Revel Ch18

Which person makes original journal entries in the general ledger and reporting system about events such as dividend payments and payments to creditors?

A. Controller

B. Budget director

C. Treasurer

D. Department manager

Treasurer

Which person makes adjusting entries in the general ledger and reporting system?

A. Controller

B. Treasurer

C. Department manager

D. Budget director

Controller

Which person makes closing entries in the general ledger and reporting system?

A. Department manager

B. Treasurer

C. Controller

D. Budget director

Controller

Data processing integrity controls reduce the risk of ______.

A. unauthorized disclosure of financial statement

B. inaccurate general ledger data

C. loss or destruction of general ledger data

D. fraudulent financial reporting

inaccurate general ledger data

Which of the following are outputs of the general ledger and reporting system? (Check all that apply.)

A. Financial statements

B. Managerial reports

C. Adjusting entries

D. Budgets

E. Closing entries

A. Financial statements

B. Managerial reports

D. Budgets

The purpose of employing data entry processing integrity controls is to mitigate the threat of

A. both unauthorized journal entries and inaccurate updating of the general ledger.

B. inaccurate updating of the general ledger.

C. unauthorized journal entries.

D. None of these are correct.

inaccurate updating of the general ledger.

For sound internal control, which of the following sources should be permitted to update the general ledger?

A. Treasurer

B. Controller

C. Both the Treasurer and Controller

D. Neither the Treasurer nor the Controller

Treasurer

Which of the following controls is designed to ensure that after updating the general ledger, assets have debit balances and liabilities have credit balances?

A. Completeness test

B. Validity check

C. Sign check

D. Field check

Sign check

Which of the following is used to verify that the total debits equal the total credits in the general ledger?

A. Journal voucher file

B. Review by the treasurer

C. Audit trail

D. Trial balance

Trial balance

What does a properly designed audit trail enable? (Check all that apply.)

A. Construction of a journal voucher file

B. Trace any item appearing in a report back through the general ledger to the original source document, thereby validating the data in the report

C. Trace any transaction from its original source document to the journal entry that updated the general ledger

D. Construction of a trial balance

B. Trace any item appearing in a report back through the general ledger to the original source document, thereby validating the data in the report

C. Trace any transaction from its original source document to the journal entry that updated the general ledger

An adjusting entry that is made to reflect the exchange of cash prior to performance of the related business activity is called a(n)

A. Accrual

B. Deferral

C. Estimate

D. Revaluation

Deferral

An adjusting entry that is made to record a portion of expenses that are expected to occur over multiple time periods is called a(n)

A. Accrual

B. Deferral

C. Estimate

D. Revaluation

Estimate

An adjusting entry that is made to reflect events that have occurred but for which cash has not yet been received or disbursed is called a(n)

A. Deferral

B. Estimate

C. Accrual

D. Revaluation

Accrual

Who should make adjusting entries?

A. CFO

B. Controller

C. CISO

D. Treasurer

Controller

Spreadsheet error protection controls reduce the risk of

A. unauthorized adjusting entries.

B. fraudulent financial reporting.

C. inaccurate adjusting entries.

D. loss or destruction of general ledger data.

inaccurate adjusting entries.

An XBRL file that explains the relationships among and between financial statement categories (e.g., that Short-term Liabilities and Long-term Liabilities are both part of the Liabilities section is called a(n)

A. Schema

B. Definition Linkbase

C. Instance document

D. Style Sheet

Definition Linkbase

An XBRL file presented to end users and that contains tagged data is called a(n)

A. Definition Linkbase

B. Style Sheet

C. Schema

D. Instance document

Instance document

An XBRL file that provides instructions on how to display an XBRL report on a computer monitor or in a printed report is called a(n)

A. Schema

B. Instance document

C. Definition Linkbase

D. Style Sheet

Style Sheet

The phrase "close the books" is associated with producing ______.

A. journal voucher files

B. trial balance

C. budgets

D. financial statements

financial statements

If a company has some unique assets or performs some unique activities that differ from most other companies in the industry, it will probably have to use a(n) _____ to present information about those unique facets of its in business in an XBRL report.

A. linkbase

B. instance document

C. extension taxonomy

D. schema

extension taxonomy

The third basic activity in the accounting system which produces financial statements is:

a. post adjusting entries

b. prepare financial statements

c. update general ledger

d. produce managerial reports

b. prepare financial statements

To minimize the risk of an unscrupulous manager that can conceal theft of assets or poor performance by altering information in the general ledger. Which of the following statement(s) is TRUE?

a. Employ read-only privileges to portions of the system necessary to perform assigned duties.

b. Employ an access control matrix designed to limit the functions that can be performed by users.

c. Review all changes made to the general ledger data.

d. All of the above are true.

d. All of the above are true.

The act of tracing any transaction from its original source document (whether paper or electronic) to the journal entry that updated the general ledger and to any

report or other document using that data:

a. Provides a means to verify that all transactions are recorded correctly

b. Provides a means to verify that all transactions were authorized

c. Provides a means to verify that all authorized transactions were recorded correctly

d. All of the above

c. Provides a means to verify that all authorized transactions were recorded correctly

A report that lists the balances for all general ledger accounts is called:

a. Balance Sheet

b. Trial Balance

c. Audit Trail

d. Journal entry control report

b. Trial Balance

The ____ posts the adjusting journal entries after the trial balance has been prepared.

a. finance department

b. controller's office

c. treasurer's office

d. COO

b. controller's office

The ____ category includes adjusting entries to record the expensing of prepaid assets.

a. estimates

b. corrections

c. deferrals

d. revaluations

e. accruals

c. deferrals

The following are the three basic financial statements:

1. Balance sheet

2. Income statement

3. Statement of cash flows

The correct order in preparing these financial statements is:

a. 2, 1, 3

b. 1, 2, 3

c. 1, 3, 2

d. 2, 3, 1

e. 3, 1, 2

a. 2, 1, 3

XBRL is a variant of ____.

a. HTML

b. NAARS

c. EDGAR

d. XML

d. XML

The power of XBRL lies in the information provided by its:

a. edit checks

b. tags

c. data marks

d. none of the above

b. tags

In using a balanced scorecard, ____ is (are) the key for every organization to achieving financial goals.

a. profitability

b. internal controls

c. innovation

d. customers

d. customers