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COMPUTERIZED

ACCOUNTING
MCQS - 2019
FPSC - SENIOR AUDITOR
(BS-16)
COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

1. The production subsystem of the conversion cycle includes all of the following EXCEPT
a. determining raw materials requirements.
b. makes or buy decisions on component parts.
c. release of raw materials into production.
d. scheduling the goods to be produced.

2. Which of the following files is a temporary file?


a. transaction file
b. master file
c. reference file
d. none of the above

3. Which statement is NOT true?


a. Manufacturing firms have a conversion cycle but retail firms do not.
b. The conversion cycle includes the task of determining raw materials requirements.
c. A payroll check is an example of a product document of the payroll system.
d. A journal voucher is actually a special source document.
e. Business activities begin with the acquisition of materials, property, and labor in exchange for cash
4. Which of the following statements is NOT true?
a. Sorting records that are coded alphabetically tends to be more difficult for users than sorting numeric
sequences.
b. Mnemonic codes are limited in their ability to represent items within a class.
c. Sequential codes carry no information content beyond their order in the sequence.
d. Mnemonic coding requires the user to memorize codes.
5. Which of the following is NOT an advantage of real-time processing of files over batch processing?
a. shorter transaction processing time
b. reduction of inventory stocks
c. improved customer service
d. all are advantages
6. Which statement is NOT true Batch processing
a. permits data to be edited in a separate computer run.
b. is subject to deadlocks when processing common accounts.
c. can use databases and flat files.
d. can be initiated from a terminal.
7. Which is least appropriate type of transaction for a real-time system.
a. airline reservations.
b. payroll.
c. point-of-sale transactions.
d. air traffic control systems.
e. all of these applications typically utilize real time processing.
8. Which of the following statements is not correct?
a. Database systems resolve task data dependency.
b. The flat-file model encourages data redundancy.
c. A primary goal of database systems is to mini mize data redundancy.
d. The database approach uses one common data base to promote the concept of single user view.

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

9. Which of the following is NOT true of a turn around document?


a. They may reduce the number of errors made by external parties.
b. They are commonly used by utility companies (gas, power, water).
c. They are documents used by internal parties only.
d. They are both input and output documents.
10. A documentation tool used to represent the logical elements of a system is a(n)
a. programming flowchart.
b. entity relationship diagram.
c. system flowchart.
d. data flow diagram.
11. Which of the following is NOT a true statement?
a. Transactions are recorded on ledgers and are posted to journals.
b. Transactions are recorded in journals and are posted to ledgers.
c. Infrequent transactions are recorded in the general journal.
d. Frequent transactions are recorded in special journals.
12. Which of the following is true of the relationship between subsidiary ledgers and general ledger
accounts?
a. The two contain different and unrelated data.
b. The relationship between the two constitute part of the audit trail.
c. All general ledger accounts have subsidiaries.
d. The total of subsidiary ledger accounts usually exceeds the total in the related general ledger account.
13. A documentation tool that depicts the physical flow of information relating to a particular trans
action through an organization is a (n)
a. ER diagram.
b. program flowchart.
c. decision table.
d. system flowchart.
14. A database Deadlock
a. is a lock placed on a record to prevent it from being accessed by other processes.
b. occurs when two records are accidentally assigned the same primary key
c. occurs when a unique record is accessed by several different processes simultaneously.
d. is none of the above
15. An invoice file would best be coded using a(n) coding _____________ scheme.
a. alphabetic
b. mnemonic
c. block
d. sequential
16. Which statement is NOT correct?
a. Legacy systems may process financially significant transactions.
b. Mainframes are exclusive to legacy systems, while modern systems use only the client-server model.
c. Legacy systems may use database technology.
d. All the above are true.

