Deck 14: General Ledger and Reporting System

Question 1

There are four basic activities performed in the general ledger and reporting system.Several of these activities represent the basic steps in the accounting cycle.In what step is the adjusted trial balance prepared?

A)update the general ledger
B)post adjusting entries
C)prepare financial statements
D)produce managerial reports

Answer 1

B

Question 2

A listing of journal vouchers by numerical sequence,account number,or date is an example of

A)a general ledger control report.
B)a budget report.
C)a batch to be processed.
D)responsibility accounting.

Answer 2

A

Question 3

Who provides the adjusting entries for a well-designed general ledger and reporting system?

A)various user departments
B)the treasurer's area
C)the other major AIS subsystems
D)the controller's area

Answer 3

D

Question 4

Entries to update the general ledger are often documented by which of the following?

A)general journal
B)subsidiary journal
C)subsidiary ledgers
D)journal vouchers

Question 5

Adjusting entries that are made to counteract the effects of errors found in the general ledger are called

A)accruals.
B)corrections.
C)deferrals.
D)estimates.

Question 6

The recording of interest earned on an account balance or wages payable is an example of which type of adjusting journal entry?

A)accrual entry
B)deferral entry
C)revaluation entry
D)correcting entry

Question 7

When updating the general ledger,sales,purchases,and production are examples of __________ entries,and issuance or retirement of debt and the purchase or sale of investment securities are examples of __________ entries.

A)adjusting; controller originated
B)accounting subsystem; treasurer originated
C)adjusting; special journal
D)controller generated; special journal

Question 8

The preparation of financial statements is the third activity in the general ledger system.To properly complete the accounting cycle,financial statements are prepared in a certain sequence.Which statement is prepared last in the sequence?

A)the adjusted trial balance
B)the income statement
C)the balance sheet
D)the statement of cash flows

Question 9

Immediately after the adjusting entries are completed,the next step in the general ledger and reporting system is to prepare

A)an adjusted trial balance.
B)a closing entry.
C)a worksheet.
D)the statement of cash flows.

Question 10

In accounting terminology,the form that documents journal entry updates to the general ledger is called

A)a trial balance.
B)an adjusted trial balance.
C)a journal voucher.
D)an accounting update memo.

Question 11

The first activity in the general ledger system is to update the general ledger.Updates come from the various accounting subsystems as well as from the treasurer.How is general ledger updating accomplished by the various accounting subsystems?

A)Individual journal entries for each accounting subsystem transaction update the general ledger every 24 hours.
B)Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger.
C)The controller or treasurer must approve accounting subsystem journal entries before any updating may occur.
D)Nonroutine transactions are entered into the system by the treasurer's office.

Question 12

Which item below is not considered a major input to the general ledger and reporting system?

A)summary entries from the major subsystems
B)reports from managers
C)adjusting entries
D)financing and investing activities

Question 13

Adjusting entries that reflect events that have already occurred but for which no cash flow has taken place and not previously entered into the accounts are called

A)accruals.
B)deferrals.
C)revaluations.
D)corrections.

Question 14

The posting of adjusting journal entries is the second activity found in the general ledger system.Adjusting entries fall into several categories.An adjusting entry made at the end of an accounting period that reflects the exchange of cash prior to performance of a related event is called a(n)

A)accrual entry.
B)deferral entry.
C)revaluation entry.
D)correcting entry.

Question 15

Depreciation and bad debts expense are examples of which type of adjusting entries?

A)deferrals
B)accruals
C)revaluations
D)estimates

Question 16

The general ledger and reporting system is designed to provide information for which of the following user groups?

A)internal users
B)external users
C)inquiry processing by internal or external users
D)all of the above

Question 17

The general ledger and reporting system consists of the __________ involved in __________ the general ledger and __________ reports.

A)business transactions; updating; processing
B)data processing; business transactions for; printing
C)information processing; updating; creating
D)business transactions; data processing; preparing

Question 18

Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called

A)reconciliations.
B)revaluations.
C)estimates.
D)accruals.

Question 19

Corrections are entries made to correct errors found in __________.

A)all journals.
B)special journals.
C)the general ledger.
D)the financial statements.

