ACCT 321 EXAM 3 CH 12-16

Depreciation expense and bad debt expense are examples of which type of adjusting journal entry? A) deferrals B) accruals C) revaluations D) estimates

D) estimates

Payroll deductions fall into the broad categories of ________ and ________. A) payroll tax withholdings; voluntary deductions B) unemployment; social security taxes C) unemployment taxes; income taxes D) voluntary deductions; income taxes

A) payroll tax withholdings; voluntary deductions

**Budgets and performance reports should be developed on the basis of A) responsibility accounting. B) generally accepted accounting principles. C) financial accounting standards. D) managerial accounting standards.

A) responsibility accounting.

**Performance reports for sales deparments should compare actual versus budget A) revenue. B) cost. C) return on investment. D) profit.

A) revenue.

**Which activity below is not performed by the HRM? A) compensation B) training C) discharge D) recruitment and hiring

A) compensation

This organization provides payroll processing as well as other HRM services, such as employee benefit design and administration. A) Cashier B) Payroll service bureau C) Professional employer organization D) Paycheck distribution companies

C) Professional employer organization

Which of the following is a control that addresses the threat of unauthorized changes to the payroll master file? A) Field checks B) Batch totals C) Segregation of duties D) Sound hiring procedures

C) Segregation of duties

What is the best control to reduce the risk of losing payroll data? A) passwords B) physical security controls C) backup and disaster recovery procedures D) encryption

C) backup and disaster recovery procedures

**Many companies offer their employees a "cafeteria" approach to voluntary benefits in which employees can pick and choose the benefits they want. This plan is normally called a(n) A) elective plan. B) menu options benefit plan. C) flexible benefit plan. D) buffet plan.

C) flexible benefit plan.

**Experts estimate that on average the costs associated with replacing an employee are about ________ that of the employee's annual salary. A) one-quarter B) one-half C) one and one-half D) twice

C) one and one-half

**Performance reports for cost centers should compare actual versus budget ________ costs. A) controllable B) uncontrollable C) fixed D) variable

A) controllable

For recording time spent on specific work projects, manufacturing companies usually use a A) job time ticket. B) time card. C) time clock. D) labor time card.

A) job time ticket.

**Cheryl Liao is an accountant at Folding Squid Technologies. While making an adjusting entry to the general ledger, she received the following error message, "The account number referenced in your journal entry does not exist. Do you want to create a new account?" This message was the result of a A) validity check. B) closed loop verification. C) zero-balance check. D) completeness test.

A) validity check.

Immediately after the adjusting entries are posted, the next step in the general ledger and reporting system is to prepare A) an adjusted trial balance. B) closing entries. C) financial statements. D) an unadjusted trial balance.

A) an adjusted trial balance.

**As responsibility reports are rolled up into reports for higher level executives, they A) become less detailed. B) become more detailed. C) become narrower in scope. D) look about the same.

A) become less detailed.

**Why is a separate payroll account used to clear payroll checks? A) for internal control purposes to help limit any exposure to loss by the company B) to make bank reconciliation easier C) banks don't like to commingle payroll and expense checks D) All of the above are correct.

A) for internal control purposes to help limit any exposure to loss by the company

Which type of payroll report lists the voluntary deductions for each employee? A) payroll register B) deduction register C) earnings statement D) federal W-4 form

B) deduction register

An adjusting entry made at the end of an accounting period that reflects the exchange of cash prior to performance of a related event is classified as a(n) A) accrual entry. B) deferral entry. C) revaluation entry. D) correcting entry

B) deferral entry.

**Adjusting entries that are made to recognize revenue that has been received but not yet earned are classified as A) estimates. B) deferrals. C) accruals. D) revaluations.

B) deferrals.

What step can be taken to reduce the distribution of fraudulent paychecks? A) have internal audit investigate unclaimed paychecks B) allow department managers to investigate unclaimed paychecks C) immediately mark "void" across all unclaimed paychecks D) match up all paychecks with time cards

A) have internal audit investigate unclaimed paychecks

**If you believe not all adjusting entries were posted in the general ledger, you should prepare a general ledger control report listing journal vouchers in A) numerical sequence. B) chronological order. C) general ledger account number order. D) any order, since you have to review them all anyway.

A) numerical sequence.

