Question 1

Which of the following statements is NOT true regarding source of capital transactions?

Accepted Answer

A) These processes should not be initiated unless there is specific authorization by management at a top level. 
B) Source of capital processes will result in potential dividend or interest payments. 
C) Retirement of debt is a source of capital process. 
D) The fact that these transactions and processes cannot occur without oversight by top management means other controls are not necessary. 
A) These processes should not be initiated unless there is specific authorization by management at a top level. 
B) Source of capital processes will result in potential dividend or interest payments. 
C) Retirement of debt is a source of capital process. 
D) The fact that these transactions and processes cannot occur without oversight by top management means other controls are not necessary.

Question 2

The officer within a corporation that usually has oversight responsibility for investment processes is the

Accepted Answer

A) Controller. 
B) Treasurer. 
C) Chief executive officer CEO). 
D) Chief accounting officer CAO). 
A) Controller. 
B) Treasurer. 
C) Chief executive officer CEO). 
D) Chief accounting officer CAO).

Question 3

Select the correct statement from the following.

Accepted Answer

A) To review purchases from a vendor inspect the purchases journal, to review payments to a vendor inspect the cash receipts journal. 
B) To review purchases from a vendor and review payments to a vendor inspect the cash disbursements journal. 
C) To review the purchases from a vendor inspect the purchases journal, to determine inventory levels of a specific item inspect the subsidiary ledger for inventory. 
D) To review the payments to a vendor inspect the cash receipts journal, to determine inventory levels of a specific item inspect the inventory journal. 
A) To review purchases from a vendor inspect the purchases journal, to review payments to a vendor inspect the cash receipts journal. 
B) To review purchases from a vendor and review payments to a vendor inspect the cash disbursements journal. 
C) To review the purchases from a vendor inspect the purchases journal, to determine inventory levels of a specific item inspect the subsidiary ledger for inventory. 
D) To review the payments to a vendor inspect the cash receipts journal, to determine inventory levels of a specific item inspect the inventory journal.

Question 4

Payroll transactions are considered:

Accepted Answer

A) Large volume daily events. 
B) Small volume daily events. 
C) Periodic events. 
D) Intermittent or infrequent events. 
A) Large volume daily events. 
B) Small volume daily events. 
C) Periodic events. 
D) Intermittent or infrequent events.

Question 5

Posting to the general ledger occurs:

Accepted Answer

A) As the transaction is recorded in the special journals. 
B) Is not required if special journals are utilized. 
C) Automatically at the end of each business day. 
D) Only when proper authorization has been given. 
A) As the transaction is recorded in the special journals. 
B) Is not required if special journals are utilized. 
C) Automatically at the end of each business day. 
D) Only when proper authorization has been given.

Question 6

Not all organizations require long-term, capital assets such as land, buildings, and equipment to operate.

Accepted Answer

A) True 
 B)False

Question 7

Good corporate governance depends mainly upon ________.

Accepted Answer

A) The ethical conduct of management 
B) The organization's profit margin 
C) The ethical conduct of low-level employees 
D) The internal controls of the organization
TEST BANK - CHAPTER 12 - TRUE / FALSE 
A) The ethical conduct of management 
B) The organization's profit margin 
C) The ethical conduct of low-level employees 
D) The internal controls of the organization
TEST BANK - CHAPTER 12 - TRUE / FALSE

Question 8

Long-term debt results from borrowing funds via:

Accepted Answer

A) Bonds and loans with payment schedules several years in the future. 
B) Stocks. 
C) Loans with payment due in the near future. 
D) All of the above, A, B, and C, are examples of long-term debt. 
A) Bonds and loans with payment schedules several years in the future. 
B) Stocks. 
C) Loans with payment due in the near future. 
D) All of the above, A, B, and C, are examples of long-term debt.

Question 9

IT controls over computer records and physical controls in general ledger storage areas minimize the related risk of:

Accepted Answer

A) Fraud and errors 
B) Invalid general ledger postings 
C) Theft and fraud 
D) Amounts posted to wrong accounts 
A) Fraud and errors 
B) Invalid general ledger postings 
C) Theft and fraud 
D) Amounts posted to wrong accounts

Question 10

Special journals are:

Accepted Answer

A) Utilized for infrequent special journal entries. 
B) For regular and recurring transactions. 
C) Not utilized in automated accounting processes. 
D) Often the source of information regarding a specific customer. 
A) Utilized for infrequent special journal entries. 
B) For regular and recurring transactions. 
C) Not utilized in automated accounting processes. 
D) Often the source of information regarding a specific customer.

Question 11

Select the correct statement from those listed below.

Accepted Answer

A) Investors and creditors use nonfinancial feedback to evaluate business performance. 
B) Internal managers need only nonfinancial feedback for proper planning and control of operations. 
C) Internal managers need reports at the same frequency as external users. 
D) Internal managers need much more frequent and detailed reports than external users. 
A) Investors and creditors use nonfinancial feedback to evaluate business performance. 
B) Internal managers need only nonfinancial feedback for proper planning and control of operations. 
C) Internal managers need reports at the same frequency as external users. 
D) Internal managers need much more frequent and detailed reports than external users.

Question 12

Business processes in an organization do not include events that are accounting transactions.

Accepted Answer

A) True 
 B)False

Question 13

There are a number of increased reporting requirements as the result of Sarbanes-Oxley and IFRS.These requirements have made it imperative for companies to:

Accepted Answer

A) Adjust the systems and controls 
B) Collect additional information needed for compliance. 
C) Well organized with the right resources to carry out the new tasks. 
D) All of the above are required. 
A) Adjust the systems and controls 
B) Collect additional information needed for compliance. 
C) Well organized with the right resources to carry out the new tasks. 
D) All of the above are required.

