Question 1

Which of the following statements is FALSE?
A) Management accounting includes creating reports for management decision making purposes, such as the balanced scorecard.
B) Financial accounting includes creating reports for external stakeholders, such as the income statement and balance sheet.
C) Cost accounting includes creating reports associated with the conversion process, such as purchasing reports.
D) Responsibility accounting includes creating reports for responsible parties, such as XBRL instance documents.

Accepted Answer

Responsibility accounting focuses on gathering and reporting financial information related to the responsibilities of individual managers or departments, not on creating XBRL (eXtensible Business Reporting Language) instance documents. XBRL documents are used for communicating financial data electronically and are more relevant to financial accounting for external reporting purposes.

Question 2

What type of accounting is used to trace performance and hold accountable the managers of those departments?
A) Financial accounting
B) Cost accounting
C) Responsibility accounting
D) All of these answer choices are correct.

Accepted Answer

Responsibility accounting is the type of accounting that focuses on tracing and evaluating the performance of different departments and managers, holding them accountable for their actions and decisions.

Question 3

Which of the following statements is TRUE of responsibility accounting reports?
A) Responsibility accounting reports are used to trace performance to the responsible department.
B) Responsibility accounting reports follow GAAP guidelines.
C) The SEC mandates the public release of responsibility reports.
D) All of these answer choices are correct.

Accepted Answer

Responsibility accounting reports are designed to trace the performance of specific segments, departments, or managers within an organization, allowing for better tracking and accountability of their actions and decisions. They are not necessarily governed by GAAP guidelines, nor are they mandated for public release by the SEC.

Question 4

Which of the following statements concerning responsibility accounting reports is FALSE?
A) Responsibility accounting reports are used to trace performance to the responsible department or manager to improve accountability.
B) Responsibility accounting reports go beyond the scope of financial accounting reports and cannot be generated by the AIS.
C) Responsibility accounting reports are customized for managers based on their areas of responsibility.
D) Responsibility accounting reports break-down financial data by controllable costs in a department.

Accepted Answer

Responsibility accounting reports can indeed be generated by the Accounting Information System (AIS), as they are designed to provide information relevant to a specific manager's area of responsibility, including financial and non-financial data.

Question 5

As the report creator for your company's AIS, you recently received a request for some custom reports to show detail about outstanding accounts receivables for the accounts receivable manager. What category of accounting is the report is the accounts receivable manager asking you to create?
A) Financial accounting
B) Cost accounting
C) Responsibility accounting
D) All of these answer choices are correct.

Accepted Answer

Responsibility accounting focuses on providing information to managers who are responsible for making decisions and overseeing parts of the business, such as managing outstanding accounts receivables.

Question 6

Which of the following best describes a balanced scorecard?
A) Internal assessment tool
B) Provides key performance indicators
C) Turns strategy into action
D) All of these answer choices are correct.

Accepted Answer

A balanced scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It encompasses internal assessment, key performance indicators, and the translation of strategy into actionable objectives, making all the provided options correct.

Question 7

What type of accounting tool combines financial and nonfinancial measures for managerial reporting?
A) Responsibility report
B) Corporate scorecard
C) Balanced scorecard
D) Cost report

Accepted Answer

The Balanced Scorecard is an accounting tool that combines both financial and nonfinancial measures in a single report, providing a more comprehensive view of an organization's performance.

Question 8

The success of using a balanced scorecard is the
A) link to the organization's strategic plan.
B) accuracy of the data reflected.
C) ability to update the scorecard frequently.
D) use of multiple types of key performance indicators.

Accepted Answer

The balanced scorecard's success is primarily due to its alignment with the organization's strategic plan, ensuring that all performance measures support the overall strategy.

Question 9

Which of the following most accurately reflects the four traditional dimensions of a balanced scorecard?
A) Financial, managerial, customer relationships, and vendor relationships
B) Financial, customer relationships, internal business processes, and learning and growth
C) Innovation, financial, managerial, and customer relationships
D) Innovation, managerial, customer relationships, and learning and growth

Accepted Answer

The four traditional dimensions of a balanced scorecard are Financial, Customer Relationships, Internal Business Processes, and Learning and Growth. These dimensions help organizations to balance their strategic objectives across different areas of performance.

Question 10

Job satisfaction and employee turnover are examples of what type of metric on a balanced scorecard dashboard?
A) Internal processes
B) Customer relationships
C) Financial
D) Learning and growth

Accepted Answer

Job satisfaction and employee turnover are related to the development and well-being of employees, which falls under the "Learning and Growth" perspective of a balanced scorecard.

Question 11

Which of the following features in an ERP system contribute to financial reporting?
A) Shipment of product
B) Payroll
C) Stock control
D) All of these answer choices are correct.

Accepted Answer

All the listed features (shipment of product, payroll, stock control) contribute to financial reporting in an ERP system. Shipment affects revenue and cost of goods sold, payroll impacts expenses, and stock control affects inventory valuation and cost of goods sold.

Question 12

What is the record-keeping system that captures all journal entries and validates them using the trial balance?
A) Financial reporting
B) General ledger
C) Budget
D) Chart of accounts

Accepted Answer

The general ledger is the core of a company's financial records, capturing all journal entries and validating them through the trial balance process to ensure accuracy in financial reporting.

Question 13

What feature in an ERP system summarizes detailed transactions that occur in sub-ledger accounts?
A) Chart of accounts
B) Consolidated ledger
C) General ledger
D) Income statement

Accepted Answer

The General Ledger in an ERP system is designed to summarize detailed transactions from various sub-ledger accounts (like accounts payable, accounts receivable, cash management, etc.), providing a comprehensive view of the financial state of the organization.