Question 20

The general ledger system of an organization should be designed to serve the information requirements of both financial and nonfinancial users.This means that the system should

A)support producing regular periodic reports.
B)support the real-time inquiry needs of all users.
C)support producing regular periodic reports and respond to real-time inquiry needs.
D)support access by investors and creditors of the organization to general ledger balances.

Question 21

Cost center reports compare actual versus budget regarding __________ costs.

A)controllable
B)noncontrollable
C)fixed
D)variable

Question 22

Journal entries made by either the treasurer or controller should be subject to input edit and processing controls.A check that can be made to ensure that the amount field in a journal entry contains only numeric data is called a __________.

A)validity check
B)field or format check
C)zero-balance check
D)sign check

Question 23

The edit check that verifies the ending balance of an account in fact fully reflects the beginning balance and all debit and credit entries made thereafter is referred to as a

A)run-to-run total.
B)completeness check.
C)closed loop verification.
D)zero balance check.

Question 24

Communications technology and the Internet can be used to reduce the time and costs involved in disseminating financial statement information.Users of such financial information still struggle in that many recipients have different information delivery requirements and may have to manually reenter the information into their own decision analysis tools.The ideal solution to solve these problems and efficiently transmit financial information via the Internet is to use

A)HTML code.
B)XML.
C)the pdf file format.
D)XBRL.

Question 25

Budgets and performance reports should be developed on the basis of

A)responsibility accounting.
B)generally accepted accounting principles.
C)financial accounting standards.
D)managerial accounting standards.

Question 26

Various budgets can be produced for planning and evaluating performance within an organization.The operating budget

A)compares estimated cash flows from operations with planned expenditures.
B)shows cash inflows and outflows for each project.
C)depicts planned revenues and expenditures for each organizational unit.
D)is used for the purchase and retirement of property,plant,and equipment.

Question 27

Reconciliation and control reports can help detect whether any errors have been made during the process of updating the general ledger.One reconciliation that indicates whether the sum of debit balances is equal to the sum of credit balances in the general ledger is commonly known as

A)a trial balance.
B)a completeness test.
C)a closed-loop verification.
D)a general journal listing.

Question 28

Concerning the reporting environment,which of the following statements is not true?

A)Many companies can submit required financial and tax fillings electronically to the SEC and IRS.
B)Management reports are usually developed in spreadsheets and disseminated either through e-mail or by posting on the company intranet.
C)For many companies,the electronic dissemination of reports containing financial information has been an efficient process for some time.
D)Many companies post their financial statements on their corporate web sites.

Question 29

Variances for variable costs will be misleading when the planned output differs from budgeted output.A solution to this problem would be

A)calling all costs fixed.
B)to use flexible budgeting.
C)better prediction of output.
D)to eliminate the budgeting process.

Question 30

The final activity in the general ledger and reporting system is the production of various managerial reports.The report that shows planned cash inflows and outflows for each project is the

A)journal voucher list.
B)statement of cash flows.
C)operating budget.
D)capital expenditures budget.

Question 31

This report indicates whether the total debits equal the total credits posted to the general ledger.

A)a trial balance.
B)a completeness test.
C)a closed-loop verification.
D)a general journal listing.

Question 32

Concerning XBRL,which of the following statements is not true?

A)XBRL is a variant of XML.
B)XBRL is specifically designed for use in communicating the content of financial data.
C)XBRL creates unique tags for each data item.
D)XBRL's adoption means accountants and systems professionals must know how to write XBRL code to take advantage of its benefits.

Question 33

Which of the following tasks are accomplished by following the audit trail?

A)trace a transaction from original source document to the general ledger to a report
B)trace an item in a report back through the general ledger to the original source
C)trace all changes in the general ledger from beginning to ending balances
D)All of the above are correct.

Question 34

One way of ensuring that recurring adjusting journal entries that are needed each month are in fact made each month would be

A)to make all the entries a month in advance.
B)to rotate the responsibility among the accounting staff.
C)to program the entries to be made automatically.
D)to create a standard adjusting journal entry file.

Question 35

Departments that mostly provide services to other units and charge those units for services rendered should be viewed as __________ centers.

A)cost
B)profit
C)investment
D)revenue

Question 36

A type of edit check that would ensure that entries are made to existing general ledger accounts is called a(n)__________ check.

A)validity
B)existence
C)closed loop verification
D)field

Question 37

Which of the following would be an effective control for achieving the general control objectives in the general ledger and reporting system?

