Deck 3: Essential Elements and Basic Activities of Accounting Systems

Question 1

Which of the following financial statements reports the profitability of an organization for a stated period of time such as a month or a year?

A) Statement of Changes in Ownership Equity
B) Statement of Income
C) Balance Sheet
D) Statement of Cash Flows

Answer 1

B

Question 2

In which journal would you most likely record accrued interest receivable?

A) General journal
B) Purchases journal
C) Sales journal
D) Cash disbursements journal

Answer 2

A

Question 3

What type of file contains invoice data for which payment has not yet been received?

A) Transaction
B) Master
C) Open
D) Reference

Answer 3

C

Question 4

What is another name for the accounts in a chart of accounts?

A) Transaction accounts
B) Control accounts
C) Master accounts
D) General ledger accounts

Question 5

What is the main advantage of special journals in a paper-based accounting system?

A) Reduction in time required
B) Increased computer processing speed
C) Reduction in documentation required
D) Decreased emphasis on controls

Question 6

What type of file is set up during a processing operation and is purged when the operation is completed?

A) Backup file
B) Archive file
C) Scratch file
D) Program file

Question 7

Which file stores data to be used repeatedly for processing transactions?

A) Reference file
B) Open file
C) Program file
D) Master file

Question 8

When preparing a customer invoice, which document could be used as the source for the ship date?

A) Bill of lading
B) Receiving report
C) Vendor invoice
D) Purchase order

Question 9

Which of the following data elements would NOT be on a purchase order?

A) Quantity ordered
B) Invoice number
C) Vendor number
D) Product number

Question 10

What type of account in the general ledger has a related subsidiary ledger?

A) Detail
B) Chart
C) Control
D) General

Question 11

Which of the following is an example of an internally generated source document?

A) Debit memo from bank
B) Remittance advice
C) Employee time card
D) Customer purchase order

Question 12

Which of the following can save time in recording and posting a credit sale?

A) General journal
B) Purchases journal
C) Payroll journal
D) Sales journal

Question 13

Which of the following is the best reason for keeping subsidiary ledger accounts current?

A) To compute liquidity ratios
B) To prepare financial statements
C) To check if a sale will exceed a customer's credit limit
D) All of the above

Question 14

Below are some of the basic activities in a paper-based accounting system:
i. Post (copy) data from journals to the appropriate accounts in the general ledger
ii. Record transactions in the appropriate journals
iii. Post (copy) data from journals to the appropriate accounts in the subsidiary ledgers
iv. Complete source documents

A) iv, ii, iii, i
B) ii, i, iii, iv
C) iv, ii, i, iii
D) ii, iv, iii, i

Question 15

Which of the following is not a typical special journal used for recording transactions?
A Sales
B) Customer
C) Cash disbursements
D) Cash receipts

Question 16

What type of file is used to store data about transactions that have been started but not completed?

A) Transaction
B) Master
C) Open
D) Reference

Question 17

The chart of accounts file is what type of file?

A) Open file
B) Reference file
C) Transaction file
D) Program file

Question 18

Financial statements are presented in a particular format and contain certain data items as dictated by which of the following?

A) Industry standards
B) Generally accepted accounting principles
C) The organization's accounting policies
D) All of the above

Question 19

In which of the following journal(s) would a cash sale be recorded?

A) Sales
B) Cash disbursements
C) Cash receipts
D) Both A and C

Question 20

Which of the following data elements are essential in a journal?

A) Transaction date, explanation, and dollar amount of each debit and credit
B) Dollar amount of each debit and credit, account name and number, and explanation
C) Transaction date, dollar amount of each debit and credit, and account name and number
D) Account name and number, transaction date, and unique identifier for the transaction

Question 21

Which of the following systems is one where the master and open files are posted, or updated, immediately?

A) Microcomputer system
B) Mainframe computer system
C) Batch system
D) Real-time system

Question 22

What is the main purpose of a general ledger master file?

A) To store account balances to be presented in reports
B) To match up account numbers in files
C) To store temporary records pertaining to a group of like transactions
D) To store detailed information about subsidiary ledger control accounts

Question 23

Accountants and other users are generally concerned with which type of file organization?

A) Logical
B) Physical
C) Functional
D) Magnetic

Question 24

Which of the following statements about particular data files is correct?

A) Transaction files correspond to paper ledgers in paper-based accounting systems.
B) Master files correspond to the paper journals in paper-based accounting systems.
C) Transaction files are a hybrid of master files and open files.
D) The general ledger master file stores the account balances reported on the financial statements.

Question 25

What file in a computerized accounting system corresponds to a paper general ledger in a paper-based system?

A) Transaction file
B) Master file
C) Open file
D) Program file

Question 26

Which of the following methods can be used to create a transaction file?

A) Keying in or scanning data found on source documents
B) Transmitting data electronically
C) Extracting data from master files or open files
D) All of the above can be used.

Question 27

What file in a computerized accounting system corresponds to a paper subsidiary ledger in a paper-based system?