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

17. A coding scheme in the form of acronyms and other combinations that convey meaning is a(n)
a. sequential code.
b. mnemonic code.
c. alphabetic code.
d. block code.
18. Records of company data sent to an external party and then returned to the system as input are
called ______.
a. turnaround documents
b. source data automation documents
c. source documents
d. external input documents
19. Which of the following is NOT an advantage of an ERP system?
a. better access control
b. standardization of procedures and reports
c. improved monitoring capabilities
d. simplicity and reduced costs
20. How does the chart of accounts list general ledger accounts?
a. alphabetical order
b. chronological order
c. size order
d. the order in which they appear in financial statements
21. Which of the following is LEAST likely to be a specialized journal?
a. sales journal
b. cash receipts journal
c. prepaid insurance journal
d. cash disbursements journal
22. Which of the following documents is most likely to be used in the expenditure cycle?
a. sales orders
b. credit memo
c. receiving report
d. job time ticket
23. Which of the following is most likely to be a general ledger control account?
a. accounts receivable
b. petty cash
c. prepaid rent
d. retained earnings
24. Which of the following would contain the total value of all inventory owned by an organization?
a. source document
b. general ledger
c. cash budget
d. None of these

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

25. All of the information (name, GPA, major, etc.) about a particular student is stored in the same.
a. file
b. record
c. attribute
d. field
26. Which of the following is NOT a step in the data processing cycle?
a. data collection
b. data input
c. data storage
d. data processing
27. A firm, its suppliers, and its customers collectively form which of the following?
a)supply chain
b)value chain
c)ERP ssytem
d)AIS
28. Which of the following is a function of an AIS?
a)reducing the need to identify a strategy and strategic position
b)transforming data into useful information
c)allocating organizational resources
d)automating all decision making
29. Which of the following is NOT a means by which information improves decision making?
a)increase information overload
b)reduces uncertainty
c)provides feedback about the effectiveness of prior decisions
d)identifies situations requiring management action
30. Which of the following is a primary activity in the value chain?
a)purchasing
b)accounting
c)post-sales service
d)HR management
31. Which is a true statement regarding the use of the manual processing symbol in a flowchart?
a)If a document is moved from one column to another, show the document only in the last column.
b)Each manual processing symbol should have an input and an output.
c)Do not connect two documents when moving from one column to another.
d)Use a manual processing symbol to indicate a document being filed.
32. Which of the following is not a true statement?
a)Documentation tools save an organization both time and money.
b)Documentation tools are used extensively in the systems development process.
c)Data flow diagrams and flowcharts are the two most frequently used systems development
documentation tools.
d)Data flow diagrams and flowcharts are difficult to prepare and revise using software packages

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

33. Which of the following statements is not correct?


a)The audit trail is intended to verify the validity and accuracy of transaction recording.
b)The audit trail consists of records stored sequentially in an audit file.
c)The audit trail provides the means for locating and examining source documents.
d)The audit trail is created with document numbers and posting references.
34. Implementation of an ERP system requires increased focus on all except which of the following
controls ?
A) Segregation of duties between custody, authorization, and recording
B) Data entry controls on validity and accuracy
C) Controls over access to data
D) Appropriate disposal of hard copy reports
35. A delivery of inventory from a vendor, with whom a credit line is already established, would be
initially recorded in which type of accounting record and as part of what transaction cycle?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) cash disbursements journal; production cycle
36. In an ERP system, the module used to record data about transactions in the revenue cycle is
called
A) order to cash.
B) purchase to pay.
C) financial.
D) customer relationship management.
37. Which of the following statements about data processing methods is true?
A) Online real-time processing does not store data in a temporary file.
B) Batch processing cannot be used to update a master file.
C) Control totals are used to verify accurate processing in both batch and online batch processing.
D) Online real-time processing is only possible with source data automation.
38. Data about all of the following facets of a business activity are most likely to be recorded in a
master file except the
A) business activity.
B) resources affected by the business activity.
C) people who participate in the business activity.
D) place the business activity occurs.
39. Data about which of the following facets of a business activity is most likely to be recorded in a
transaction file?
A) Business activity
B) Resources affected by the business activity
C) People who participate in the business activity
D) Place the business activity occurs

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Prepared by: Faizan Ch - MBA-FINANCE Cell: 0333-6973219
COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

