to employ sequential coding?

Company A's chart of accounts contains the following: Cash (101), Accounts receivable (102), inventory (103), equipment (201), accounts payable (301). Company B's chart of accounts shows: Wages payable (112), Taxes payable (113), Retained earnings (114). Which of the following is true?

Which of the following forms of internal control relies most heavily on human judgment?

Which of the following is not a coding system for a chart of accounts?

A "uniform chart of accounts" means:

RKH Corporation reported a cash balance of $10,000 on its 12/31/2006 balance sheet. We can therefore assume:

Which of the following best explains "transaction limits" as an internal control?

Which of the following best distinguishes adjusting entries from closing entries?

In RKH Corporation's chart of accounts, the account number for cash is "1.1.1," while the account number for "land" is "1.2.1." From that information, we can infer that:

RKH Corporation wants to design its chart of accounts to facilitate the use of information technology in its closing entries. Which coding system should RKH use?

Which of the following describes a difference between sequential coding and block coding?

Which type of coding system helps users remember the meaning of the code?

Information technology would be least useful for:

A company's chart of accounts is block coded and contains the following information: Accounts payable (201), Wages payable (204), Interest payable (207). The account number for "accounts receivable" is therefore likely to be:

Rolse and Purpose of Accountig Information Systems

Professionalisam and Ethics

Internal Controls

Flow Charting

Data Flow Diagramming

Real Modeling

XBRL

Business and Enterprise Resource Planning Systems

Salles - Collection Process

Acquestion Payment Process

Other Business Process

Bussiness Process Mamagement

Computer Crime and Information Technology Security

Dicision Making Models and Knowledge Management

Professional Certifications and Career Planning

Auditing and Evaluating the AIS

Filters

Exam 2: Transaction Processing in the AIS

Accounting is often confused with:

Which of the following requires the most human judgment?

Which of the following is most likely to employ sequential coding?

Company A's chart of accounts contains the following: Cash (101), Accounts receivable (102), inventory (103), equipment (201), accounts payable (301). Company B's chart of accounts shows: Wages payable (112), Taxes payable (113), Retained earnings (114). Which of the following is true?

Which of the following forms of internal control relies most heavily on human judgment?

Which of the following is not a coding system for a chart of accounts?

A "uniform chart of accounts" means:

RKH Corporation reported a cash balance of $10,000 on its 12/31/2006 balance sheet. We can therefore assume:

Which of the following best explains "transaction limits" as an internal control?

Which of the following best distinguishes adjusting entries from closing entries?

In RKH Corporation's chart of accounts, the account number for cash is "1.1.1," while the account number for "land" is "1.2.1." From that information, we can infer that:

RKH Corporation wants to design its chart of accounts to facilitate the use of information technology in its closing entries. Which coding system should RKH use?

Which of the following describes a difference between sequential coding and block coding?

Which type of coding system helps users remember the meaning of the code?

Information technology would be least useful for:

A company's chart of accounts is block coded and contains the following information: Accounts payable (201), Wages payable (204), Interest payable (207). The account number for "accounts receivable" is therefore likely to be:

Rolse and Purpose of Accountig Information Systems

Professionalisam and Ethics

Internal Controls

Flow Charting

Data Flow Diagramming

Real Modeling

XBRL

Business and Enterprise Resource Planning Systems

Salles - Collection Process

Acquestion Payment Process

Other Business Process

Bussiness Process Mamagement

Computer Crime and Information Technology Security

Dicision Making Models and Knowledge Management

Professional Certifications and Career Planning

Auditing and Evaluating the AIS

Filters