Question 14

As computerized accounting systems get more and more complex and integrated:

Accepted Answer

A) The level of authorization for posting gets higher in the level of responsibilities. 
B) The level of authorization for posting has not changed. 
C) The level of authorization for posting gets lower in the level of responsibilities. 
D) More levels of authorization are required. 
A) The level of authorization for posting gets higher in the level of responsibilities. 
B) The level of authorization for posting has not changed. 
C) The level of authorization for posting gets lower in the level of responsibilities. 
D) More levels of authorization are required.

Question 15

Operations processes authorize, execute, manage, and properly account for debt.

Accepted Answer

A) True 
 B)False

Question 16

Within ERP systems:

Accepted Answer

A) A single user with a password may be authorized to purchase and receive the item. 
B) Segregation of duties and responsibilities allows incompatible privileges. 
C) Purchasing requires a different approval than receiving. 
D) User profiles are not recorded within the system. 
A) A single user with a password may be authorized to purchase and receive the item. 
B) Segregation of duties and responsibilities allows incompatible privileges. 
C) Purchasing requires a different approval than receiving. 
D) User profiles are not recorded within the system.

Question 17

The transactions and resulting processes related to loans, bonds payable, and stock should be executed only when

Accepted Answer

A) Received funds have been expended through the purchase of fixed assets. 
B) The transactions are completed. 
C) Top supervisors authorize them 
D) Top management or the board of directors authorize them. 
A) Received funds have been expended through the purchase of fixed assets. 
B) The transactions are completed. 
C) Top supervisors authorize them 
D) Top management or the board of directors authorize them.

Question 18

Unethical and fraudulent behaviors are much more likely to be initiated by employees, not management.

Accepted Answer

A) True 
 B)False

Question 19

Studies show:

Accepted Answer

A) That for day-to-day operations unit data is the critical element. 
B) That for day-to-day operations general ledger dollar value is the critical element. 
C) That the general ledger dollar values have little impact on long-term time horizons. 
D) Both A and B are correct. 
A) That for day-to-day operations unit data is the critical element. 
B) That for day-to-day operations general ledger dollar value is the critical element. 
C) That the general ledger dollar values have little impact on long-term time horizons. 
D) Both A and B are correct.

Question 20

Transactions are recorded in the special journals and subsidiary ledgers:

Accepted Answer

A) At the time of the transaction. 
B) Only when approved by top management. 
C) Only during the adjusting process. 
D) Only during the closing process. 
A) At the time of the transaction. 
B) Only when approved by top management. 
C) Only during the adjusting process. 
D) Only during the closing process.

Which of the following statements is NOT true regarding source of capital transactions?

The officer within a corporation that usually has oversight responsibility for investment processes is the

Select the correct statement from the following.

Payroll transactions are considered:

Posting to the general ledger occurs:

Not all organizations require long-term, capital assets such as land, buildings, and equipment to operate.

Good corporate governance depends mainly upon ________.

Long-term debt results from borrowing funds via:

IT controls over computer records and physical controls in general ledger storage areas minimize the related risk of:

Special journals are:

Select the correct statement from those listed below.

Business processes in an organization do not include events that are accounting transactions.

There are a number of increased reporting requirements as the result of Sarbanes-Oxley and IFRS.These requirements have made it imperative for companies to:

As computerized accounting systems get more and more complex and integrated:

Operations processes authorize, execute, manage, and properly account for debt.

Within ERP systems:

The transactions and resulting processes related to loans, bonds payable, and stock should be executed only when

Unethical and fraudulent behaviors are much more likely to be initiated by employees, not management.

Studies show:

Transactions are recorded in the special journals and subsidiary ledgers:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters

Exam 12: Administrative Processes and Controls

Which of the following statements is NOT true regarding source of capital transactions?

The officer within a corporation that usually has oversight responsibility for investment processes is the

Select the correct statement from the following.

Payroll transactions are considered:

Posting to the general ledger occurs:

Not all organizations require long-term, capital assets such as land, buildings, and equipment to operate.

Good corporate governance depends mainly upon ________.

Long-term debt results from borrowing funds via:

IT controls over computer records and physical controls in general ledger storage areas minimize the related risk of:

Special journals are:

Select the correct statement from those listed below.

Business processes in an organization do not include events that are accounting transactions.

There are a number of increased reporting requirements as the result of Sarbanes-Oxley and IFRS.These requirements have made it imperative for companies to:

As computerized accounting systems get more and more complex and integrated:

Operations processes authorize, execute, manage, and properly account for debt.

Within ERP systems:

The transactions and resulting processes related to loans, bonds payable, and stock should be executed only when

Unethical and fraudulent behaviors are much more likely to be initiated by employees, not management.

Studies show:

Transactions are recorded in the special journals and subsidiary ledgers:

Introduction to AIS

Foundational Concepts of the AIS

Fraud, Ethics, and Internal Control

Internal Controls and Risks in IT Systems

IT Governance

Erp Systems

Auditing Information Technology Bases Processes

Revenue and Cash Collection Processes

Expenditures Processes and Controls - Purchases

Expenditures Processes and Controls Payroll and Fixed Assets

Conversion Processes and Controls

Data and Databases

Ecommerce and Ebusiness

Filters