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Study Resources (Accounting)

SHORT ANSWER/ESSAY QUESTIONS 1.What are the purposes of an accounting information system? 2.  What are the major components of a computerized accounting system? 3. Describe the importance of an accounting system in an organization. 4.  Identify the various types of auditors and briefly describe what they do. .
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41.What file in a computerized accounting system corresponds to a pending file in a paper-based system? A.Transaction file. B,Master file. C.Open file. D.Reference file. 42.With regard to batch v. real-time posting, which of the following is correct? A.Real-time posting is preferred because it is faster than batch posting. B.Real-time posting has no effect on computer processing time. C.Batch.
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NChapter 3 Essential Elements and Basic Activities of Accounting Systems MULTIPLE CHOICE QUESTIONS 1.Which of the following is an example of an internally generated source document? A.Debit memo from bank B.Remittance advice C.Employee time card D.Customer purchase order 2.Which of the following data elements would NOT be on a purchase order? A.Quantity ordered B.Invoice number C.Vendor number D.Product number 3.When preparing a customer.
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TRUE/FALSE QUESTIONS 1.With the implementation of e-commerce, many companies have dramatically reduced the number of their suppliers and/or customers. 2.Contemporary accounting information systems include data that could not be economically collected before the current level of computerization. 3.The largest volume of accounting information is prepared for external reporting purposes. 4.The content and format of.
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Chapter 1 Significance of Accounting Information Systems and the Accountant’s Role MULTIPLE CHOICE QUESTIONS 1.Which of the following is not accounting information? A.Total direct/indirect labor hours B.Delivery equipment cost C.Computer training schedule D.Next year’s sales budget 2.In what terms can accounting information be expressed? A.Units, percentages, and money B.Money, ratios, and text C.Money, percentages, and text D.Units, percentages, and text 3.Which of the following.
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  Problem H - V — Payroll Accounting (15 points) Romirez Company had the following payroll data for the year: Gross earnings of employees$2,400,000 Employee earnings not subject to FICA tax440,000 Employee earnings not subject to FUTA or SUTA tax1,530,000 Assume the following: FICA tax rate8% State Unemployment tax rate5.4%(SUTA) Federal Unemployment tax rate.8%(FUTA) Instructions Compute Romirez's payroll tax expense for.
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AFinal Exam: Chapters 14-23 PART I — MULTIPLE CHOICE (60 points) Instructions:  Designate the best answer for each of the following questions. ____              1.A responsibility center that incurs costs (and expenses) and generates revenues is classified as a(n)                             a.cost center.                             b.revenue center.                             c.profit center.                             d.investment center. ____              2.The most useful.
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6.Explain the difference in a special journal and a general journal. 7.Give an example of a numbering system for a chart of accounts. 8.Explain the difference in a general ledger and a subsidiary ledger. 9.Compare batch versus real-time posting. List one advantages of real-time posting and one advantage of batch.
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____              11.The most useful measure for evaluating the performance of the manager of an investment center is                             a.contribution margin.                             b.controllable margin.                             c.return on investment.                             d.income from operations. ____              12.Which of the following capital budgeting techniques explicitly takes the time value of money into consideration?                             a.Annual rate.
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____              21.A company’s planned activity level for next year is expected to be 100,000 machine hours. At this level of activity, the company budgeted the following manufacturing overhead costs:           Variable                Fixed         Indirect materials$60,000Depreciation$25,000 Indirect labor80,000Taxes5,000 Factory supplies10,000Supervision25,000 A flexible budget prepared at the 90,000 machine hours level of activity would allow total manufacturing overhead costs of              .
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31.Accountants and other users are generally concerned with which type of file organization? A.Logical B.Physical C.Functional D.Magnetic 32.Which file can update a subsidiary ledger master file? A.Customer invoice open file B.Customer master file C.Transaction file D.Inventory master file 33.Which of the following statements about posting, or updating, is correct? A.Real-time posting updates the appropriate master files immediately upon entry of transaction data.
