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 information system functions. ANS:T 2. The business reporting process comprises accumulating, classifying, and recording data, fueling the financial reporting, business reporting, and other reporting subsystems. ANS: 3. The general ledger process is concerned with preparing external financial statements, ensuring they conform to GAAP, generating Web-based forms of key and related business reporting via the Internet, and supporting the generation of both ad hoc and predetermined business reports.ANS: F 4. A feeder process is any business process that accumulates event data that is then communicated to and processed by the general ledger/financial reporting (GL/BR) process. ANS: T 5. The managerial reporting officer is responsible for reporting GAAP financial statements. ANS: F 6. The financial reporting officer is primarily responsible for budgeting. ANS: F 7. The controller notifies the business reporting process of investing and financing transaction activities ANS: F 8. The chart of accounts is a list of all the accounts in the general ledger. ANS: T 9. A performance report compares actual results with budgeted expectations. ANS: T 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. ANS: T 12. The general ledger master data contains summarized information of all company event data. ANS: T 13. An audit trail provides the linkages necessary to trace financial transactions forward through the general ledger/financial reporting (GL/BR) process. ANS: F 14. The ordering of items in descending order, where each successive rank order is subordinate

to the rank above is known as numerical coding. ANS: F 15. The National Automated Accounting Research Service (NAARS) is an example of a public database service. ANS: T 16. Balanced scorecard is methodology for assessing an organization's business performance via four components: (1) financial, (2) external business process, (3) vendors, and (4) innovation and improvement activities. ANS: F 17. Business intelligence is the integration of statistical and analytical tools with decision support technologies to facilitate complex analyses of data warehouses by managers and decision makers. ANS: T 18. XML is an XBRL-based language consisting of a set of tags that are used to unify the presentation of business reporting information into a single format that can be easily read by almost any software package and can be easily searched by web browsers. ANS: F 19. XML is a generic web-based language that works on a set of user-defined tags to determine the presentation of information on a web site and to provide a key to the tags that can be applied by web users to easily search a given site. ANS: T 20. Situations where two or more personal computer network users try to access the same information resources simultaneously are described as network contention or concurrency. ANS: T 21. Call-up procedures are often used to authenticate the identity of users 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 written to floppy disks. ANS: T 23. A network computer is one that consists of a processor and a connection to the server, but it has no storage capability within itself. ANS: T 24. System access logs include reports of invalid access attempts. ANS: T 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 except: 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 reporting 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 ANS: C 4. Typically, you would expect general ledger updates for financing and investing activities 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: B 5. Typically, you would expect general ledger updates for periodic adjusting 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 knowledge 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 operating center budgets? a. general ledger accounting department b. budgeting department c. financial reporting officer d. operating department managers ANS: D 8. Which of the following usually would be responsible for preparing operating 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 investment 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 reporting 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 department 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 reporting 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 preparing internal reports: a. the financial reporting officer b. the managerial reporting officer c. the business reporting departmentd. the budgeting department ANS: B 15. Finalized budget figures are sent to the business reporting department 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 by 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 center, and investment center managers in preparing t he 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 false 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 voucher. d. To provide an adequate audit trail, a printed copy of journal vouchers is required 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 environment 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 typically 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) process, which of the following processes normally would not update the general ledger 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 accounts 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 the 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 the 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 the balanced scoreboard methodology? a. customers b. financial c. competitive environment d. internal business processes ANS: C 30. Which of the following statements related to extensible markup language is false? a. XBRL provides uniformity for users of financial statement and others simplify delivery of the information via the web. b. XBRL was created by SAP and is available for download free o... c. XBRL enables users to download information to other software pa... d. XBRL is being incorporated into new versions of ERP software. ANS: B 31. When comparing a multiuser personal computer network with stand alone 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 the 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 users who access the network from remote locations through dial-in ports. The best 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 of 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 disclosures 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 contention 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 cannot download usable data files to a floppy disk. a. network computers b. diskless workstations c. encryption d. password ANS: D