Chapter 16 The General Ledger and Business Reporting (GL/BR) Process TRUE/FALSE 1.

The GL/BR process is an interacting structure of people, equipment, methods, and controls that is designed to accomplish both operations and inform ation system functions. ANS: T

2. The business reporting process comprises accumulating, classifying, and recording data, fueling the financial reporting, business reporting, and ot her reporting subsystems.. ANS: F

3. The general ledger process is concerned with preparing external fin ancial statements, ensuring they conform to GAAP, generating Web-based forms of key financial statement and related business reporting via the Internet, and sup porting the generation of both ad hoc and predetermined business reports. ANS: F

4. A feeder process is any business process that accumulates event dat a that is then communicated to and processed by the general ledger/financial rep orting (GL/BR) process. ANS: T

5. The managerial reporting officer is responsible for reporting GAAP financial statements. ANS: 6. ing. ANS: F F The financial reporting officer is primarily responsible for budget

7. The controller notifies the business reporting process of investing and financing transaction activities ANS: 8. ledger. ANS: 9. ions. ANS: T T A performance report compares actual results with budgeted expectat F The chart of accounts is a list of all the accounts in the general

10. Often, performance reports are part of a managerial reporting system known as a responsibility accounting system. ANS: T 11. A journal voucher is an internal source document used to notify the general ledger to make an accounting entry.

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12. The general ledger master data contains summarized information of al l company event data. ANS: T

13. An audit trail provides the linkages necessary to trace financial tr ansactions forward through the general ledger/financial reporting (GL/BR) proces s. ANS: F

14. The ordering of items in descending order, where each successive ran k order is subordinate to the rank above is known as numerical coding. ANS: F

15. The National Automated Accounting Research Service (NAARS) is an exa mple of a public database service. ANS: T

16. Balanced scorecard is methodology for assessing an organization's bu siness performance via four components: (1) financial, (2) external business pro cess, (3) vendors, and (4) innovation and improvement activities. ANS: F

17. Business intelligence is the integration of statistical and analytic al tools with decision support technologies to facilitate complex analyses of da ta warehouses by managers and decision makers. ANS: T

18. XML is an XBRL-based language consisting of a set of tags that are u sed to unify the presentation of business reporting information into a single fo rmat that can be easily read by almost any software package and can be easily se arched by web browsers. ANS: F

19. XML is a generic web-based language that works on a set of user-defi ned tags to determine the presentation of information on a web site and to provi de a key to the tags that can be applied by web users to easily search a given s ite. ANS: T

20. Situations where two or more personal computer network users try to access the same information resources simultaneously are described as network co ntention or concurrency. ANS: T

21. Call-up procedures are often used to authenticate the identity of us ers who access a network from remote locations through dial-in ports. ANS: F

22. A diskless workstation contains no disk drive so no data can be writ ten to floppy disks. ANS: T

23. A network computer is one that consists of a processor and a connect ion to the server, but it has no storage capability within itself. ANS: 24. ANS: T T System access logs include reports of invalid access attempts.

25. The intent of Sarbanes Oxley is to protect the company by improving the accuracy and reliability of all disclosures. ANS: F MULTIPLE CHOICE 1. The general ledger process comprises all of the following except: a. providing information for financial reporting b. serving the needs of managerial reporting c. classifying data by general ledger accounts d. none of the above ANS: D

2. The business reporting process comprises all of the following excep t: a. preparing general purpose external financial statements b. generating ad hoc and predetermined business reports for management c. ensuring that the external financial statements adhere to GAAP d. none of the above ANS: D

3. In contrast to the managerial reporting process, the financial repo rting process prepares all of the following financial statements except: a. the balance sheet b. the income statement c. the standard costing variance report d. the statement of owner equity changes

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4. Typically, you would expect general ledger updates for financing an d investing activities to be fed to the general ledger/financial reporting (GL/B R) process by: a. the controller b. the treasurer c. the chief executive officer (CEO) d. one of the AIS feeder systems ANS: B

5. Typically, you would expect general ledger updates for periodic adj usting entries (e.g., for depreciation, accruals, and the like) to be fed to the general ledger/financial reporting (GL/BR) process by: a. the controller b. the treasurer c. the chief executive officer (CEO) d. one of the AIS feeder systems ANS: A

6. Which of the following individuals should possess the greatest know ledge of GAAP? a. general ledger accounting department manager b. budgeting department manager c. financial reporting officer d. managerial reporting officer ANS: C

7. Which of the following usually would be responsible for preparing o perating center budgets? a. general ledger accounting department b. budgeting department c. financial reporting officer d. operating department managers ANS: 8. D Which of the following usually would be responsible for preparing o

perating center performance reports? a. general ledger accounting department b. budgeting department c. financial reporting officer d. managerial reporting officer ANS: D

9. Normally, you would expect that operating event data updates would be sent to the general ledger/business reporting (GL/BR) process by: a. the controller b. the treasurer c. the vice president of finance d. various business feeder processes ANS: D

10. Performance reports to various cost center, profit center, and inves tment center managers are usually sent by? a. the controller b. the treasurer c. the managerial reporting officer d. the budgeting department ANS: C

11. Actual and budgeted figures are usually sent to the managerial repor ting officer by a. the controller b. the treasurer c. the business reporting department d. the budgeting department ANS: C

12. Actual and budgeted figures are usually sent to the budgeting depart ment from a. the controller b.

the treasurer c. the business reporting department d. the managerial reporting officer ANS: C