40. Which of the following statements is not correct?


A) The audit trail is intended to verify the validity and accuracy of transaction recording.
B) The audit trail consists of records stored sequentially in an audit file.
C) The audit trail provides the means for locating and examining source documents.
D) The audit trail is created with document numbers and posting references.
41. Changing an employee's hourly wage rate would be recorded where?
A) Employee master file
B) Employee transaction file
C) Special journal
D) Employee update file
42. All of the following situations would likely be communicated in an exception report except
A) production stoppages.
B) weekly credit and cash sales comparison.
C) low inventory level.
D) expense variances outside acceptable range.
43. Which of the following information would most likely be reviewed by management on an
exception report?
A) Monthly cash budget
B) Quality control system failures
C) Unit sales by territory and salesperson
D) Income statement
44. An audit trail
A) provides the means to check the accuracy and validity of ledger postings.
B) begins with the general journal.
C) is automatically created in every computer-based information system.
D) is a summary of recorded transactions.
45. A subsidiary ledger
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.
46. The general ledger
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.
47. A general journal
A) would be used to record monthly depreciation entries.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization.

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Prepared by: Faizan Ch - MBA-FINANCE Cell: 0333-6973219
COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

48. Pre-numbered checks, invoices, and purchase orders are examples of


A) sequence codes.
B) block codes.
C) group codes.
D) mnemonic codes.
49. The general ledger account that corresponds to a subsidiary ledger account is known as a
A) dependent account.
B) attribute account.
C) entity account.
D) control account.
50. When the sum of all entries in the subsidiary ledger equals the balance in the corresponding
general ledger account, it is assumed that
A) the recording processes were accurate.
B) all source documents were recorded.
C) adjusting entries are not required.
D) no errors exist in the subsidiary ledger.
51. Source documents generally help to improve accuracy in transaction processing because
A) they specify which information to collect.
B) logically related data can be grouped in the same area of the document.
C) they provide directions and steps for completing the form.
D) All of the above are correct.
52. Pre-numbering of source documents helps to verify that
A) all transactions have been recorded since the numerical sequence serves as a control.
B) source data automation was used to capture data.
C) documents have been used in order.
D) company policies were followed.
53. Which of the following is an example of source data automation?
A) a utility bill
B) POS (point-of-sale) scanners in retail stores
C) a bill of lading
D) a subsidiary ledger
54. 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
A) turnaround documents.
B) source documents.
C) source data automation.
D) transaction documents.
55. Which of the following documents would be found in the expenditure cycle?
A) delivery ticket
B) time card
C) credit memo
D) purchase order

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

56. Common source documents for the revenue cycle include all of the following except
A) sales order.
B) receiving report.
C) delivery ticket.
D) credit memo.
57. Which step below is not considered to be part of the data processing cycle?
A) data input
B) feedback from external sources
C) data storage
D) data processing
58. A typical source document could be
A) in some paper form.
B) a computer data entry screen.
C) a notepad entry.
D) both A and B
59. Changing an employee's hourly wage rate would be recorded in which file?
A) Employee master file
B) Employee transaction file
C) Payroll master file
D) Payroll transaction file
60. Which of the following is not true about the accounts receivable subsidiary ledger?
A) Debits and credits in the subsidiary ledger must always equal.
B) Every credit sale is entered individually into the subsidiary ledger.
C) The total of the subsidiary ledgers must equal the control account.
D) The subsidiary ledgers play an important role in maintaining the accuracy of the data stored in the
AIS.
61. An ERP system might facilitate the purchase of direct materials by all of the following except
A) selecting the best supplier by comparing bids.
B) preparing a purchase order when inventory falls to reorder point.
C) routing a purchase order to a purchasing agent for approval.
D) communicating a purchase order to a supplier.
62. What usually initiates data input into a system?
A) The transaction system automatically checks each hour to see if any new data is available for input and
processing.
B) The performance of some business activity generally serves as the trigger for data input.
C) A general ledger program is queried to produce a trial balance at the end of an accounting period.
D) Data is only input when a source document is submitted to the accounting department.
63. Which of the following is a test of controls for the transaction assertion of completeness for
revenue?
A. Test a sample of sales invoices for authorized customer orders.
B. Review sales orders for proper credit approval.
C. Trace shipping documents to sales invoices and the sales journal.
D. Examine reconciliation of subsidiary ledger to general ledger control account.

