Accounting Information Systems Basic Concepts and Current Issues 3rd Edition Hurt Test Bank

$40.00

Description

Accounting Information Systems Basic Concepts and Current Issues 3rd Edition Hurt Test Bank

02
Student: ___________________________________________________________________________
1. The process of identifying, measuring and communicating economic information to permit informed
judgments and decisions by users of the information is called:
A. Accounting
B. Bookkeeping
C. Making journal entries
D. Preparing financial statements
2. Which of the following phrases most closely relates to bookkeeping?
A. Identifying and measuring economic information
B. Communicating economic information
C. Permitting informed judgments by users
D. Permitting informed decisions by users
3. Which of the following most clearly differentiates accounting and bookkeeping?
A. Bookkeeping always involves information technology; accounting does not.
B. Accounting always involves information technology; bookkeeping does not.
C. Bookkeeping is the part of accounting most focused on rules and procedures.
D. A college degree is required for bookkeeping, but not for accounting.
4. Which of the following statements about accounting and bookkeeping is most true?
A. The FASB Conceptual Framework is relevant in accounting, but not in bookkeeping.
B. The FASB Conceptual Framework is relevant in bookkeeping, but not in accounting.
C. As an element of the AIS, internal controls are irrelevant to bookkeeping.
D. As an element of the AIS, outputs are relevant to accounting.
5. Communicating information to external decision makers is accomplished through ___ as part of the
process of ___.
A. Financial statements, bookkeeping
B. Financial statements, accounting
C. Journal entries, bookkeeping
D. Journal entries, accounting
6. Plant assets, such as equipment, are reported on financial statements at their book value, thus
exemplifying:
A. The measuring process in accounting only.
B. The measuring process in bookkeeping only.
C. The measuring process in both accounting and bookkeeping.
D. Informed judgments as part of the definition of bookkeeping.
7. An accountant received a stack of sales invoices. Which of the following statements is most true?
A
.
The stack of sales invoices can help the accountant identify economic information, which is part of
both accounting and bookkeeping.
B. The accountant is a “user of information” as the phrase is used in the definition of bookkeeping only.
C. The accountant is a “user of information” as the phrase is used in the definition of accounting only.
D
.
The stack of sales invoices can help the accountant identify economic information, which is part of
bookkeeping, but not accounting.
8. Which of the following best pairs an element of bookkeeping with an example of the element?
A. Identifying economic information, reading a balance sheet
B. Identifying economic information, preparing a balance sheet
C. Measuring economic information, reading a balance sheet
D. Measuring economic information, preparing a balance sheet
9. The concept of bookkeeping includes: (i) distinguishing relevant from irrelevant information, (ii)
calculating amounts to record in the AIS, (iii) reporting financial results.
A. I and II only.
B. I and III only.
C. II and III only.
D. I, II and III.
10. The definition of accounting has three principal elements. Which of the following is not one of them?
A. Distinguishing relevant from irrelevant information
B. Calculating amounts to record in the AIS
C. Reporting financial results
D. Using the information to make informed judgments
11. Which of the following steps in the accounting cycle occurs first?
A. Analyze transactions.
B. Close the temporary accounts to retained earnings.
C. Prepare an unadjusted trial balance.
D. Record the transactions in a journal.
12. Which step in the accounting cycle immediately precedes closing the temporary accounts?
A. Analyze transactions.
B. Prepare an adjusted trial balance.
C. Prepare financial statements.
D. Record adjusting entries.
13. In what way is the fifth step in the accounting cycle different from the seventh step in the accounting
cycle?
A. The fifth step comes before preparing financial statements; the seventh step comes afterward.
B. The fifth step focuses only on permanent accounts; the seventh step focuses only on temporary
accounts.
C. The fifth step focuses only on temporary accounts; the seventh step focuses only on permanent
accounts.
D. The seventh step includes the results of internal transactions; the fifth step does not.
14. Which of the following is an example of a deferred revenue?
A. A university receives cash from students prior to the start of classes.
B. A convenience store sells newspapers to its customers.
C. Both A and B
D. Neither A nor B
15. 1) VLN had unpaid wages totaling $800 at the end of the accounting period. When VLN’s accountant
makes an adjusting entry for the unpaid wages, the new trial balance totals will be:
Please refer to the following unadjusted trial balance in answering Questions 15 and 16.
A. $49,600
B. $51,200
C. Some other amount
D. Cannot be determined from the information given
16. When VLN completes the ninth step in the accounting cycle, all of the following accounts will be
involved except:
Please refer to the following unadjusted trial balance in answering Questions 15 and 16.
A. Advertising expense
B. Deferred revenue
C. Retained earnings
D. Sales
17. Adjusting entries for accrued revenues and accrued expenses are similar in that:
A. They both involve cash flows after service.
B. They both involve cash flows before service.
C. They both debit temporary accounts.
D. They both credit temporary accounts.
18. Most companies make adjusting entries for depreciation because:
A. Their plant assets lose market value over time.
B. The matching concept must be upheld in financial statements.
C. Both A and B.
D. Neither A nor B.
19. Which of the following sets includes amounts from a single financial statement?
A. Cash, sales, interest earned
B. Cash, accounts receivable, interest earned
C. Cash, accounts receivable, accounts payable
D. Sales, accounts receivable, interest earned
20. Which of the following sets includes examples of the same element of financial statements?
A. Accounts payable, deferred revenue, prepaid wages
B. Accounts receivable, deferred revenue, prepaid wages
C. Accounts payable, deferred revenue, wages payable
D. Deferred revenue, wages payable, prepaid wages
21. Common internal controls associated with source documents include: (i) sequential numbering, (ii)
physical security, (iii) equality of debits and credits.
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
22. Requiring ___ on certain source documents is associated with transaction limits as an internal control.
A. Sequential numbering
B. Physical security
C. Supervisory approval
D. Internal transaction notifications
23. TCP Corporation issues a purchase order whenever it buys inventory. Internal controls associated with
the purchase order may include:
A. Sequential numbering
B. Transaction limits
C. Both A and B
D. Neither A nor B
24. As an internal control measure in the accounting cycle, physical security most clearly applies to:
A. Source documents
B. The balance sheet
C. The income statement
D. The statement of cash flows
25. Just before preparing financial statements, an inexperienced accountant recorded the use of supplies by
debiting supplies expense $100 and debiting supplies $100. Which of the following is most true?
A. The transaction was recorded correctly.
B. The unadjusted trial balance will be an effective internal control for detecting any error.
C. The adjusted trial balance will be an effective internal control for detecting any error.
D. Sequential transaction numbering will be an effective internal control for detecting any error.
26. Linda embezzled cash from her employer by forging a signature on a check. Which of the following
internal controls for source documents would most likely prevent such occurrences in the future?
A. Sequential numbering
B. Physical security
C. Transaction limits
D. Bank reconciliation
27. As an internal control for source documents, sequential numbering is most likely to ___ an error.
A. Prevent
B. Detect
C. Correct
D. Eliminate
28. As an internal control for source documents, transaction limits are most likely to ___ an error.
A. Prevent
B. Detect
C. Correct
D. Eliminate
29. As a form of internal control, sequential numbering is most likely to be associated with which step in the
accounting cycle?
A. First
B. Fifth
C. Sixth
D. Last
30. As a form of internal control, transaction limits are most likely to be associated with which step in the
accounting cycle?
A. Second
B. Fourth
C. Ninth
D. Last
31. All of the following are common coding systems used in organizations except:
A. Block
B. Hierarchical
C. Random
D. Sequential
32. Which type of coding system helps people remember the meaning of the code?
A. Sequential
B. Block
C. Hierarchical
D. Mnemonic
33. The accounting department at a local university uses the prefix ACC for all its courses, thus exemplifying
which type of coding system?
A. Sequential
B. Block
C. Hierarchical
D. Mnemonic
34. Courses intended for freshmen at a local university are numbered from 100 to 199, while courses
intended for seniors at the same university are numbered from 400 to 499. Which coding system is the
university using?
A. Sequential
B. Block
C. Hierarchical
D. Mnemonic
35. Most organizations use purchase orders to authorize inventory and other purchases. If a company’s
purchase order contains a column labeled “product code,” it most likely uses what kind of coding?
A. Sequential
B. Block
C. Hierarchical
D. Mnemonic
36. Most organizations use purchase orders to authorize inventory and other purchases. If a company’s
purchase order contains a field labeled “purchase order number,” it most likely uses what kind of coding?
A. Sequential
B. Block
C. Hierarchical
D. Mnemonic
37. NTR Corporation has offices in both Los Angeles and San Francisco. In the Los Angeles office, the
account number for cash is 001.101. In San Francisco, the account number for cash is 002.101. Which of
the following statements is most true?
A. NTR uses sequential coding for its chart of accounts.
B. One of the offices should change its account number for cash to promote consistency and efficiency.
C. The first set of digits denotes the office.
D. The second set of digits denotes the office.
38. NTR Corporation has offices in both Los Angeles and San Francisco. In the Los Angeles office, the
account number for cash is 001.101. In San Francisco, the account number for cash is 002.101. The
account number for accounts receivable in the Los Angeles office is therefore likely to be:
A. 001.102
B. 002.102
C. 102.002
D. 002.110
39. ABT Corporation uses block coding for its chart of accounts, which includes Cash (101), Land (201),
Accounts payable (301) and Retained Earnings (501). Which of the following account numbers is most
likely associated with an account that will appear on the income statement?
A. 101
B. 102
C. 401
D. 601
40. ABT Corporation uses block coding for its chart of accounts, which includes Cash (101), Land (201),
Accounts payable (301) and Retained Earnings (501). Which of the following account numbers is most
likely associated with an account that will appear on the adjusted trial balance but not on the post-closing
trial balance?
A. 203
B. 405
C. 504
D. 701