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web.groovymark@gmail.com
- December 12, 2024
Question 21
Which of the following is NOT a reasonable control for fixed assets?
A) Requiring that fully depreciated assets be disposed of immediately
B) Maintaining accurate records of all asset acquisitions
C) Performing periodic physical inventories
D) Implementing authorization procedures for asset purchases
Answer: A) Requiring that fully depreciated assets be disposed of immediately
Explanation: Fully depreciated assets may still have useful life and do not need to be immediately disposed of.
Question 22
What type of data is found in the general ledger master file?
A) Customer details
B) Vendor transactions
C) Balances for each account in the chart of accounts
D) Shipping information
Answer: C) Balances for each account in the chart of accounts
Explanation: The general ledger master file holds the balances for all accounts included in the chart of accounts.
Question 23
Which report is an output of the financial reporting system (FRS)?
A) Bank reconciliation
B) Comparative balance sheet
C) Inventory forecast
D) Sales receipt
Answer: B) Comparative balance sheet
Explanation: The financial reporting system produces key financial documents like the balance sheet for external reporting.
Question 24
A characteristic of the management reporting system (MRS) is:
A) It generates only external financial statements
B) It focuses on internal decision-making information
C) It tracks only revenue
D) It is identical to the FRS
Answer: B) It focuses on internal decision-making information
Explanation: The MRS provides reports that help managers make decisions based on internal performance data.
Question 25
Big data analytics are characterized by:
A) Volume, velocity, and variety
B) Accuracy, speed, and security
C) Confidentiality, integrity, and availability
D) Clarity, speed, and comprehensiveness
Answer: A) Volume, velocity, and variety
Explanation: Big data analytics is defined by the large volume of data, the high speed (velocity) at which it is processed, and the wide range of types of data (variety).
Question 26
What function does prescriptive analytics serve?
A) Analyzes past data
B) Predicts future trends
C) Suggests actions to be taken
D) Organizes historical records
Answer: C) Suggests actions to be taken
Explanation: Prescriptive analytics advises on possible courses of action based on data analysis and predictions.
Question 27
Which item reflects vital information such as quantities and unit prices?
A) Purchase order
B) Sales order
C) Shipping invoice
D) Inventory sheet
Answer: B) Sales order
Explanation: The sales order contains crucial details such as quantities ordered and unit prices.
Question 28
How do inventory control functions adjust inventory at the time of a return?
A) By generating a new purchase order
B) Through a manual update to stock records
C) An approved credit memo triggers the system to adjust inventory
D) By ignoring the return until the next audit
Answer: C) An approved credit memo triggers the system to adjust inventory
Explanation: When items are returned, the credit memo signals the system to update inventory levels.
Question 29
Which risk is associated with charge accounts within the revenue cycle?
A) Overpayment to vendors
B) Cash theft
C) Incorrect pricing
D) Clerks allowing purchases to individuals who do not pay their bills
Answer: D) Clerks allowing purchases to individuals who do not pay their bills
Explanation: Charge accounts carry the risk of credit being extended to customers who may default on their payments.
Question 30
Which function reflects the expenditure cycle?
A) Inventory control
B) Sales order entry
C) Cash receipts
D) Production planning
Answer: A) Inventory control
Explanation: Inventory control is part of the expenditure cycle, ensuring the organization tracks its purchases and stock levels.
Question 31
What is the purpose of the blind copy?
A) To hide sensitive information
B) To ensure customers’ data privacy
C) To force the receiving clerk to count contents and verify items
D) To notify accounts receivable of a payment due
Answer: C) To force the receiving clerk to count contents and verify items
Explanation: The blind copy ensures the receiving clerk manually verifies the quantity and quality of goods received.
Question 32
Which items reflect fixed assets?
A) Inventory items
B) Employee salaries
C) Buildings
D) Accounts payable
Answer: C) Buildings
Explanation: Fixed assets include long-term investments like buildings and machinery used in business operations.
Question 33
What contributes to the success of the electronic data interchange system?
A) Using multiple platforms
B) Implementation of agreements to avoid discrepancies
C) Handling all transactions manually
D) Reducing data transmission time
Answer: B) Implementation of agreements to avoid discrepancies
Explanation: Implementing clear agreements helps avoid misunderstandings or discrepancies in electronic data interchange.
Question 34
What is an example of a payroll system information technology (IT) control?
A) Timecards
B) Direct deposit
C) Manual wage calculation
D) Paper checks
Answer: B) Direct deposit
Explanation: Direct deposit is an IT control that automates the payment of wages, reducing the risk of errors or fraud.
Question 35
Which department is responsible for receiving the supplier’s invoice, the purchase order, and the receiving report in order to post the acquisition of fixed assets?
A) Inventory control
B) Sales
C) Accounts payable
D) Payroll
Answer: C) Accounts payable
Explanation: Accounts payable manages the supplier's invoice, the purchase order, and the receiving report for posting acquisitions.
Question 36
Which information from timecards provides an audit trail to support financial reporting?
A) Employee ID
B) Hours worked by employees on a specific date
C) Payroll deductions
D) Overtime approval forms
Answer: B) Hours worked by employees on a specific date
Explanation: Timecards track hours worked, which provides critical information for accurate financial reporting and payroll processing.
Question 37
Why are journal vouchers reviewed and approved before entry into the general ledger (GL)?
A) To prevent duplicate entries
B) To ensure data confidentiality
C) To ensure accuracy, completeness, and authorization
D) To maintain the audit trail
Answer: C) To ensure accuracy, completeness, and authorization
Explanation: Journal vouchers are reviewed and approved to ensure that entries are accurate, authorized, and complete before they are recorded in the GL.
Question 38
Why is a management reporting system a control?
A) It ensures customer payments
B) It only generates reports for external stakeholders
C) It supports decision-making and helps control business activities
D) It facilitates inventory management
Answer: C) It supports decision-making and helps control business activities
Explanation: The management reporting system provides reports that help managers make informed decisions and maintain control over operations.
Question 39
Why is the general ledger history file used for comparative financial reports?
A) It contains transaction receipts
B) It allows for year-to-year comparison of financial data
C) It tracks customer complaints
D) It manages payroll details
Answer: B) It allows for year-to-year comparison of financial data
Explanation: The general ledger history file helps in comparing data across years for financial analysis and reporting purposes.
Question 40
Which comparison serves as a tool for managers by using data from the budget master file and from the responsibility center file?
A) Comparison of employee performance
B) Comparison of budgeted amounts to actual revenue and expense by responsibility center
C) Comparison of customer orders
D) Comparison of shipping costs
Answer: B) Comparison of budgeted amounts to actual revenue and expense by responsibility center
Explanation: This comparison helps managers assess how well each department is adhering to its budget.