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Prepared by: Faizan Ch - MBA-FINANCE Cell: 0333-6973219
COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

64. Which of the following is a test of controls for the transaction assertion of completeness for
revenue?
A. Test a sample of sales invoices for authorized customer orders.
B. Review sales orders for proper credit approval.
C. Trace shipping documents to sales invoices and the sales journal.
D. Both A & B
65. Which of the following is a test of controls for the transaction assertion of completeness for
revenue?
A. Test a sample of sales invoices for authorized customer orders.
B. Review sales orders for proper credit approval.
C. Trace shipping documents to sales invoices and the sales journal.
D. Examine reconciliation of subsidiary ledger to general ledger control account.
66. Which of the following is a test of controls for the transaction assertion of completeness for
revenue?
A. Test a sample of sales invoices for authorized customer orders.
B. Review sales orders for proper credit approval.
C. Trace shipping documents to sales invoices and the sales journal.
D. Examine reconciliation of subsidiary ledger to general ledger control account.
67. Faizan works in the accounting department of a multinational manufacturing company. His job
includes updating accounts payable based on purchase orders and checks. His responsibilities are
part of the company's
A) revenue cycle.
B) expenditure cycle.
C) financing cycle.
D) production cycle.
68. Many small businesses choose to outsource their payroll activities to firms that specialize in
providing payroll services. Iqra Associates operates a payroll processing business in Lahore. When
she sends bills out to her clients, her work is part of her firm's
A) revenue cycle.
B) expenditure cycle.
C) financing cycle.
D) production cycle.
69. A delivery of inventory from a vendor, with whom a credit line is already established, would be
initially recorded in which type of accounting record and as part of what transaction cycle?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) cash disbursements journal; production cycle
70. Identify the four parts of the transaction processing cycle.
A) data input, data storage, data processing, information output
B) data input, data recall, data processing, information output
C) data input, data recall, data transmission, information output
D) data input, data recall, data transmission, data storage

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

71. What is the most frequent revenue cycle transaction?


A) purchase of inventory
B) receipt of cash
C) sale to customer
D) billing
72. The general ledger
A) is the initial place to record general expenses.
B) is posted in total to the general journal.
C) only includes balance sheet accounts.
D) summarizes the transactions in journals.
73. For a retail business, a delivery of inventory, from a vendor (with whom there is an established
credit relationship) would be initially recorded in which type of accounting record as part of which
transaction cycle?
A) purchases journal; expenditure cycle
B) general journal; expenditure cycle
C) general ledger; expenditure cycle
D) cash disbursements journal; production cycle
74. Data must be collected about three facets of each business activity. What are they?
A) the business activity, the resources it affects, the people who participate
B) the business activity, the transactions it creates, the impact on the financial statements
C) the inputs, outputs and processes used
D) who is involved, what was sold, how much was paid
75. Issuing a purchase order is part of which transaction cycle?
A) the revenue cycle
B) the expenditure cycle
C) the human resources cycle
D) the production cycle
76. The collection of employee time sheets is part of which transaction cycle?
A) the revenue cycle
B) the production cycle
C) the human resources cycle
D) the expenditure cycle

77. A purchase requisition is a common source document used to facilitate which business activity?
A) customer sale
B) receipt of goods
C) inventory purchase
D) purchase request
78. Which of the following statements regarding special journals is not true?
A) The balances in a special journal must always reconcile to the general ledger.
B) Special journals are used to record large numbers of repetitive transactions.
C) Special journals are periodically summarized and posted to the general ledger.
D) Special journals provide a specialized format for recording similar transactions.

