1. An accounting information system is said to have good flexibility, if it ________.

A.works smoothly with the business's employees and organizational structure

B.safeguards a business's assets and reduces the likelihood of fraud and errors

C.provides information that will improve decision making and reduce uncertainty

D.accommodates changes in the business over time

At Cadmia Services, the cashier collects checks and cash from customers, and the junior accountant records the transactions in the journal. The controller approves the journal entries and bank reconciliations. The treasurer signs checks and approves contracts.

2.Which internal control procedure is exemplified in the above situation?

A.competent, reliable, and ethical personnel

B.separation of duties

C.assignment of responsibilities

D.documents

3. Before signing a check, the controller or the treasurer should examine the purchase order, the invoice, and the receiving report to determine that the company received the goods and that the company is paying only for the goods received.

True

False

4.A check payment for $658 was incorrectly entered in the Cash account as $856. Which of the following adjustments needs to be made?

A.increase the bank statement balance

B.decrease the book balance

C. decrease the bank statement balance

D.increase the book balance

5. A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the journal should be separated.

True

False

6.When a check is issued, the party who is paying the cash is referred to as the ________.

A.maker

B.depositor

C.payee

D.bank signatory

8. A petty cash fund was established with a $600 balance. It currently has cash of $18 and petty cash tickets as shown below:

Travel expense	$101
Office supplies expense	285
Equipment rental expense	79

Which of the following would be included in the journal entry to replenish the Petty Cash fund?

A.credit to Cash Short & Over for $117

B.debit to Petty Cash for $117

C.debit to Cash Short & Over for $117

D.credit to Petty Cash for $117

9.Which of the following is true of source documents in an accounting information system?

A.In a manual accounting information system, source documents refer to financial statements.

B.A manual document cannot be considered as a source document in an accounting information system.

C.Source documents provide control and reliability in an accounting information system.

D.All journal entries can be considered as source documents in an accounting information system.

10.A subsidiary ledger is ________.

A.an accounting journal designed to record a specific type of transaction

B.a created list of accounts used by a business entity to define each class of items for which cash is spent or received

C.a complete record of business transactions recorded in a ledger over the life of a company

D.a record of accounts that provide supporting details on individual balances, the total of which appears in a general ledger account

11.The purchases journal is a special journal used to record all purchases of merchandise inventory, office supplies, and other assets on account.

True

False

12. Which of the following illustrates the internal controlprocedurelong dashseparationof duties?

A.The invoices and other documents must be pre-numbered.

B.External auditors will monitor internal controls.

C.Cashiers must not have access to accounting records.

D.Electronic devices must be installed to reduce theft.

13. Entry-level accounting software ________.

A.can handle advanced processes and transactions

B.integrates all of a company's functions, departments, and data into a single system

C.allows businesses to enter sales of services and merchandise inventory, record expenses, and produce financial statements

D.is an affordable system that is difficult to use

14.Which of the following is a disadvantage of enterprise resource planning (ERP) systems?

A.It is not beneficial to large corporations.

B.Its implementation requires a large commitment of time and people.

C.It is not supported by cloud computing.

D.It uses separate software systems, such as sales and payroll.

15. If there is no cash involved in a business transaction, the transaction should be recorded in ________.

A.the general journal only

B.either the cash receipts journal or general journal

C.sales journal, purchases journal, or general journal

D.either the sales journal or purchases journal