13. Adjusted trial balance figures are usually sent from the business re porting department to the: a. the financial reporting officer b. the managerial reporting officer c. the business reporting department d. the budgeting department ANS: A

14. Which of the following has responsibilities and expertise to prepari ng internal reports: a. the financial reporting officer b. the managerial reporting officer c. the business reporting department d. the budgeting department ANS: B

15. Finalized budget figures are sent to the business reporting departme nt by a. the financial reporting officer b. the budgeting department c. the business reporting department d. the managerial reporting officer ANS: B

16. Although the controller usually provides adjustments as mandated b y GAAP, who else might provide adjusting entry data? a. the financial reporting officer b. the budgeting department c. the business reporting department d.

none of the above ANS: A

17. Which of the following advises and assists the cost center, profit c enter, and investment center managers in preparing the budget? a. the financial reporting officer b. the budgeting department c. the business reporting department d. none of the above ANS: B

18. Which of the following could be a journal voucher? a. general ledger cash disbursements update b. customer invoice c. receiving report d. purchase requisition ANS: A

19. Which of the following statements related to journal vouchers is fal se for most ERP systems? a. The person completing the adjustment will enter it directly into the computer. b. The voucher will be electronic. c. Business event updates from feeder systems may take the form of a journal vouche r. d. To provide an adequate audit trail, a printed copy of journal vouchers is requir ed to capture the signature of the person making the entry. ANS: D

20. Which of the following is most related to vertical information flow in the GL/BR process? a. treasury's financing functions b. payroll c. order entry/sales d.

budgeting ANS: D

21. Which of the following is least likely to be part of the relevant en vironment of the general ledger/business reporting (GL/BR) process? a. the order entry/sales process b. the billing/accounts receivable/cash receipts process c. the purchasing/accounts payable/cash disbursements process d. the inventory process ANS: D

22. Inputs to a general ledger/business reporting (GL/BR) process typica lly include all of the following except: a. adjusting entry journal voucher b. adjusted trial balance c. finalized budget d. GAAP-based financial statements ANS: D 23. In a logical DFD for the general ledger/business reporting (GL/BR) p rocess, which of the following processes normally would not update the general l edger master data? a. Record budget. b. Post events data c. Record adjustments. d. Prepare financial statements. ANS: D

24. The general ledger master data does not contain: a. adjusting entry data b. customer number c. totals extracted by event type from business event data d. a chart of accounts ANS: B

25. Tracing back to individual business events that have been aggregated into account balances is done by means of a(n): a.

electronic reference service b. general ledger account c. audit trail d. data dictionary ANS: C

26. The coding system typically used in the general ledger chart of acco unts is: a. serial coding b. hierarchical coding c. block coding d. mnemonic coding ANS: B

27. An account in the chart of accounts has the number 1113. Which of t he following does the 3 likely represent? a. assets b. current assets c. cash accounts d. cash in bank ANS: D

28. An account in the chart of accounts has the number 7111. Which of t he following does the 7 likely represent? a. revenues b. sales region c. merchandise sales d. golf merchandise sales ANS: A

29. Which of the following items is not one of the four components of th e balanced scoreboard methodology? a. customers b. financial c. competitive environment d. internal business processes

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30. Which of the following statements related to eXtensible markup langu age is false? a. XBRL provides uniformity for users of financial statement and other business rep orting information in order to simplify delivery of the information via the web. b. XBRL is was created by SAP and is available for download free of charge via the web. c. XBRL enables users to download information to other software packages. d. XBRL is being incorporated into new versions of ERP software. ANS: B

31. When comparing a multiuser personal computer network with stand alon e personal computers, the most important control issue related to the network is : a. physical protection of the equipment b. minimizing the cost of redundant software c. ensuring the validity of users d. providing adequate training of users ANS: C

32. Control plans for a networked multiuser environment address all of t he following issues except: a. physical protection of the equipment and data b. minimizing the cost of add on modules c. ensuring the validity of users d. how to recover from a system failure ANS: B

33. An organization is concerned about authenticating the identify of us ers who access the network from remote locations through dial-in ports. The bes t defense against unauthorized access is to utilize a(n): a. password b. automatic log-out c. call-back procedure d. encryption ANS: C

34. A diskless workstation has all of the following capabilities except: a. doing mathematical calculations b. writing to a floppy disk c. printing a report or other output d. downloading data from a central database ANS: B

35. A network computer workstation has all of the following capabilities except: a. doing mathematical calculations b. printing reports c. saving to a hard disk d. downloading data from a central database ANS: C

36. The personal computer networking term that refers to obtaining data from a host computer's database is: a. file server b. network operating software c. downloading d. front-end machine ANS: C

37. A control procedure for workstation networks that includes reports o f invalid access attempts is called: a. file and record locking b. password protection c. call-back procedures d. system access logs ANS: D

38. The intent of the Sarbanes Oxley Act is: a. to protect investors by improving the accuracy and reliability of corporate disc losures b.

to improve GAAP c. to increase the speed of disclosures d. to strengthen the internal audit department ANS: A

39. Which of the following control plans is directed at resolving conten tion between two network users? a. call-back procedures b. diskless workstations c. file and record locking d. system access logs ANS: C

40. What is the least effective method of ensuring that invalid users of an ERP can not download usable data files to a floppy disk. a. network computers b. diskless workstations c. encryption d. password ANS: D