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

79. A change in an employee's hourly pay would be recorded in


A) the payroll master file.
B) a payroll transaction file.
C) the employee master file.
D) the employee transaction file.
80. When the sum of all entries in the subsidiary ledger equals the balance in the corresponding
general ledger account, it is assumed that
A) the recording processes were accurate.
B) all source documents were recorded.
C) adjusting entries are not required.
D) no errors exist in the subsidiary ledger.
81. A chart of accounts is an example of (select all that apply)
A) sequence codes.
B) block codes.
C) group codes.
D) Both B & C
82. Product items are often coded with (select all that apply)
A) sequence codes.
B) block codes.
C) group codes.
D) mnemonic codes.
E) C & D both
83. To be effective, the chart of accounts must
A) not use alpha-numeric characters.
B) contain sufficient detail.
C) utilize only one coding technique.
D) begin with account 001.
84. The chart of accounts of a movie theater would probably include
A) retained earnings.
B) a drawing account.
C) work-in-process.
D) both A and C
85. The efficiency of recording numerous business transactions can be best improved by the use of
A) prenumbered source documents.
B) specialized journals.
C) posting references.
D) subsidiary ledgers.
86. A specialized journal
A) is used to record infrequent or non-routine transactions.
B) simplifies the process of recording large numbers of repetitive transactions.
C) records all detailed data for any general ledger account that has individual sub-accounts.
D) contains summary-level data for every account of the organization

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

87. Management accounting:


A) focuses on estimating future revenues, costs, and other measures to forecast activities and their results
B) provides information about the company as a whole
C) reports information that has occurred in the past that is verifiable and reliable
D) provides information that is generally available only on a quarterly or annual basis
88. Managers use management accounting information to ________ strategy.
A) choose
B) communicate
C) implement
D) All of these answers are correct.
89. Financial accounting:
A) focuses on the future and includes activities such as preparing next year's operating budget
B) must comply with GAAP (generally accepted accounting principles)
C) reports include detailed information on the various operating segments of the business such as product
lines or departments
D) is prepared for the use of department heads and other employees
90. The person most likely to use ONLY financial accounting information is a:
A) factory shift supervisor
B) vice president of operations
C) current shareholder
D) department manager
91. Which of the following people is LEAST likely to use management accounting information?
A) the controller
B) a shareholder evaluating a stock investment
C) the treasurer
D) an assembly department supervisor

92. Financial accounting provides the primary source of information for:


A) decision making in the finishing department
B) improving customer service
C) preparing the income statement for shareholders
D) planning next year's operating budget

93. Which of the following descriptors refers to management accounting information?


A) It is verifiable and reliable.
B) It is driven by rules.
C) It is prepared for shareholders.
D) It provides reasonable and timely estimates.
94. Which of the following statements refers to management accounting information?
A) There are no regulations governing the reports.
B) The reports are generally delayed and historical.
C) The audience tends to be stockholders, creditors, and tax authorities.
D) It primarily measures and records business transactions.

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

95. Which of the following groups would be LEAST likely to receive detailed management
accounting reports?
A) stockholders
B) sales representatives
C) production supervisors
D) managers

96. Management accounting information includes:


A) tabulated results of customer satisfaction surveys
B) the cost of producing a product
C) the percentage of units produced that are defective
D) All of these answers are correct.

97. Cost accounting:


A) provides information on the efficiency of factory labor
B) provides information on the cost of servicing commercial customers
C) provides information on the performance of an operating division
D) All of these answers are correct.

98. Which of the following types of information are used in management accounting?
A) financial information
B) nonfinancial information
C) information focused on the long term
D) All of these answers are correct.

99. Modern cost accounting plays a role in:


A) planning new products
B) evaluating operational processes
C) controlling costs
D) All of these answers are correct.
100. A data warehouse or infobarn:
A) is reserved for exclusive use by the CFO
B) is primarily used for financial reporting purposes
C) stores information used by different managers for multiple purposes
D) gathers only nonfinancial information

101. Cost accounting provides all of the following EXCEPT:


A) information for management accounting and financial accounting
B) pricing information from marketing studies
C) financial information regarding the cost of acquiring resources
D) nonfinancial information regarding the cost of operational efficiencies

102. Management accounting includes all of the following EXCEPT


A) implementing strategies
B) developing budgets
C) preparing special studies and forecasts
D) preparing the statement of cash flows

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

103. Financial accounting is concerned primarily with:


A) external reporting to investors, creditors, and government authorities
B) cost planning and cost controls
C) profitability analysis
D) providing information for strategic and tactical decisions

