Chapter 3 Review Questions


1) _ _____ is concerned with recording the financial impacts of business processes as they are executed.
A) Financial accounting (Fl)  B) Controlling (CO)
 C) Bank ledger accounting D) N one of the above

2) Which of the following is a key process in financial accounting?
A) Sales order processing         B) Accounts receivable accounting
 C) Credit management                     D) Income verification

3) Which process is used to manage money owed by customers for goods and services purchased from the company?
A) Accounts receivable accounting     B) Fixed asset accounting
 C) Bank ledger accounting                D) All of the above

4) _ _______ are internal divisions of an enterprise that are used to define areas of responsibility or to meet the external reporting requirements of an enterprise segment.
A) Cost centers              B) Business area
C) Depreciation areas      D) Sub- ledgers

5) Which term refers to an ordered listing of accounts that comprise a company's general ledger?
A) General ledger                    B) Balance sheet
C) Chart of accounts (COA)     D) Bank ledger


6) Which term represents what a company owns, such as cash, inventory of materials, and buildings?
A) Liabilities          B) Equity     C) Assets    D) Revenues

7) Which term represents what a company owes to others, including money owed to vendors and loans from financial institutions?
A) Liabilities          B) Equity     C) Assets    D) Revenues

8) Which term represents the monies a company earns by selling its products and services?
A) Liabilities          B) Equity     C) Assets   D) Revenues

9) Which term represents the costs associated with creating and selling products and services?
A) Assets    B) Expenses         C) Liabilities          D) Equity

10) Which element is a part of the typical company code data in general ledger account?
A) Tax- related data        B) Field status groups
C) Line item display        D) All of the above

11) Which term is a general ledger account that consolidates data from a group of related sub- ledger accounts?
A) Sub- ledger               B) Reconciliation account
C) Line item display        D) None of the above

12) Which of the following is used to implement multiple ledgers and use each ledger for different purposes?
A) Financial accounting document      B) Subsidiary ledger
C) Sub- ledger                                 D) Parallel accounting

13) Which type of asset has a physical form?
A) Master asset     B) Tangible asset   C) Informal asset D) Intangible asset

14) Which type of asset has a non- physical form?
A) Intangible asset B) Master asset    C) Tangible asset   D) Informal asset

15) Which of the following is used to report data needed to meet legal and regulatory requirements?
A) Assets B) Equity C) Tangible document            D) Financial statement

16) Which of the following is not a mode of acquiring an asset for a company?
A) Acquiring internally via the production process
B) Acquire from a vendor using the purchasing process
C) Acquire from a vendor without using the purchasing process
D) Selling equipment

17) All of the following are transaction types that occur during the life of an asset except
A) Acquisition       B) Depreciation     C) Allocation         D) Retirement

18) Balance sheet accounts are grouped into which of the following categories?
A) Revenue           B) Assets     C) Liabilities          D) Equity

19) An organization can possess which of the following types of assets?
A) Tangible           B) Intangible         C) Financial          D) Economic

20) Tangible assets can include which of the following?
A) Computers B) Bonds C) Production Machinery         D) Real Estate

21) W hat is true about a business area?
A) It is a internal division of an enterprise    
B) It helps management monitor performance
C) It is used for external reporting
D) It is associated with one company code

22) Which of the following are types of chart of accounts?
A) Operative COA          B) Country specific COA
C) Active COA               D) Group COA

23) What does the COA data include?
A) Client segment           B) Storage location segment
C) Plant segment            D) Company code segment

24) Which attributes are present in the FI document items?
A) Amount           B) Posting key      C) Document type          D) Currency

25) Which attributes are present in the FI document header?
A) Document type                   B) Posting date      C) Currency         D) Amount

26) When does a credit take place?
A) When assets and expenses decrease
B) When assets and expenses increase
C) When revenue and liabilities decrease
D) When revenue and liabilities increase

TRUE/FALSE. Write ʹTʹ if the statement is true and ʹFʹ if the statement is false.
 27) Accounting processes are broadly divided into two main categories: Financial accounting and management accounting
Answer: True False

28) Financial accounting (FI) is concerned with recording the financial impacts of business processes as they executed.
Answer: True False

29) Management Accounting (CO) is intended primarily for audiences outside the organization.
Answer: True False

30) The general ledger is used to record the financial impacts of business process steps.
Answer: True False

31) A chart of accounts (COA) is an ordered listing of accounts that comprise a companyʹ s general ledger.
Answer: True False

32) Liabilities are what the company owns, such as cash, land, and buildings.
Answer: True False

33) Account currency determines the currency in which all the transactions are recorded.
Answer: True False

34) An increase in an asset account or an expense account results in a credit posting.
Answer: True False

35) An increase in revenue or liability results in a debit posting.
Answer: True False
36) Accounts payable accounting is concerned with vendors. 36) ______
Answer: True False

37) Accounts receivable accounting is concerned with customers.
Answer: True False

38) Intangible assets are physical items such as buildings, machinery, and computers.
Answer: True False

39) Tangible assets are non- physical items such as trademarks and patents.
Answer: True False

40) Reporting within financial accounting is divided into two categories: generating financial statements and displaying account information.
Answer: True False

No comments:

Post a Comment