Which type of payroll report contains information such as the employees' gross pay, payroll deductions, and net pay in a multicolumn format? A) payroll register B) deduction register C) employee earnings statement D) federal W-4 form

A) payroll register

The sales department administrative assistant has been assigning phone order sales to her brother-in- law, a company sales person. Company policy is to pay commissions only on orders directly received by sales people, not on orders received over the phone. The resulting fraudulent commission payments might best have been prevented by requiring that A) sales commission statements be supported by sales order forms signed by the customer and approved by the sales manager. B) sales order forms be prenumbered and accounted for by the sales department manager. C) sales orders and commission statements be approved by the accounting department. D) disbursement vouchers for commission payments be reviewed by the internal audit department and compared to sales commission statements and sales orders.

A) sales commission statements be supported by sales order forms signed by the customer and approved by the sales manager.

The employer pays a portion of some payroll taxes and employee benefits. Both the employee and employer pay which benefit or tax listed below? A) social security taxes B) federal income taxes C) state income taxes D) none of the above

A) social security taxes

**All of the following are controls that should be implemented in a payroll process, except A) supervisors distribute paychecks since they should know all employees in their department. B) someone independent of the payroll process should reconcile the payroll bank account. C) sequential numbering of paychecks and accounting for the numbers. D) restrict access to blank payroll checks and documents.

A) supervisors distribute paychecks since they should know all employees in their department.

**What is the purpose of a general ledger payroll clearing account? A) to check the accuracy and completeness of payroll recording and its allocation to cost centers B) to make the bank reconciliation easier C) to make sure that all employees are paid correctly each week D) to prevent the cashier from having complete control of the payroll cycle

A) to check the accuracy and completeness of payroll recording and its allocation to cost centers

A type of data entry control that would ensure that adjusting entries are posted to existing general ledger accounts is called a(n) ________ check. A) validity B) existence C) closed loop verification D) reasonableness

A) validity

**Cheryl Liao is an accountant at Folding Squid Technologies. While making an adjusting entry to the general ledger, she received the following error message, "Your journal entry must be a numeric value. Please reenter." This message was the result of a A) validity check. B) field check. C) zero-balance check. D) completeness test.

B) field check.

Which of the following balanced scorecard dimensions provides measures on how efficiently and effectively the organization is performing key business processes? A) financial B) internal operations C) innovation and learning D) customer

B) internal operations

Companies that specialize in processing payroll are known as A) paycheck distribution companies. B) payroll service bureaus. C) professional employer organizations. D) semi-governmental organizations

B) payroll service bureaus.

Departments that mostly provide services to other units and charge those units for services rendered should be evaluated as ________ centers. A) cost B) profit C) investment D) revenue

B) profit

**Which item below is not considered a major input to the general ledger and reporting system? A) summary entries from the major subsystems B) reports from managers C) adjusting entries D) financing and investing activities

B) reports from managers

Adjusting entries that are made to reflect differences between the actual and recorded value of an asset or a change in accounting principle are called A) reconciliations. B) revaluations. C) estimates. D) accruals.

B) revaluations.

Which of the following deductions is not classified as a voluntary deduction? A) pension plan contributions B) social security withholdings C) insurance premiums D) deductions for a charity organization

B) social security withholdings

The document that lists each employee's gross pay, payroll deductions, and net pay in a multicolumn format is called A) an employee earnings statement. B) the payroll register. C) a deduction register. D) an employee time sheet summary

B) the payroll register.

The payroll transaction file would contain A) entries to add new hires. B) time card data. C) changes in tax rates. D) All of the above are correct.

B) time card data.

Variances for variable costs will be misleading when the planned output differs from budgeted output. A solution to this problem would be A) calling all costs fixed. B) to use flexible budgeting. C) better prediction of output. D) to eliminate the budgeting process.

B) to use flexible budgeting.