104. Financial accounting provides a historical perspective, whereas management accounting


emphasizes:
A) the future
B) past transactions
C) a current perspective
D) reports to shareholders

105. An Enterprise Resource Planning System can best be described as:


A) a collection of programs that use a variety of unconnected databases
B) a single database that collects data and feeds it into applications that support each of the
company's business activities, such as purchases, production, distribution, and sales
C) a database that is primarily used by a purchasing department to determine the correct amount of a
particular supply item to purchase
D) a sophisticated means of linking two or more companies to facilitate their planning processes

106. The approaches and activities of managers in short-run and long-run planning and control
decisions that increase value for customers and lower costs of products and services are known as:
A) value chain management
B) enterprise resource planning
C) cost management
D) customer value management

107. Strategy specifies:


A) how an organization matches its own capabilities with the opportunities in the marketplace
B) standard procedures to ensure quality products
C) incremental changes for improved performance
D) the demand created for products and services

108. Which of the following is NOT one of the questions management accountants might attempt to
help answer in the formulation of strategy?
A) Who are our most important customers?
B) What substitute products exist in the marketplace?
C) Does the strategy comply with GAAP (Generally Accepted Accounting Principles)?
D) Will adequate cash be available to implement the strategy?

109. In designing strategy, a company must match the opportunities and threats in the marketplace with:
A) those of the CFO (Chief Financial Officer)
B) its resources and capabilities
C) branding opportunities
D) capabilities of current suppliers

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

110. Which system is not part of the expenditure cycle?


a. cash disbursements
b. payroll
c. production planning/control
d. purchases/accounts payable
111. Which system produces information used for inventory valuation, budgeting, cost control,
performance reporting, and make-buy decisions?
a. sales order processing
b. purchases/accounts payable
c. cash disbursements
d. cost accounting
112. Which of the following is a turn-around document?
a. remittance advice
b. sales order
c. purchase order
d. payroll check
113. The order of the entries made in the ledger is by
a. transaction number
b. account number
c. date
d. user
114. The order of the entries made in the general journal is by
a. date
b. account number
c. user
d. customer number
115. In general, a special journal would not be used to record
a. sales
b. cash disbursements
c. depreciation
d. purchases
116. Which account is least likely to have a subsidiary ledger?
a. sales
b. accounts receivable
c. fixed assets
d. inventory
117. Subsidiary ledgers are used in manual accounting environments. What file is comparable to a
subsidiary ledger in a computerized environment?
a. archive file
b. reference file
c. transaction file
d. master file

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COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

118. A journal is used in manual accounting environments. What file is comparable to a journal in
a computerized environment?
a. archive file
b. reference file
c. transaction file
d. master file
119. In a computerized environment, a list of authorized suppliers would be found in the
a. master file
b. transaction file
c. reference file
d. archive file
120. Which of the following is an archive file?
a. an accounts payable subsidiary ledger
b. a cash receipts file
c. a sales journal
d. a file of accounts receivable that have been written off
121. Which document is not a type of source document?
a. a sales order
b. an employee time card
c. a paycheck
d. a sales return receipt
122. The most important purpose of a turnaround document is to
a. serve as a source document
b. inform a customer of the outstanding amount payable
c. provide an audit trail for the external auditor
d. inform the bank of electronic funds deposits
123. Which type of graphical documentation represents systems at different levels of detail?
a. data flow diagram
b. document flowchart
c. system flowchart
d. program flowchart
124. Data flow diagrams
a. depict logical tasks that are being performed, but not who is performing them
b. illustrate the relationship between processes, and the documents that flow between them and trigger
activities
c. represent relationships between key elements of the computer system
d. describe in detail the logic of the process
125. System flowcharts
a. depict logical tasks that are being performed, but not who is performing them
b. illustrate the relationship between database entities in systems.
c. represent relationships between key elements of both manual and computer systems.
d. describe the internal logic of computer applications in systems. .

