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Accounting Process Flashcards

1
Q

Uses of Coding in AIS: _____ represent large amounts of ___ information that would otherwise be unmanageable

A

Concisely, complex

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2
Q

Uses of Coding in AIS: Provide a means of _______ over the _______of the transactions processed

A

accountability, completeness

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3
Q

Used to prenumber source documents and track each transaction processed

A

Sequential Code

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4
Q

What are the disadvantages of using sequential codes

A

-Arbitrary Information
-No information outside of the sequence
-Hard to reinsert files because it need renumbering

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5
Q

Used for chart of accounts and to represent whole classes

A

Block Codes

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6
Q

What are the advantages and disadvantages of block codes?

A

Advantages:
- Easy insertion of new codes within a block (no restructuring needed)
Disadvantages:
- Information is not readily apparent

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7
Q

Represent complex items or events involving two or more pieces of data using fields with specific meaning

A

Group Codes

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8
Q

Group Codes facilitate the representation of_________
allows complex data structures to be represented in a hierarchical form that is logical and more ________ by humans.
Permits _______ both within an item class and across different classes of items

A

large amounts of diverse data, easily remembered, detailed analysis and reporting

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9
Q

What are the disadvantages of group codes?

A

Overused and sometimes overly complex

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10
Q

Used for the many of the same purpose as numeric codes

A

Alphabetic Codes

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11
Q

Alphabetic codes can represent up to __ variations per field

A

26

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12
Q

What are the disadvantages of Alphabetic Codes?

A
  • difficult to rationalize the meaning sequentially
  • difficult to sort
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13
Q

Codes that are not needed to be memorized?

A

Mnemonic Codes

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14
Q

The General Ledger System Database is composed of?

A
  • GL Master File
    -GL History File
  • Journal Voucher File
  • Journal Voucher History File
  • Responsibility center file
    -Budge Master File
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15
Q

The principal FRS file is based on?

A

Chart of accounts

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16
Q

What is the trigger for the financial reporting process?

A

An economic event

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17
Q

What are the reports of the General Ledger?

A
  1. Listing of Transaction
  2. Allocation of expenses to cost center
  3. comparison of account balances from prior periods
  4. trial balances
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18
Q

What are the managerial reports in the general ledger system?

A

Analysis of:
1. Cash
2. Receivables
3. Sales

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19
Q

GL/FRS Control Issues: Transaction Authorization

A

journal vouchers must be authorized by a manager at the source dept

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20
Q

GL/FRS Control Issues SOD: G/L clerks should not?

A

-have recordkeeping responsibility for special journals or subsidiary ledgers
-prepare journal vouchers
-have custody of physical assets

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21
Q

GL/FRS Control Issues: Access Controls - Sarbanes-Oxley

A

Requires controls that limit database access to only authorized individuals

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22
Q

GL/FRS Control Issues: Independent Verification

A

G/L dept. reconciles journal vouchers and summaries

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23
Q

What are the two important operational reports used for independent verification

A
  1. Journal Voucher Listing
  2. General ledger change report
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24
Q

What two databases are bumped against each other in a GLS that uses databases?

A

Journal Voucher Transaction File and General Ledger Master

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25
Database Tech removes what?
Separation of Transaction Authorization and processing
26
What is the control added for the Separation of Transaction Authorization and processing in database tech
Detailed JV listing and account activity reports
27
T or F: Database Technology provides decentralized access to accounting records
False
28
T or F: MRS only produce non financial information
False. Financial information are also produced
29
Is MRS a necessity?
No. It is discretionary
30
What does Sarbanes-Oxley say about MRS?
It is required because it provides a formal means to monitor internal controls
31
formalization of tasks structure around?
tasks rather than individual skills
32
obligation to achieve desired results
Responsibility
33
power to make decisions within the limist of that responsibility
authority
34
Responsiblity and Authority are delegated by who?
Managers
35
Responsiblity and Authority define the _____________through which information flows
vertical reporting channels
36
the number of subordinates directly under the manager’s control
Span of control
37
What is the difference between narrow and wide span of control
Detailed reports: Narrow Summarized: Wide
38
Management by exception:Reports should focus on changes in key factors that are ____ of potential problems.
asymptomatic
39
Management Function, Level, and Decision Type: In the pyramid What is the role of Top, Middle, and Operations Management
Top Management: Strategic Planning Middle Management: Tactical Planning and Management Control Operations Management: Operational Control
40
Which of the three management levels and Decision Type handle management philosophy?
Top Management, Strategic Planning Decisions
41
What sources of information does strategic planning decisions need?
External and internal information sources
42
Subordinate to strategic decisions
Tactical Planning Decisions
43
using resources as productively as possible in all functional areas
Management Control Decisions
44
Why is measuring performance difficult?
Sound decisions with long-term benefits may negatively impact the short-term goals
45
What are the 3 basic elements in operational control?
1. Attainable Standards 2. Evaluate performance 3. Corrective Action
46
In terms of scope, what decision type is lower and medium impact?
Lower Impact: Management Control Medium Impact: Tactical Planning
47
In terms of level of detail, which decision type is moderately summarized and highly detailed?
Moderately Summarized: Management Control Highly Detailed: Operational Control
48
In terms of Certainty which decision type is highly certain and uncertain
Uncertain- Strategic Planning and Management Control Highly Certain- Tactical Planning and Operational Control
49
reflects and affects how well decision makers understand and solve problems
Problem Structure
50
What are the elements of a problem structure?
1. Data 2. Procedures 3. Objectives
51
How are problem structures handle from top management to operations?
Unstructured to Structured
52
What are the report Attributes?
Relevance – useful to decision making Summarization – appropriate level of detail Exception orientation – identify risks Accuracy – free of material errors Completeness – essential information Timeliness – in time for decisions Conciseness – understandable format
53
According to the FASB Conceptual Framework, What are the attributes in Relevant Information?
Feedback Value, Timely, Predictive Value
54
According to the FASB Conceptual Framework, What are the attributes in reliable information?
Representational Faithfulness Verifiable Neutral
55
What type of reports are produced at specified intervals
Scheduled Reports
56
What type of reports are triggered by events?
On-demand Reports
57
What type of reports are created when situations arise that require new information
Ad hoc reports
58
What is responsibility accounting?
Implies that every economic event that affects the organization is the responsibility of and can be traced to an individual manager
59
Budget Information flows? and becomes?
downward, increasingly detailed
60
The ___ flows upward as ____ reports
Performance information, responsibility
61
responsible for keeping costs within budgetary limits
Cost Center
62
responsible for both cost control and revenue generation
Profit Center
63
has general authority to make a wide range of decisions affecting costs, revenue, and investments in assets
Investment Center
64
___ and ___ help to appropriately assign authority and responsibility.
MRS and Compensation Schemes
64
What will happen when compensation measures are not carefully designed?
Managers may engage in actions not optimal for the organization
65
Occurs when managers receive more information than they can assimilate
Information Overload
66
Information Overload cause managers to disregard what?
Formal information
67
What are the exampls of inappropriate measures?
-price variance - quotas - profit measures
68
can affect the quality of the items purchased
Price Variance
69
can affect quality control, material usage efficiency, labor relations, plant maintenance
quota
70
can affect plant investment, employee training, inventory reserve levels, customer satisfaction
Profi Measures

Enterprise Resource Planning (3 decks)

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