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Accounting Mid-term Quiz




Question;INSTRUCTIONS: For multiple choice,highlight orbold your response. True/False (10 x 2 points each = 20 points)1.T F Proper authorizations and separation of duties are considered good examples of internal control.2.T F In an AIS, source documents are always paper-based.3.T F Human judgment is not essential in accounting information system.4. T F Bookkeeping and accounting are essentially the same thing.5. T F The end-of-year accounting cycle includes preparing several adjusting entries.6. T F Closing out the accounts at year-end to ready the AIS for next fiscal period?s entries.7. T F AIS focuses on business processes.8. T F Legal behavior is the same as ethical behavior.9. T F Only external parties can use information provided by the accounting information system. 10. T F This is the symbol for a decision within a flowchart: Multiple Choice (20 x 3 points each = 60 points)11. The components of an accounting information system are designed to collect ___ and report ___.A.Data, informationB.Data, dataC.Information, informationD.Information, data 12. 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 13. All of the following are common coding systems used in organizations except:A. BlockB. HierarchicalC. RandomD. Sequential Page 1 14. An accounting information system transforms inputs into outputs via processes such as: A.Journalizing transactions and posting them to the ledgerB.Identifying the elements of the FASB Conceptual FrameworkC.Always utilizing information technologyD.Recognizing and adapting to the cost-benefit constraint 15. 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 16. A trial balance: A. Demonstrates the lack of fraud in the AIS if its debits equal its credits. B. Can be prepared only at the end of the accounting period. C. Is another name for the balance sheet. D. Proves the equality of debits and credits in the ledger, but does not guarantee an error-free AIS. 17. 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. SequentialB. BlockC. HierarchicalD. Mnemonic18. Which of the following best describes a Ponzi scheme? A. A fraud whereby old investors are paid with money from new investors. B. Any fraud that involves a conflict of interest. C. A fraud committed with international cooperation. D. A fraud involving related-party transactions.19. The first resource to consult when confronting a professional ethical dilemma in accounting is A. The company?s own code of ethics B. A lawyer. C. A professional code of ethics. D. Dependent upon the decision maker?s personal ethical philosophy.20. Who bears the primary responsibility for establishing and maintaining a sound internal control system in an organization? A. Accountants B. External auditors C. Management D. Board of directors 21. Which of the following organizations is not a part of COSO? A. American Institute of CPAs B. Securities & Exchange Commission C. American Accounting Association D. Institute of Management AccountantsPage 222. Purposes of internal control include:A. Safeguarding assets.B. Ensuring financial statement reliability.C. Promoting operational efficiency.D. All of the above.23. Which kind of flowchart shows the logic associated with instructions given to a computer? A. SystemsB. ProgramC. DocumentD. Hardware 24. In Brown?s taxonomy, systems risk is a form of:A. Financial riskB. Operational riskC. Strategic riskD. Hazard risk25. Which kind of flowchart shows relationships between computers, printers, monitors and similar devices?A. SystemsB. ProgramC. DocumentD. Hardware26. Flowcharts should be read:A. From top to bottom and from left to rightB. From bottom to top and from left to rightC. From top to bottom and from right to leftD. From bottom to top and right to left27. Which of the following flowchart symbols represents a decision? A. B. C. D. 28. Which of the following flowchart symbols represents a file? A. B. C. D. 29. Which of the following flowchart symbols represents a document, such as a report? A. B. C. D. 30. Identifying the relevant behaviors and characteristics of the elements of a REAL model helps the designer: A. Create cardinalities. B. Create database tables. C. Both of the above. D. None of the above.Page 331. Fill in the blanks in each statement below based on the flowchart design considerations discussed in the text (see Chapter 5). 6 x 2 points each = 12 total a. Flowcharts should be read from __________________________ and ____________________. b. Flowcharts should have plenty of _______________________________. c. Flowcharts should have a ______________________________________. d. Flowcharts should be organized in columns that depict ___________________________________. e. Documents involved in a business process should have a clear _______________ and a clear _____________. f. The discussion of rough drafts of flowcharts with people involved in the process is known as a __________________.32. Bloom?s Risk Taxonomy identifies four categories of risk (see Chapter 4). For each of the following, identify its risk as either financial risk, hazard risk, operational risk, or strategic risk. 8 x 1 point each = 8 total___________________________ 1. Business strategy risk___________________________ 2. Credit risk___________________________ 3. Directors? and officers? liability___________________________ 4. Human error risk___________________________ 5. Legal and regulatory risk___________________________ 6. Liquidity risk___________________________ 7. Market risk___________________________ 8. Systems risk Page 4


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