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Prepared by: Faizan Ch - MBA-FINANCE Cell: 0333-6973219
COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

126. When determining the batch size, which consideration is the least important?
a. achieving economies by grouping together large numbers of transactions
b. complying with legal mandates
c. providing control over the transaction process
d. balancing the tradeoff between batch size and error detection
127. In contrast to a real-time system, in a batch processing system
a. there is a lag between the time when the economic event occurs and the financial records are updated
b. relatively more resources are required
c. a greater resource commitment per unit of output is required
d. processing takes place when the economic event occurs
128. In contrast to a batch processing system, in a real-time system
a. a lag occurs between the time of the economic event and when the transaction is recorded
b. relatively fewer hardware, programming, and training resources are required
c. a lesser resource commitment per unit of output is required
d. processing takes place when the economic event occurs
129. The type of transaction most suitable for batch processing is
a. airline reservations
b. credit authorization
c. payroll processing
d. adjustments to perpetual inventory
130. The type of transaction most suitable for real-time processing is
a. recording fixed asset purchases
b. recording interest earned on long-term bonds
c. adjusting prepaid insurance
d. recording a sale on account
131. Which step is not found in batch processing using sequential files?
a. control totals
b. sort runs
c. edit runs
d. immediate feedback of data entry errors
132. Both the revenue and the expenditure cycle can be viewed as having two key parts. These are
a. manual and computerized
b. physical and financial
c. input and output
d. batch and real-time
133. All of the following can provide evidence of an economic event except
a. source document
b. turn-around document
c. master document
d. product document

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Prepared by: Faizan Ch - MBA-FINANCE Cell: 0333-6973219
COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

134. Which method of processing does not use the destructive update approach?
a. batch processing using direct access files
b. real-time processing
c. batch processing using sequential files
d. all of the above use the destructive update approach
135. The characteristics that distinguish between batch and real-time systems include all of the
following except
a. time frame
b. resources used
c. file format
d. efficiency of processing
136. A file that stores data used as a standard when processing transactions is
a. a reference file
b. a master file
c. a transaction file
d. an archive file
137. Sequential storage means
a. data is stored on tape
b. access is achieved through an index
c. access is direct
d. reading record 100 requires first reading records 1 to 99
138. Real-time processing would be most beneficial in handling a firm's
a. fixed asset records
b. retained earnings information
c. merchandise inventory
d. depreciation records
139. Which accounting application is least suited to batch processing?
a. general ledger
b. vendor payments
c. sales order processing
d. payroll
140. Which accounting application is best suited to batch processing?
a. general ledger
b. updating inventory reductions to the subsidiary ledger
c. sales order processing
d. credit checking
141. Operational inefficiencies occur because
a. accounts both common and unique to many concurrent transactions need to be updated in real time.
b. accounts common to many concurrent transactions need to be updated in real time.
c. accounts unique to many concurrent transactions need to be updated in real time.
d. None of the above are true statements

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Prepared by: Faizan Ch - MBA-FINANCE Cell: 0333-6973219
COMPUTERIZED ACCOUNTING MCQs FOR SENIOR AUDITOR TEST

142. Operational efficiencies can be improved by


a. updating accounts both common and unique to many concurrent transactions in real time.
b. updating accounts both common and unique to many concurrent transactions in batch mode.
c. updating accounts unique to many concurrent transactions in real time and updating common
accounts in batch mode.
d. None of the above are true statements
143. The coding scheme most appropriate for a chart of accounts is
a. sequential code
b. block code
c. group code
d. mnemonic code
144. A common use for sequential coding is
a. creating the chart of accounts
b. identifying inventory items
c. identifying documents
d. identifying fixed assets
145. The most important advantage of sequential coding is that
a. missing or unrecorded documents can be identified
b. the code itself lacks informational content
c. items cannot be inserted
d. deletions affect the sequence
146. When a firm wants its coding system to convey meaning without reference to any other
document, it would choose
a. an alphabetic code
b. a mnemonic code
c. a group code
d. a block code
147. The most important advantage of an alphabetic code is that
a. meaning is readily conveyed to users
b. sorting is simplified
c. the capacity to represent items is increased
d. missing documents can be identified

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Prepared by: Faizan Ch - MBA-FINANCE Cell: 0333-6973219