A)using well-designed documents and records
B)online data entry with the use of appropriate edit checks
C)prenumbering documents and accounting for the sequence numbers
D)All of the above are appropriate.

Question 38

Sales departments are most likely to be evaluated as ______ centers

A)cost
B)profit
C)investment
D)revenue

Question 39

The benefits of XBRL include:

A)XBRL enables organizations to publish financial information only once,using standard XBRL tags.
B)XBRL tagged information is interpretable and doesn't need to be re-entered by users.
C)Both are benefits of XBRL
D)Neither are benefits of XBRL

Question 40

Most budgets compare a standard budget amount to actual amounts that reflect the true performance of the organization.The budget standard is often a fixed target; however,given that these amounts are static,the budget does not account for unforeseen changes in the operating environment.A solution to this type of problem is to use a(n)

A)operating budget.
B)capital expenditures budget.
C)cash flow budget.
D)flexible budget.

Question 41

Cheryl Liao is an accountant at Folding Squid Technologies.While making an adjusting entry to the general ledger,she received the following error message,"The account number referenced in your journal entry does not exist.Do you want to create a new account?" This message was the result of a

A)validity check.
B)field check.
C)zero-balance check.
D)completeness test.

Question 42

Which statement below about data warehouses and data marts is true?

A)The typical size of a data warehouse is small.
B)Data warehouses may replace the transaction processing databases of an organization.
C)A data warehouse or data mart complements the other databases within the organization by providing support for strategic decision making.
D)Data marts can be used for transaction processing.

Question 43

Which one of the following four general ledger activities is not concerned with the preparation of traditional financial statements?

A)Post adjusting entries
B)Produce managerial reports
C)Update general ledger
D)Prepare financial statements

Question 44

Adjusting entries that are made to adjust for the effects of errors made in previous entries are called

A)corrections.
B)estimates.
C)deferrals.
D)accruals.
E)revaluations.

Question 45

A report containing measures that relate to the financial,internal operation,customer,and innovation and learning perspectives of an organization is called a(n)

A)ERP.
B)AIS.
C)balanced scorecard.
D)data warehouse.

Question 46

Which of the following techniques is not used in data mining?

A)statistical analysis
B)artificial intelligence
C)expert systems
D)neural networks

Question 47

A financial data warehouse provides support for strategic decision making because it

A)consolidates current financial data.
B)contains both current and historical financial data.
C)contains current financial and operational data.
D)summarizes historical data.

Question 48

Adjusting entries that are made to recognize depreciation over the period are called

A)corrections.
B)estimates.
C)deferrals.
D)accruals.
E)revaluations.

Question 49

To support the strategic decision-making requirements of organizations,a separate database may be created and maintained.The name used for such a database depends on its size.What is the smaller version of such a database called?

A)a data warehouse
B)a data mart
C)a data store
D)a database management system

Question 50

The process of accessing the data contained in a data warehouse and using it for strategic decision making is often referred to as:

A)artificial intelligence
B)business intelligence
C)data mart
D)data warehousing

Question 51

Adjusting entries that are made to recognize revenue that has been received but not yet earned are called

A)corrections.
B)estimates.
C)deferrals.
D)accruals.
E)revaluations.

Question 52

Adjusting entries to the general ledger are typically provided by the

A)budget department.
B)controller.
C)treasurer.
D)chief executive officer.

Question 53

Adjusting entries that are made to recognize revenue that has been earned but not yet received are called

A)corrections.
B)estimates.
C)deferrals.
D)accruals.
E)revaluations.

Question 54

Which of the following is not one of the basic principles that make bar charts easy to read?

A)Include data values with each element.
B)Use 3-D rather than 2-D bars to make reading easier.
C)Use colors or shades instead of patterns to represent different variables.
D)Use titles that summarize the basic message.

Question 55

Information about financing and investing activities for use in making general ledger entries is typically provided by the

A)budget department.
B)controller.
C)treasurer.
D)chief executive officer.

Question 56

Which one of the following measures four dimensions of performance?

A)human resources accounting
B)social responsibility accounting
C)a balanced scorecard
D)integrated databases

Question 57

Which one of the following dimensions provides measures on how efficiently and effectively the organization is performing key business processes?

