-
web.groovymark@gmail.com
- December 12, 2024
Question 01
What type of code is used to assign ranges of values to specific attributes, such as account classifications?
A) Group code
B) Block code
C) Sequential code
D) Alphabetical code
Answer: B) Block code
Explanation: Block codes are used to assign ranges of values to specific attributes, such as account classifications.
Question 02
What is the purpose of mnemonic codes?
A) To represent items in sequential order
B) To create simple numeric codes
C) To represent complex items involving multiple fields
D) To convey meaning through acronyms or combinations of letters
Answer: D) To convey meaning through acronyms or combinations of letters
Explanation: Mnemonic codes use alphabetic characters to convey meaning, often in the form of acronyms.
Question 03
What is the role of the digital audit trail in a modern accounting system?
A) To track the shipment of goods
B) To record transactions for external audit
C) To trace the flow of transactions from input to output
D) To store sensitive company data
Answer: C) To trace the flow of transactions from input to output
Explanation: A digital audit trail allows for transaction tracing through the input, processing, and output phases.
Question 04
Which type of file contains account data and is updated by transactions?
A) Archive file
B) Transaction file
C) Master file
D) Reference file
Answer: C) Master file
Explanation: Master files contain account data, and their values are updated by transactions.
Question 05
What is the function of the transaction file?
A) To store employee payroll information
B) To act as a backup for the master file
C) To update data in the master file
D) To store historical data for future reference
Answer: C) To update data in the master file
Explanation: Transaction files contain records used to update the master file.
Question 06
Which file contains records of past transactions retained for future reference and forms part of the audit trail?
A) Master file
B) Transaction file
C) Archive file
D) Reference file
Answer: C) Archive file
Explanation: Archive files contain records of past transactions and are essential for the audit trail.
Question 07
What is the main responsibility of an external auditor?
A) Authorizing transactions
B) Determining the validity, accuracy, and completeness of financial records
C) Maintaining customer records
D) Managing payroll processing
Answer: B) Determining the validity, accuracy, and completeness of financial records
Explanation: External auditors ensure that financial records are valid, accurate, and complete.
Question 08
What type of ledger is used to record detailed data for general ledger accounts with many individual subaccounts?
A) General ledger
B) Subsidiary ledger
C) Payroll ledger
D) Journal ledger
Answer: B) Subsidiary ledger
Explanation: Subsidiary ledgers contain detailed data for general ledger accounts that require subaccounts.
Question 09
What is the primary duty of a mailroom clerk in accounting?
A) Verifying account balances
B) Handling payroll processing
C) Reconciling checks and remittances
D) Recording customer orders
Answer: C) Reconciling checks and remittances
Explanation: A mailroom clerk's main responsibility is to reconcile checks and remittances.
Question 10
What does the purchase requisition ensure?
A) That items purchased are from authorized vendors
B) That items are delivered to customers on time
C) That employees receive paychecks
D) That sales are recorded in the journal
Answer: A) That items purchased are from authorized vendors
Explanation: A purchase requisition ensures that purchases are made only from authorized vendors.
Question 11
What is the main function of the accounts payable department?
A) Managing payroll records
B) Collecting data and invoices to complete transactions
C) Handling customer complaints
D) Approving vendor contracts
Answer: B) Collecting data and invoices to complete transactions
Explanation: The accounts payable department collects invoices and data to manage vendor payments and transactions.
Question 12
What is a three-way match in the expenditure cycle?
A) A match between the customer, vendor, and auditor
B) A match between the general ledger, trial balance, and income statement
C) A reconciliation of the supplier’s invoice, receiving report, and purchase order
D) A comparison of sales orders, shipping receipts, and inventory reports
Answer: C) A reconciliation of the supplier's invoice, receiving report, and purchase order
Explanation: A three-way match ensures that the supplier’s invoice, receiving report, and purchase order are consistent before payment is made.
Question 13
Which document identifies employees authorized to receive a paycheck?
A) Payroll register
B) Personnel action form
C) Timecard
D) Purchase requisition
Answer: B) Personnel action form
Explanation: Personnel action forms identify employees authorized to receive pay and any changes in their pay rates or deductions.
Question 14
What is included in the payroll register?
A) Customer sales data
B) Details of gross pay, deductions, overtime, and net pay
C) General ledger balances
D) A list of authorized vendors
Answer: B) Details of gross pay, deductions, overtime, and net pay
Explanation: The payroll register includes details like gross pay, deductions, overtime pay, and net pay for employees.
Question 15
Which account is used to deposit a single check for the entire payroll amount?
A) General account
B) Accounts receivable account
C) Payroll imprest account
D) Savings account
Answer: C) Payroll imprest account
Explanation: A payroll imprest account is used to deposit the total payroll amount, from which individual paychecks are drawn.
Question 16
Who are the primary recipients of financial information in a business?
A) Employees and vendors
B) Investors and creditors
C) Customers and suppliers
D) Government agencies and employees
Answer: B) Investors and creditors
Explanation: Investors and creditors are the primary recipients of financial information to assess the financial health of a business.
Question 17
What is the main purpose of general ledger files in the audit trail?
A) To track sales records
B) To provide historical data and prevent errors
C) To generate customer invoices
D) To update vendor records
Answer: B) To provide historical data and prevent errors
Explanation: The general ledger and other audit trail files help provide historical data, answer inquiries, and prevent errors.
Question 18
What is a consequence of automating general ledger postings?
A) Improved security
B) Increased sales
C) Risk of errors in data due to lack of human intervention
D) Elimination of audit trails
Answer: C) Risk of errors in data due to lack of human intervention
Explanation: Automating general ledger postings can lead to errors if there is no human oversight to review the data.
Question 19
What is the primary issue with the flat-file approach to data management?
A) It requires excessive computing power
B) It leads to data redundancy and task-data dependency
C) It simplifies data integration
D) It ensures more accurate record-keeping
Answer: B) It leads to data redundancy and task-data dependency
Explanation: The flat-file approach results in data redundancy, making it difficult to update or access information efficiently.
Question 20
Where is pooled data shared by all users typically stored?
A) In a flat file
B) In the general ledger
C) In a database
D) In a transaction file
Answer: C) In a database
Explanation: Databases are designed to allow data to be shared across different users and applications.
