Question 1

A listing of journal vouchers by numerical sequence,account number,or date is an example of
A) a general ledger control report.
B) a budget report.
C) a batch to be processed.
D) responsibility accounting.

Accepted Answer

A listing of journal vouchers by numerical sequence, account number, or date is a type of report that tracks and controls the general ledger. This report ensures that all journal vouchers are recorded accurately and in the proper chronological order, which aids in identifying and resolving errors in the books. It is not a budget report, a batch to be processed, or an example of responsibility accounting.

Question 2

Financial statements are prepared in a certain sequence.Which statement is prepared last in the sequence?
A) the adjusted trial balance
B) the income statement
C) the balance sheet
D) the statement of cash flows

Accepted Answer

The statement of cash flows is prepared last because it requires information from the income statement and the balance sheet to show how cash is generated and used during the period.

Question 3

How is general ledger updating accomplished by the various accounting subsystems?
A) Individual journal entries for each accounting subsystem transaction update the general ledger every 24 hours.
B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger.
C) The controller or treasurer must approve accounting subsystem journal entries before any updating may occur.
D) Nonroutine transactions are entered into the system by the treasurer's office.

Accepted Answer

Summary journal entries are used to update the general ledger for each accounting subsystem. These entries represent the results of all transactions for a certain time period, such as daily or weekly. This method is more efficient than individual journal entries for each transaction and allows for easier tracking and reconciliation. The controller or treasurer may still need to approve the entries, but this is not the primary method of updating the general ledger for each subsystem. Nonroutine transactions may still need to be entered into the system by the relevant department, but they will also be included in the summary journal entries.

Question 4

If you believe not all adjusting entries were posted in the general ledger,you should prepare a general ledger control report listing journal vouchers in
A) numerical sequence.
B) chronological order.
C) general ledger account number order.
D) any order, since you have to review them all anyway.

Accepted Answer

Adjusting entries should be listed in numerical sequence in a general ledger control report. This helps in tracking and verifying each entry systematically, ensuring that all adjustments are accounted for and can be easily referenced.

Question 5

Which item below is not considered a major input to the general ledger and reporting system?
A) summary entries from the major subsystems
B) reports from managers
C) adjusting entries
D) financing and investing activities

Accepted Answer

Reports from managers are not considered a major input to the general ledger and reporting system. The other options (A, C, D) are all major inputs that are necessary for accurate financial reporting. Summary entries from the major subsystems provide data from various departments, adjusting entries help to ensure that the financial statements are accurate and complete, and financing and investing activities impact the company's financial position and are recorded in the general ledger.

Question 6

Recording interest earned on an investment is an example of which type of adjusting journal entry?
A) accrual entry
B) deferral entry
C) revaluation entry
D) correcting entry

Accepted Answer

Recording interest earned on an investment is an example of an accrual entry, which recognizes revenue earned but not yet received or recorded.

Question 7

If you believe a general ledger account was not adjusted properly or at all,you should prepare a general ledger control report listing journal vouchers in
A) numerical sequence.
B) chronological order.
C) general ledger account number order.
D) any order, since you have to review them all anyway.

Accepted Answer

Organizing the journal vouchers in general ledger account number order will help identify any accounts that were not properly adjusted or updated. This allows for a systematic review of the accounts instead of a random one.

Question 8

Adjusting entries that reflect events that have already occurred,but for which no cash flow has taken place are classified as
A) accruals.
B) deferrals.
C) revaluations.
D) corrections.

Accepted Answer

Accruals are adjusting entries that recognize revenues or expenses that have already occurred but for which no cash flow has taken place. Thus, the best choice in this case is option A. Deferrals are adjusting entries that recognize cash flows that have already occurred but for which revenues or expenses have not yet been recognized. Revaluation is the process of adjusting the value of an asset or liability to reflect its current fair value. Corrections are adjustments made to correct errors or mistakes in the accounting records.

Question 9

Depreciation expense and bad debt expense are examples of which type of adjusting journal entry?
A) deferrals
B) accruals
C) revaluations
D) estimates

Accepted Answer

The answer of Depreciation expense and bad debt expense are...

Question 10

An adjusting entry made at the end of an accounting period that reflects the exchange of cash prior to performance of a related event is classified as a(n)
A) accrual entry.
B) deferral entry.
C) revaluation entry.
D) correcting entry.

Accepted Answer

This is a deferral entry because it reflects the payment of cash before the related event has occurred. The adjusting entry is made to defer the recognition of the expense or revenue until the related event has taken place.

Question 11

Who provides the adjusting entries for a well-designed general ledger and reporting system?
A) various user departments
B) the treasurer's area
C) the other major AIS subsystems
D) the controller's area

Accepted Answer

The controller's area is responsible for providing the adjusting entries for a well-designed general ledger and reporting system. The controller's area is typically responsible for the overall management of the accounting function, including oversight of the general ledger and financial reporting processes. This includes ensuring that appropriate adjusting entries are made at the end of each accounting period to accurately reflect the financial position of the organization. While other areas, such as user departments or the treasurer's area, may provide input or information to help inform these adjustments, the ultimate responsibility for providing them lies with the controller's area.

Question 12

When updating the general ledger,sales,purchases,and production are examples of ________ entries,and issuance or retirement of debt and the purchase or sale of investment securities are examples of ________ entries.
A) adjusting; controller originated
B) accounting subsystem; treasurer originated
C) adjusting; special journal
D) controller generated; special journal

Accepted Answer

Sales, purchases, and production are part of the accounting subsystem and are recorded in special journals. Issuance or retirement of debt and the purchase or sale of investment securities are typically initiated by the treasurer and recorded in the general ledger by the controller. Therefore, option B is the best choice as it correctly identifies the two types of entries based on who originates them.