Question 14

What type of audit technique involves using a calculation to verify the completeness of the journal entry by adding a journal entry to the beginning balance and comparing it to the ending balance?
A) Trial balance roll forward
B) Trial balance roll backward
C) General ledger roll forward
D) General ledger roll backward

Accepted Answer

The trial balance roll forward technique involves adding a journal entry to the beginning balance and comparing it to the ending balance to verify the completeness of the journal entry.

Question 15

In which module of the ERP system do the raw material management and product costing features reside?
A) Supply chain management
B) Sales management
C) Production
D) Financial

Accepted Answer

The production module of an ERP system typically includes features for managing raw materials and product costing, as it deals with the manufacturing process and related resources.

Question 16

Company A acquires Company Z. Company Z uses an ERP system that is incompatible to the one used by Company A. As a corporate manager, you must carefully consider the cost of switching Company Z to Company A's ERP system versus the
A) decision usefulness of the financial data.
B) corporate leadership appetite for adopting a new system.
C) time investment to make the switch.
D) All of these answer choices are correct.

Accepted Answer

All of these factors - decision usefulness of the financial data, corporate leadership's appetite for adopting a new system, and the time investment required to make the switch - are important considerations when deciding whether to switch Company Z to Company A's ERP system.

Question 17

Jessica works as an accountant for a local manufacturing company. At the company, Jessica is responsible for validating all journal entries. What report should Jessica use to accomplish the journal entry validation?
A) Income statement
B) Balance sheet
C) Trial balance
D) Ledger statement

Accepted Answer

The trial balance is the correct report for validating journal entries because it lists all the ledger accounts and their balances at a specific time, allowing for the verification of the correctness of the entries by ensuring that debits equal credits.

Question 18

Ava works in the human resources (HR) department for the firm. Currently, the HR department is not integrated with the ERP system for the firm. Ava sees the opportunity to improve the department through employee development. What modules should Ava recommend be added to the ERP system for the firm to boost the efficiency of the HR department?
A) Talent management
B) Recruiting and onboarding
C) Training and development
D) All of these answer choices are correct.

Accepted Answer

All the modules mentioned - Talent management, Recruiting and onboarding, and Training and development - are integral parts of a comprehensive HR management system within an ERP. Integrating these modules can significantly enhance the efficiency and effectiveness of the HR department by streamlining processes, improving employee management, and facilitating better resource planning.

Question 19

When developing the entity relationship diagram for the general ledger, which of the following fields is the most likely primary key, or unique identifier, for the chart of accounts?
A) Account number
B) Account name
C) Account description
D) All of these answer choices are correct.

Accepted Answer

Account number is typically used as the primary key for the chart of accounts because it is unique for each account, ensuring that each record can be accurately identified and referenced.

Question 20

In an entity relationship diagram for the general ledger, each journal entry includes a foreign key field for the Employee_ID of the employee who both posted and approved the transaction. Which of the following statements concerning the Employee_ID field used in this context is TRUE?
A) The Employee_ID field is not enough information. The transaction should also include the employees' names and departments to allow auditors to complete their review.
B) The Employee_ID would be a good candidate key for the primary key of the JournalEntry table listing each entry in the general ledger.
C) Additional employee information required can be pulled from the Employee table as the Employee_ID field is a foreign key related to the Employee table inserted into the JournalEntry table.
D) All of these answer choices are correct.

Accepted Answer

The Employee_ID field, being a foreign key, links the JournalEntry table to the Employee table, allowing for the retrieval of additional employee information as needed without storing it directly in the JournalEntry table. This maintains database normalization by avoiding redundancy and ensuring data integrity.

Quiz 13: Financial Reporting Processes

Which of the following statements is FALSE?

What type of accounting is used to trace performance and hold accountable the managers of those departments?

Which of the following statements is TRUE of responsibility accounting reports?

Which of the following statements concerning responsibility accounting reports is FALSE?

As the report creator for your company's AIS, you recently received a request for some custom reports to show detail about outstanding accounts receivables for the accounts receivable manager. What category of accounting is the report is the accounts receivable manager asking you to create?

Which of the following best describes a balanced scorecard?

What type of accounting tool combines financial and nonfinancial measures for managerial reporting?

The success of using a balanced scorecard is the

Which of the following most accurately reflects the four traditional dimensions of a balanced scorecard?

Job satisfaction and employee turnover are examples of what type of metric on a balanced scorecard dashboard?

Which of the following features in an ERP system contribute to financial reporting?

What is the record-keeping system that captures all journal entries and validates them using the trial balance?

What feature in an ERP system summarizes detailed transactions that occur in sub-ledger accounts?

What type of audit technique involves using a calculation to verify the completeness of the journal entry by adding a journal entry to the beginning balance and comparing it to the ending balance?

In which module of the ERP system do the raw material management and product costing features reside?

Company A acquires Company Z. Company Z uses an ERP system that is incompatible to the one used by Company A. As a corporate manager, you must carefully consider the cost of switching Company Z to Company A's ERP system versus the

Jessica works as an accountant for a local manufacturing company. At the company, Jessica is responsible for validating all journal entries. What report should Jessica use to accomplish the journal entry validation?

When developing the entity relationship diagram for the general ledger, which of the following fields is the most likely primary key, or unique identifier, for the chart of accounts?

In an entity relationship diagram for the general ledger, each journal entry includes a foreign key field for the Employee_ID of the employee who both posted and approved the transaction. Which of the following statements concerning the Employee_ID field used in this context is TRUE?