A) Transaction file
B) Master file
C) Open file
D) Reference file

Question 28

Which of the following statements about posting, or updating, is correct?

A) Real-time posting updates the appropriate master files immediately upon entry of transaction data in the system.
B) Batch posting updates the appropriate master files immediately upon entry of transaction data into the system.
C) Batch posting has advantages in situations in which data must be current.
D) In a real-time posting, the transaction data are accumulated in a transaction file until the end of the accounting period.

Question 29

What file in a computerized accounting system corresponds to documents awaiting further processing in a paper-based system?

A) Transaction file
B) Master file
C) Open file
D) Reference file

Question 30

Which of the following is not a current trend in computerized accounting systems?

A) A point-of-sale terminal in a sales department
B) An automated teller machine in a bank
C) An electronic time clock located in an operating facility
D) A spreadsheet report of financial information

Question 31

Which of the following is the most expensive method for creating a transaction file?

A) Keying in or scanning data found on source documents
B) Transmitting data electronically
C) Extracting data from master files or open files
D) All of the above

Question 32

The following symbolic representation indicates a file update, or posting.
What is the type of file on the left side of the posting process represented by the letter (b)?

A) Master file
B) Open file
C) Parameter file
D) Transaction file

Question 33

Which of the following would least likely benefit from real-time posting?

A) Bank account balances
B) Property and depreciation
C) Customer accounts receivable
D) Merchandise inventory

Question 34

Which file can update a subsidiary ledger master file?

A) Customer invoice open file
B) Customer master file
C) Transaction file
D) Inventory master file

Question 35

What type of file provides a permanent record of the transactions recorded during an accounting period?

A) Transaction file
B) Master
C) Open file
D) Archive file

Question 36

In regard to real-time and batch posting, or updating, which of the following statements is correct?

A) Real-time posting is always preferred because batch posting is slow.
B) A system may use both kinds of posting.
C) A system can do one kind of posting or the other, not both.
D) A system will NOT use batch posting if the system is installed on a mainframe computer.

Question 37

Which of the following is a characteristic of real-time posting/updating?

A) Real-time posting provides for the immediate update of the master file upon entering of transaction data.
B) Real-time posting preceded batch posting because of its simplicity.
C) Real-time posting results in systems that are sensitive to error contamination.
D) Both A and C are characteristics of real-time posting/updating.

Question 38

What file in a computerized accounting system corresponds to a paper journal in a paper- based system?

A) Transaction file
B) Master file
C) Open file
D) Reference file

Question 39

Which data element most likely would not be included in the Investment Securities master file?

A) Security code
B) Cost
C) Name
D) Purchase order number

Question 40

Which of the following is a use of the chart of accounts reference file?

A) To store data about completed transactions
B) To determine if an account number is valid
C) To store data about incomplete transactions
D) To store temporary data for processing

Question 41

Which of the following statement(s) about real-time posting is (are) correct?

A) Real-time posting requires more computer and personnel resources than batch posting.
B) With real-time posting one single error may result in numerous errors.
C) Real-time posting allows users to have updated information throughout the business day.
D) All of these are true about real-time posting.

Question 42

What happens to the size (number of records) of the open customer invoice file when it is updated to reflect the customer's payment of an outstanding invoice?

A) Cannot be determined
B) Remains the same
C) Decreases
D) Increases

Question 43

Which of the following defines a transaction file?

A) The equivalent of a subsidiary ledger in a manual system
B) A file that has one record for each inventory item
C) The equivalent of a journal in a manual system
D) The equivalent of a reference file in a manual system

Question 44

What file in a computerized system is equivalent to the accounts payable subsidiary ledger in a manual system?

A) Vendor master file
B) General ledger master file
C) Sales order open file

Question 45

Which of the following defines a master file in a computerized system?

A) A file for storing data on pending items such as sales orders
B) A file for storing data on day-to-day operations such as sales
C) A file for storing detailed information about general ledger control accounts (similar to a subsidiary ledger)
D) A file for storing backup data

Question 46

What file in a computerized accounting system corresponds to a sub-ledger (such as accounts receivable) in a paper-based system?

A) Transaction file.
B) Master file.
C) Open file.
D) Reference file.

Question 47

Which of the following is (are) a typical transaction file(s) in a computerized system?

A) Cash receipts
B) General journal
C) Sales
D) All of these are typical transaction files in a computerized system.

Question 48

What file in a computerized accounting system corresponds to a special journal in a paper-based system?

A) Transaction file.
B) Master file.
C) Open file.
D) Reference file.

Question 49

In which area would real-time posting be most valuable in light of the added resources necessary to maintain a real-time system?

A) Inventory
B) General ledger
C) Sales
D) Payroll

Question 50

Which of the following defines a scratch file?

A) A temporary file used during processing and is purged when the operation is completed
B) A file that stores instructions to tell the computer how to process data
C) A file that stores permanent records of transactions
D) A duplicate copy of a file made for security reasons and stored off-site

Question 51

Which of the following is (are) an example(s) of an open file in a computerized system?