Question 13

Entries to update the general ledger are often documented by which of the following?
A) general journal
B) subsidiary journal
C) subsidiary ledgers
D) journal vouchers

Accepted Answer

Journal vouchers are used to document entries that update the general ledger, providing a record of the transaction details.

Question 14

The general ledger system of an organization should be designed to serve the information requirements of both internal and external users.This means that the system should support
A) producing expansive regular periodic reports to cover all information needs.
B) the real-time inquiry needs of all users.
C) producing regular periodic reports and respond to real-time inquiry needs.
D) access by investors and creditors of the organization to general ledger balances.

Accepted Answer

The general ledger system should be designed to serve the information requirements of both internal and external users. Producing regular periodic reports to cover all information needs alone may not address the real-time inquiry needs of users. Similarly, designing the system to only respond to real-time inquiry needs may not sufficiently address the periodic reporting needs of users. Therefore, the best choice is C, which supports both regular periodic reports and real-time inquiry needs. While access by investors and creditors to general ledger balances is important, it is not the only requirement of the system.

Question 15

Corrections are entries made to correct errors found in ________.
A) all journals
B) special journals
C) the general ledger
D) the financial statements

Accepted Answer

Corrections are made to fix errors in the general ledger, which is the main source of information used to create financial statements. While errors in special journals may be corrected, they ultimately flow into the general ledger where they must be corrected. The financial statements themselves are not typically corrected, but rather, adjustments are made to the underlying accounts in the general ledger.

Question 16

Adjusting entries that are made to counteract the effects of errors found in the general ledger are called
A) accruals.
B) corrections.
C) deferrals.
D) estimates.

Accepted Answer

Adjusting entries made to counteract errors found in the general ledger are called corrections. Accruals are adjusting entries made for revenues or expenses that have been earned or incurred but not yet recorded. Deferrals are adjusting entries made for prepaid or unearned items. Estimates are adjusting entries made for estimated values.

Question 17

Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called
A) reconciliations.
B) revaluations.
C) estimates.
D) accruals.

Accepted Answer

Revaluations are adjustments made to reflect differences between the actual and recorded value of an asset or to account for changes in accounting principles. These adjustments ensure that the financial statements present the fair value of assets and accurately reflect any changes in accounting methods.

Question 18

Immediately after the adjusting entries are posted,the next step in the general ledger and reporting system is to prepare
A) an adjusted trial balance.
B) closing entries.
C) financial statements.
D) an unadjusted trial balance.

Accepted Answer

After the adjusting entries are posted, the next step is to prepare an adjusted trial balance. This will show the updated balances of all accounts after the adjusting entries have been made. From this adjusted trial balance, the financial statements can then be prepared. Closing entries come after the financial statements and are used to reset the temporary accounts for the next accounting period. An unadjusted trial balance is prepared at the beginning of the accounting period and is not relevant after the adjusting entries have been made.

Question 19

The general ledger and reporting system consists of the ________ involved in ________ the general ledger and ________ reports.
A) business transactions; updating; processing
B) data processing; business transactions for; printing
C) information processing; updating; creating
D) business transactions; data processing; preparing

Accepted Answer

The general ledger and reporting system involves information processing to update the general ledger and create reports, which is accurately described in option C. Option A and D are partially correct but do not cover all the aspects of the system, while option B is incorrect as it suggests the system is only involved in processing data and printing business transactions.

Question 20

The general ledger and reporting system is designed to provide information for which of the following user groups?
A) internal users
B) external users
C) inquiry processing by internal or external users
D) all of the above

Accepted Answer

The general ledger and reporting system is designed to provide information for both internal and external users, as well as for inquiry processing by both types of users. Therefore, option D, all of the above, is the best choice.

Quiz 16: General Ledger and Reporting System

A listing of journal vouchers by numerical sequence,account number,or date is an example of

Financial statements are prepared in a certain sequence.Which statement is prepared last in the sequence?

How is general ledger updating accomplished by the various accounting subsystems?

If you believe not all adjusting entries were posted in the general ledger,you should prepare a general ledger control report listing journal vouchers in

Which item below is not considered a major input to the general ledger and reporting system?

Recording interest earned on an investment is an example of which type of adjusting journal entry?

If you believe a general ledger account was not adjusted properly or at all,you should prepare a general ledger control report listing journal vouchers in

Adjusting entries that reflect events that have already occurred,but for which no cash flow has taken place are classified as

Depreciation expense and bad debt expense are examples of which type of adjusting journal entry?

An adjusting entry made at the end of an accounting period that reflects the exchange of cash prior to performance of a related event is classified as a(n)

Who provides the adjusting entries for a well-designed general ledger and reporting system?

When updating the general ledger,sales,purchases,and production are examples of entries,and issuance or retirement of debt and the purchase or sale of investment securities are examples of entries.

Entries to update the general ledger are often documented by which of the following?

The general ledger system of an organization should be designed to serve the information requirements of both internal and external users.This means that the system should support

Corrections are entries made to correct errors found in ________.

Adjusting entries that are made to counteract the effects of errors found in the general ledger are called

Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called

Immediately after the adjusting entries are posted,the next step in the general ledger and reporting system is to prepare

The general ledger and reporting system consists of the involved in the general ledger and reports.

The general ledger and reporting system is designed to provide information for which of the following user groups?