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PART VII — RATIO ANALYSIS (21 points) The condensed financial statements of Western Corporation for 2012 are presented below. Western CorporationWestern Corporation Balance SheetIncome Statement December 31, 2012For the Year Ended December 31, 2012 AssetsRevenues$2,000,000 Current assetsExpenses Cash and short-termCost of goods sold1,080,000   investments$   30,000Selling and admin Accounts receivable70,000  expenses495,000 Inventories     110,000Interest expense              25,000 Total current assets210,000Total expenses       .
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PART II — MATCHING (18 points) Instructions: Designate the terminology that best represents the definition or statement given below by placing the identifying letter(s) in the space provided. No term should be used more than once.               A.Activity-based costing              N.              Job cost sheet               B.Annual rate of return              O.              Noncontrollable costs               C.Budgetary control             .
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11.One of the essential elements of a paper-based accounting system is a chart of accounts. 12.One of the essential elements of a paper-based accounting system is the posting of data. 13.An example of a source document is a receiving report. 14.A bill of lading is a written contract between the shipper and the.
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21.Which of the following is a use of the chart of accounts reference file? A.To store data about completed transactions B.To determine if an account number is valid C.To store data about incomplete transactions D.To store temporary data for processing 22.What is the main purpose of a general ledger master file? A.To store account balances to.
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11.Which of the following is not true about input data? A.Input data is an interface between the computer software and the accounting                                           system. B.Input data can be captured on source documents. C.Input data can be prone to errors. D.Input data can be verified by various activities. 12.Which of the following is not.
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6.What are four forms of systems documentation used frequently by accountants? 7.List three guidelines for effective systems flowcharting. Answer: Any three of the following : Start with the entry of data into the system you are flowcharting. Show all working files or database tables. Show the source and disposition of all major documents and reports..
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PART VIII — STATEMENT OF CASH FLOWS (20 points) Presented below is information related to the operations of Myers Corporation. December  2012  2011  2012_ Cash              $  55,000              $  40,000              Sales$400,000 Accounts receivable              60,000              48,000Cost of goods sold                190,000 Inventory              42,000              22,000              Gross profit              210,000 Prepaid expenses              17,000              20,000              Depreciation expense              15,000 Land              36,000              20,000              Other operating expenses                136,000 Building             .
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PART IV — RATIO ANALYSIS (14 points) The condensed financial statements of Justice Corporation for 2012 are presented below. Justice CorporationJustice Corporation Balance SheetIncome Statement December 31, 2012For the Year Ended December 31, 2012 AssetsRevenues$2,000,000 Current assetsExpenses Cash and short-termCost of goods sold900,000   investments$   40,000Selling and administrative Accounts receivable70,000  expenses800,000 Inventory    140,000Interest expense       50,000 Total current assets250,000Total expenses  1,750,000 Property, plant,.
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Chapter 2 Accounting Systems Documentation MULTIPLE CHOICE QUESTIONS 1.Accounting systems documentation is used for which of the following? A.To communicate how an accounting system works B.To communicate management's overall corporate strategy C.To describe the role of financial planners in an organization D.To depict a company's hierarchical organizational chart 2.What does the Sarbanes-Oxley Act of 2002 require relative to.
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11.An events-based accounting system captures and stores only the data needed for financial reporting. 12.One purpose of an accounting information system is to meet an organization’s statutory reporting requirements. 13.Another purpose of an accounting information system is to provide relevant and accurate accounting information to those who need it and when they.
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PART III — VARIANCE ANALYSIS (19 points) Martin Company developed the following standard costs for its product in 2012:   Standard Cost Card   Unit Standard Cost Direct materials(5 pounds @ $4.50 per pound)$22.50 Direct labor(4 hours @ $7.90 per hour)31.60 Manufacturing overhead Variable(4 hours @ $4 per hour)16.00 Fixed(4 hours @ $3 per hour)  12.00 $82.10 The company planned to work.
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TRUE/FALSE QUESTIONS 1.System documentation is prepared for the benefit of top management. 2.End-user documentation typically includes a list of programs with operating instructions. 3.Unauthorized documentation circulating in an organization should be immediately               destroyed. 4.A type of system documentation is pseudocode. 5.System documentation can include narrative description or graphical representation. 6.Because of the differences in each.