A) Purchase order
B) Sales order
C) Vendor invoice
D) All of these are examples of an open file

Question 52

What file in a computerized accounting system corresponds to a pay rate table in a paper-based system?

A) Transaction file.
B) Master file.
C) Open file.
D) Reference file.

Question 53

What happens to the size (number of records) of the customer master file when it is updated to reflect the customer's payment of an outstanding invoice?

A) Decreases
B) Increases
C) Remains the same
D) Cannot be determined

Question 54

Which of the following defines a reference file in a computerized system?

A) A file that stores data used repeatedly for processing transactions (e.g., payroll tax table)
B) A file that stores data on pending items such as sales orders
C) A file that stores detailed information about general ledger control accounts
D) A file that stores daily transaction data such as sales transactions

Question 55

With regard to batch v. real-time posting, which of the following is correct?

A) Real-time posting is preferred because it is faster than batch posting.
B) Real-time posting has no effect on computer processing time.
C) Batch posting is less costly in terms of computer and personnel resources than real-time posting.
D) None of the above.

Question 56

Which of the following files is (are) updated by the sales transaction file?

A) Customer master file
B) Sales order open file
C) Customer open invoice file
D) Inventory master file
E) All of these are updated by the sales transaction file E

Question 57

What happens to the size (number of records) of the cash receipts transaction file when a cash receipt for a customer invoice is posted?

A) Stays the same
B) Cannot be determined
C) Increases
D) Decreases

Question 58

What is the purpose of an open customer invoice file in a computerized system?

A) To store data about customer invoices that have not yet been paid
B) To store data about daily sales transactions
C) To store data that are used repeatedly for processing transactions
D) To store data about customers such as addresses

Question 59

Which of the following defines a source document?

A) An essential data element
B) A document that captures data about transactions and other events
C) The electronic capture of data
D) A listing of general ledger entries

Question 60

What file in a computerized accounting system corresponds to a pending file in a paper-based system?

A) Transaction file.
B) Master file.
C) Open file.
D) Reference file.

Question 61

One of the essential elements of a paper-based accounting system is the posting of data.

Question 62

Which of the following defines a shipping transaction file in a computerized system?

A) A file that stores data about sales requiring more than one shipment
B) A file that stores data about purchases
C) A file that stores data about purchases requiring the receipt of more than one shipment
D) A file that stores data about sales

Question 63

The general ledger master file stores information that supports both accounting and operating activities while the subsidiary ledger master files stores information that mainly supports accounting activities.

Question 64

An example of a source document is a receiving report.

Question 65

A ledger lists transactions in chronological order and is considered "the book of original entry."

Question 66

A bill of lading is a written contract between the shipper and the consignee.

Question 67

Four types of files in a computerized accounting system are scratch files, backup files, application files, and archive files.

Question 68

Some examples of elements of a paper-based accounting system include accounts, chart of accounts, ledgers, and outputs.

Question 69

A bill of lading is a written contract between the shipper, the carrier engaged in the transportation of the goods, and the receiver of the goods.

Question 70

As with general journals in a paper-based accounting system, the main purpose of subsidiary master files in a computerized system is to store detailed information about general control accounts.

Question 71

A journal is a listing in chronological order that is created to record a particular type of transaction.

Question 72

Which of the following defines sales (customer) invoice?

A) A document that captures the data about a sale to a customer
B) A document that captures the data about a purchase from a vendor
C) A document used to bill a vendor
D) A written contract between a shipper and a carrier

Question 73

The source documents and outputs are very similar in paper-based and computerized accounting systems.

Question 74

One of the essential elements of a paper-based accounting system is a chart of accounts.

Question 75

Which of the following are essential data elements in a customer master file?

A) Customer code, name, address, customer type, credit limit, credit terms, account balance beginning of year, year-to-date sales, year-to-date payments, amount owing
B) Vendor code, name, address, credit limit, credit terms, account balance, year-to date purchases, amount owed
C) Employee code, name, address, spouse/dependents, job skills, pay rate, birth date, deductions code, insurance
D) Security code, name, number of shares/units, purchase date, cost, interest/dividends received

Question 76

An open file contains the data about transactions that have been started but cannot be fully processed until a subsequent event occurs.

Question 77

Which of the following defines a cash receipts prelist?

A) A written contract between the shipper and the carrier
B) A list of transactions in chronological order
C) An element in an accounting system to classify monetary measurements
D) A record (by date) of all cash receipts

Question 78

The major difference in outputs from a computerized system and a paper-based system is the number and speed with which outputs from a computerized system can be generated.

Question 79

Which of the following statements is NOT correct?

A) In batch posting, the master and open file records are up to date only after posting is completed.
B) Batch posting is more expensive than real-time posting.
C) Batch posting is best done when there is no conflicting activity on the system.
D) With batch posting, a user can print a proof list of the transaction file before posting to try to catch errors.

Question 80

As accountants, we are interested in how a file is organized in a logical, or conceptual, sense as opposed to the how the file is organized physically.