Source Documents – Accounting & Finance Quiz

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Source Documents – Accounting & Finance Quiz

The key terms in these Finance chapters include Source Documents.


In a revenue cycle with proper controls, the ________ who reports to the ________, is not involved in any cash handling activities.

accounts receivable clerk; treasurer

cashier; treasurer

accounts receivable clerk; controllerCorrect

cashier; controller


The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas. He ordered 100 one-size fits all pajama bottoms, but when he ordered 1000 one-size fits all pajama tops, the following error message popped up: “Did you mean to enter a quantity of 1000 for your order?” This message is the result of a

validity check.

reasonableness test.Correct

limit check.

closed-loop verification.


Which of the following poses an internal control problem?

Products are released from inventory after a warehouse employee and a shipping clerk both sign the pick list.

Sales representatives have authority to increase customers’ credit limits in $1,000 increments.Correct

Physical inspection of inventory quantity and condition is outsourced to a firm that specializes in this service.

When customer payments are received in the mail, checks are sent to the cashier’s office and remittance advices are sent to the accounts receivable department.


Virtualization refers to the ability of

using the Internet to perform all needed system functions.

eliminating the need for a physical computer.

using web-based security to protect an organization.

running multiple systems simultaneously on one physical computer.Correct


Documents that are sent to customers or suppliers and then sent back to the company in the course of a business transaction are known as

turnaround documents.Correct

input documents.

source documents.

transaction documents.


The type of journal that records large numbers of repetitive transactions such as sales, cash receipts, and cash disbursements is

a detailed transaction journal.

a specialized journal.Correct

a subsidiary journal.

a general journal.


What role should an auditor play in system development?

an advisor and developer of internal control specifications

an independent reviewer onlyCorrect

a developer of internal controls

A and B above


Who generally is responsible for providing the accounting department with information about financing and investing activities to create the appropriate general ledger journal entries?

The budget department.

The CEO.

The treasurer.Correct

The CFO.


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

numerical sequence.

general ledger account number order.Correct

any order, since you have to review them all anyway.

chronological order.


In a revenue cycle with proper controls, the ________ who reports to the ________, is not involved in any cash handling activities.

accounts receivable clerk; treasurer

cashier; treasurer

accounts receivable clerk; controller – Correct

cashier; controller


The manager of Callow Youth Clothing was entering an order online from Sad Clown Pajamas. He ordered 100 one-size fits all pajama bottoms, but when he ordered 1000 one-size fits all pajama tops, the following error message popped up: “Did you mean to enter a quantity of 1000 for your order?” This message is the result of a

validity check.

reasonableness test. – Correct

limit check.

closed-loop verification.


Which of the following poses an internal control problem?

Products are released from inventory after a warehouse employee and a shipping clerk both sign the pick list

Sales representatives have authority to increase customers’ credit limits in $1,000 increments. – Correct

Physical inspection of inventory quantity and condition is outsourced to a firm that specializes in this service.

When customer payments are received in the mail, checks are sent to the cashier’s office and remittance advices are sent to the accounts receivable department.


Virtualization refers to the ability of

using the Internet to perform all needed system functions.

eliminating the need for a physical computer.

using web-based security to protect an organization.

running multiple systems simultaneously on one physical computer. – Correct


Documents that are sent to customers or suppliers and then sent back to the company in the course of a business transaction are known as

turnaround documents. – Correct

input documents.

source documents.

transaction documents.


The type of journal that records large numbers of repetitive transactions such as sales, cash receipts, and cash disbursements is

a detailed transaction journal.

a specialized journal. – Correct

a subsidiary journal.

a general journal.


What role should an auditor play in system development?

an advisor and developer of internal control specifications

an independent reviewer only – Correct

a developer of internal controls

A and B above


Who generally is responsible for providing the accounting department with information about financing and investing activities to create the appropriate general ledger journal entries?

The budget department.

The CEO.

The treasurer. – Correct

The CFO.


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

numerical sequence.

general ledger account number order. – Correct

any order, since you have to review them all anyway.

chronological order.


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