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TRUE/FALSE QUESTIONS 1.Some examples of elements of a paper-based accounting system include accounts, chart of accounts, ledgers, and outputs. 2.A bill of lading is a written contract between the shipper, the carrier engaged in the transportation of the goods, and the receiver of the goods. 3.A ledger lists transactions in chronological order and.
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PART IV — BANK RECONCILIATION (15 points) A review of the November 30 bank statement and other data of Huron Company reveals the following: 1.Balance per bank statement on November 30 ........................$17,400 2.Balance per books on November 30 ...............................$12,488 3.NSF Check from J. Smith in payment of account ......................$150 4.Collection of $3,500, 4-month, 6% note.
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MATCHING QUESTIONS Several types of system documentation are listed below. A.  System flowchart B.  Block diagram C.  Narrative description D.  Data flow diagram E.  Internal control flowchart Fill in the letter that corresponds to the type of documentation that is defined in 1-4 below.  One type may be used more than one time, and some types may.
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____              21.Barken Company's records show the following for the month of January:               Total Retained Earnings at January 1 ..................$600,000               Total Retained Earnings at January 31 .................750,000               Total Revenues ..................................1,005,000               Total Dividends Declared ...........................60,000               Total expenses for January were:               a.$1,110,000.               b.$1,155,000.               c.$855,000.               d.$795,000.               22.Stetson Company's financial information is presented below.                            .
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PART II — MATCHING (20 points) Instructions Designate the terminology that best represents the definition or statement given below by placing the identifying letter(s) in the space provided. No letter should be used more than once.               A.Additions and improvements               X.              Full disclosure principle               B.Allowance method              Y.              Going concern assumption               C.Amortization              Z.             .
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SHORT ANSWER/ESSAY QUESTIONS 1.Identify and describe the four types of files in a computerized accounting system. 2.List at least three of the six basic activities of a computerized accounting system. 3.Compare batch versus real-time posting. 4.Discuss the significant similarities between paper-based accounting systems and computerized accounting systems. 5.Identify four typical open files in a.
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11.What are the roles of people in computerized accounting systems? A.To monitor the processing of data and to interpret data B.To manufacture hardware, write software, and maintain the accounting system C.To supervise and control the accounting function D.A and B, but not C E.A, B, and C 12.Which of the following statements is not true? A.Trustworthy accounting.
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11.Documentation as it relates to accounting systems is a communication device that describes in pictures, words, or both how to use the system, and what the system does,               and how the system operates. 12.User documentation offers an inside view of the accounting system and is written in               precise technical.
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  Problem H - VI — Special Journals (15 points) Circle the correct answer to each situation. (a)A sales journal will be used for: Credit SalesCash SalesSales Discounts YesNoYesNoYesNo (b)A single-column purchases journal will be used for: Purchase Returns Cash PurchasesPurchases on Accountand Allowances YesNoYesNoYesNo (c)A multiple-column purchases journal will be used for: Supplies PurchasedEquipment Purchases Cash Purchaseson Accounton.
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11.What is another name for the accounts in a chart of accounts? A.Transaction accounts B.Control accounts C.Master accounts D.General ledger accounts 12.Which of the following is the best reason for keeping subsidiary ledger accounts current? A.To compute liquidity ratios B.To prepare financial statements C.To check if a sale will exceed a customer’s credit limit D.All of the above 13.Which of.
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PART III — ADJUSTING ENTRIES (20 points) The trial balance of Shift Company shows the following balances for selected accounts on November 30, 2012: Prepaid Insurance$  15,000Unearned Service Revenue$  1,500 Equipment40,000Notes Payable24,000 Accumulated Depreciation8,800Interest Payable400 Instructions: Using the additional information given below, prepare the appropriate monthly adjusting entries at November 30. Show computations. 1.Revenue earned for.
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21.What does the following symbol represent in a data flow diagram? A.Data store B.Flow direction C.Source or destination of data D.Process that transforms data 22.Which of the following is not a characteristic of system flowcharts? AThey are governed by national and international standards. B.They show technical details. C.They are used to guide the construction of new systems and.
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PART VI — DEPRECIATION (12 points) Huff Company purchased equipment for $800,000 cash on July 1, 2012. The estimated life is 6 years or 1,000,000 units; salvage value is estimated at $80,000. Actual activity was 180,000 units in 2012, and 200,000 units in 2013. Instructions: Compute the annual depreciation expense for 2012.
