Chapter 16: Practice Questions

An adjusting entry that is made to reflect events that have occurred but for which cash has not yet been received or disbursed is called a(n):

Accrual.

Where do adjusting entries usually come from?

Controller.

Which person makes adjusting entries in the general ledger and reporting system?

Controller.

Which person makes closing entries in the general ledger and reporting system?

Controller.

An adjusting entry that is made to reflect the exchange of cash prior to performance of the related business activity is called a(n):

Deferral.

An adjusting entry that is made to record a portion of expenses that are expected to occur over multiple time periods is called a(n):

Estimate.

The purpose of employing data entry processing integrity controls is to mitigate the threat of:

Inaccurate updating of the general ledger.

What is the linkage among the portions of the balanced scorecard?

Innovation and Learning -> Internal -> Customer -> Financial

What is an important part of the audit trail?

Journal vouchers.

Preparing performance reports that contain data only about items that a specific organizational unit controls is an example of which of the following?

Responsibility accounting system.

The definition of an XBRL element, including such information as whether its normal account balance is a debit or a credit, is found in which of the following?

Schema.

Which of the following controls is designed to ensure that after updating the general ledger, assets have debit balances and liabilities have credit balances?

Sign check.

For sound internal control, which of the following sources should be permitted to update the general ledger? - Treasurer - Controller - Both - Neither

Treasurer.

Which person makes original journal entries in the general ledger and reporting system about events such as dividend payments and payments to creditors?

Treasurer.