A)financial
B)internal operations
C)innovations and learning
D)customer perspectives

Question 58

Extensible Business Reporting Language is based on

A)HTML.
B)TCP/IP.
C)XML.
D)XL.

Question 59

Cheryl Liao is an accountant at Folding Squid Technologies.While making an adjusting entry to the general ledger,she received the following error message,"Your journal entry must be a numeric value.Please reenter." This message was the result of a

A)validity check.
B)field check.
C)zero-balance check.
D)completeness test.

Question 60

Adjusting entries that reflect a change in accounting principle used to value inventories are called

A)corrections.
B)estimates.
C)deferrals.
D)accruals.
E)revaluations.

Question 61

What are the control objectives in the general ledger and reporting system?

Question 62

When a manager performs tests of hypothesized relationships by querying a database,she is using

A)data mining.
B)object linking and embedding (OLE.)
C)data marting.
D)online analytical processing (OLAP.)

Question 63

How is a balanced scorecard used to assess organizational performance?

Question 64

What is a journal voucher file? What is the purpose of this file?

Question 65

Business intelligence refers to the

A)use of industrial espionage to capture data about competitors.
B)use of data contained in a data warehouse for strategic planning.
C)publications provided by industry consultants and news letters.
D)systematic application of online search engines like Google to identify industry-specific trends and benchmarks.

Question 66

What are the four basic activities involved in the general ledger and reporting system?

Question 67

When a manager uses statistical methods and artificial intelligence to search for patterns in a database,she is performing

A)data mining.
B)object linking and embedding (OLE.)
C)data marting.
D)online analytical processing (OLAP.)

Question 68

Cheryl Liao is an accountant at Folding Squid Technologies.While making an adjusting entry to the general ledger,she received the following error message when she tried to save her entry,"The amounts debited and credited are not equal.Please correct and try again." This message was the result of a

A)validity check.
B)field check.
C)zero-balance check.
D)completeness test.

Question 69

Bobby Burns,CEO of Maudlin Motors,walked into the office of Tom Sanchez,chief information officer."Tom," he said."We have tons of data about customers,vendors,production,everything,but I don't think we're using it as well as we could.I'm thinking that we could analyze the data and try to find any patterns or relationships that would help us plan for the future." Tom should recommend that Maudlin Motors

A)implement a data mining operation.
B)set up an object linking and embedding function.
C)use online analytical processing (OLAP.)
D)implement balanced scorecard reorting.

Question 70

Bobby Burns,CEO of Maudlin Motors,walked into the office of Tom Sanchez,chief information officer."Tom," he said."We need some way of getting a better handle on our overall performance.The financial reports are all well and good,but we need to track customer satisfaction and other aspects of the business." Tom should recommend that Maudlin Motors

A)implement a data warehouse system.
B)set up a data mining operation.
C)use online analytical processing (OLAP.)
D)implement balanced scorecard reporting.

Question 71

Bobby Burns,CEO of Maudlin Motors,walked into the office of Tom Sanchez,chief information officer."Tom," he said."We need some way of improving our overall performance.I'm thinking that if all top managers could perform queries on data from the past few years in order to draw conclusions about our strategic direction for the future,we would be on our way." Tom should recommend that Maudlin Motors

A)implement a data mining operation.
B)set up an object linking and embedding function.
C)use online analytical processing (OLAP.)
D)implement balanced scorecard reorting.

Question 72

Explain the benefits of XBRL.

Question 73

Which of the following is the most common violation of the principles of good graph design?

A)Showing data in reverse chronological order
B)Starting the horizontal axis at a value other than zero
C)Starting the vertical axis at a value other than zero
D)Use of titles that do not accurately describe the data that is plotted on the graph.

Question 74

What is responsibility accounting?

Question 75

Describe three threats in the general ledger and reporting system and identify corresponding controls for each threat.

Question 76

What is a general ledger and reporting system?

Question 77

Discuss the value and role of budgets as managerial reports.

Question 78

What is data mining? Give an example of how it is used.

Question 79

Cheryl Liao is an accountant at Folding Squid Technologies.While making an adjusting entry to the general ledger,she received the following error message when she tried to save her entry,"The data you have entered does not include a source reference code.Please enter this data before saving." This message was the result of a

A)validity check.
B)field check.
C)zero-balance check.
D)completeness test.

Question 80

How is an audit trail used in the general ledger and reporting system?