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Chapter 4 Data Flows, Activities, and Structure of Accounting Systems MULTIPLE CHOICE QUESTIONS 1.What is an example of a transaction? A.A meeting between middle and upper-level managers B.Deciding on corporate strategy C.Depreciation of equipment D.Taking action on a customer for non-payment of goods/services 2.Which of the following is (are) true regarding transactions? A.May be reported individually B.May be reported as.
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____              11.If ending inventory is overstated, net income and assets will be:               Net Income   Assets                 a.UnderstatedUnderstated               b.OverstatedOverstated               c.UnderstatedOverstated               d.Overstated Understated ____              12.One of the two constraints in accounting is:               a.comparability.               b.materiality.               c.faithful representation.               d.relevance. ____              13.The assumption that assumes a company will continue in operation long enough to carry out its existing.
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PART V — INVENTORY (12 points) Potter Company had a beginning inventory of 100 units at a cost of $13 per unit on August 1. During the month, the following purchases and sales were made.      Purchases              Sales        August4              250 units at $14August7              100 units August15              350 units at $15August11                80 units August28              200 units at.
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PART V — MISCELLANEOUS MANAGERIAL MINI-PROBLEMS (14 points) Taylor Corporation manufactures paper shredding equipment. You are requested to "audit" a sampling of computations made by Taylor's internal accountants via your independent recalculation of the information. Instructions: Compute the requested information for each of the following independent situations (present supporting calculations). (a)Taylor uses.
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____              31.Carne Manufacturing declared a 10% stock dividend when it had 200,000 shares of $5 par value common stock outstanding. The market price per common share was $15 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to:                             a.Stock Dividends of.
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11.Which of the following issues should system narrative descriptions attempt to cover? A.Relationship of every member in the organization as they pertain to the system B.Cost of the system C.The relationship between the current system documentation and any past documentation D.System specifications 12.What is the appropriate use of a narrative description? A.When there is not enough.
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  Problem H - VII — Investment Journal Entries (15 points) On January 1, Monarch  Corporation purchased a 30% equity in Crayon Creations Company for $720,000. At December 31, Crayon Creations declared and paid a $80,000 cash dividend and reported net income of $196,000. Prepare the necessary journal entries for Monarch Corporation. .
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5. Below is a list of several certification designations.  Another list provides the names of               organizations that sponsor the certifications.  Record the letter of the correct sponsoring               organization beside the certification designation.  One organization may sponsor more               than one certification. Certification DesignationCorrect answer Certified Information Systems Auditor __________ Certified.
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SHORT ANSWER/ESSAY QUESTIONS 1.Arrange by increasing amount of detail the types of system documentation that are               frequently used by accountants. 2.One guideline for creating an effective system flowchart is to show the source and               disposition of all major documents and copies of those documents.  What are four other              .
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PART I — MULTIPLE CHOICE (80 points) Instructions: Designate the best answer for each of the following questions. Questions 1 and 2 are based on the following information: Poin Company recently incurred the following costs: (1)Purchase price of land and dilapidated building$330,000 (2)Real estate broker's commission14,000 (3)Net demolition costs of dilapidated building42,000 (4)Excavation costs for new building44,000 (5)Architect's.
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PART II — MATCHING (cont.) ___              10.A characteristic of information that means it is capable of making a difference in a decision. ___              11.An assumption that the economic life of a business can be divided into artificial time periods. ___              12.This method of accounting for uncollectible accounts is required when bad debts are.
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  Problem H - IV Present Value/Future Value Calculation (10 points) Ramond Motor Works leases a building for 20 years. The lease requires 20 annual payments of $10,000 each, with the first payment due immediately. The interest rate in the lease is 10%. What is the present value of the cost of.
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31.Which of the following serves as a bridge between broad system design documentation and detailed system flowcharts? A.Data flow diagrams B.Block diagrams C.Narrative descriptions D.HIPO charts 32.Which type of documentation shows the flow of data through various stages of processing without regard for the logic of the individual processing activities? A System flowchart B.Hierarchical block diagram C.Structure chart D.Data.
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