As the payroll system processes each payroll transaction, the system should also perform which activity listed below? A) allocate labor costs to appropriate general ledger accounts B) use cumulative totals generated from a payroll to create a summary journal entry to be posted to the general ledger C) both A and B above D) The HRM system should not perform either activity A or B

C) both A and B above

**Which of the following is not one of the major sources of input to the payroll system? A) payroll rate changes B) time and attendance data C) checks to insurance and benefits providers D) withholdings and deduction requests from employees

C) checks to insurance and benefits providers

**Which control would be most appropriate to address the problem of inaccurate payroll processing? A) encryption B) direct deposit C) cross-footing of the payroll register D) an imprest payroll checking account

C) cross-footing of the payroll register

The operating budget A) compares estimated cash flows from operations with planned expenditures. B) shows cash inflows and outflows for each capital project. C) depicts planned revenues and expenditures for each organizational unit. D) is used to plan for the purchase and retirement of property, plant, and equipment.

C) depicts planned revenues and expenditures for each organizational unit.

Which type of payroll report includes the details of the current paycheck and deductions as well as year-to-date totals? A) payroll register B) deduction register C) earnings statement D) federal W-4 form

C) earnings statement

**If you believe a general ledger account was not adjusted properly or at all, you should prepare a general ledger control report listing journal vouchers in A) numerical sequence. B) chronological order. C) general ledger account number order. D) any order, since you have to review them all anyway.

C) general ledger account number order.

**The threat of violation of employment laws relates directly to which activity? A) payroll processing B) collecting employee time data C) hiring and recruiting D) all of the above

C) hiring and recruiting

**The general ledger and reporting system consists of the ________ involved in ________ the general ledger and ________ reports. A) business transactions; updating; processing B) data processing; business transactions for; printing C) information processing; updating; creating D) business transactions; data processing; preparing

C) information processing; updating; creating

**The general ledger system of an organization should be designed to serve the information requirements of both internal and external users. This means that the system should support A) producing expansive regular periodic reports to cover all information needs. B) the real-time inquiry needs of all users. C) producing regular periodic reports and respond to real-time inquiry needs. D) access by investors and creditors of the organization to general ledger balances

C) producing regular periodic reports and respond to real-time inquiry needs.

Adjusting entries that reflect events that have already occurred, but for which no cash flow has taken place are classified as A) accruals. B) deferrals. C) revaluations. D) corrections.

A) accruals.

**A listing of journal vouchers by numerical sequence, account number, or date is an example of A) a general ledger control report. B) a budget report. C) a batch to be processed. D) responsibility accounting.

A) a general ledger control report.

**Recording interest earned on an investment is an example of which type of adjusting journal entry? A) accrual entry B) deferral entry C) revaluation entry D) correcting entry

A) accrual entry

**Which of the following scenarios will not be allowed under IFRS? A) A landscaping and garden retail store keeps piles of river rock, gravel, paving stones, and small decorative rocks in a fenced area on the side of the store. The store uses the most recent inventory costs when calculating cost of goods sold, since new inventory is piled on top of the older inventory. B) A grocery store strictly enforces a shelf rotation policy, so that older inventory is always at the front and sold first. The store uses the oldest inventory costs to calculate cost of goods sold. C) A farm chemical supplier maintains a large holding tank of chemicals, into which deliveries are periodically combined with the older chemicals. The supplier averages the cost of all inventory to calculate cost of goods sold. D) All of the above are acceptable under IFRS.

A) A landscaping and garden retail store keeps piles of river rock, gravel, paving stones, and small decorative rocks in a fenced area on the side of the store. The store uses the most recent inventory costs when calculating cost of goods sold, since new inventory is piled on top of the older inventory.

Requiring all packing slips be reconciled to purchase orders before accepting a delivery of inventory would be most likely to prevent which of the following situations? A) A supplier delivers more inventory than ordered at the end of the year and sends an invoice for the total quantity delivered. B) An employee mails a fake invoice to the company, which is then paid. C) The inventory records are incorrectly updated when a receiving department employee enters the wrong product number on the receiving report. D) Receiving department employees steal inventory and then claim the inventory was received and delivered to the warehouse.

A) A supplier delivers more inventory than ordered at the end of the year and sends an invoice for the total quantity delivered.

Which of the following would be the least effective control to prevent paying the same vendor invoice twice? A) Allow only the accounts payable department to authorize payment for vendor invoices and allow only the cash disbursements department to cut and mail checks to vendors. B) Only pay from original invoices. C) Cancel each document in the voucher package once the check is prepared and mailed. D) Only pay vendor invoices that have been matched and reconciled to a purchase order and a receiving report.

A) Allow only the accounts payable department to authorize payment for vendor invoices and allow only the cash disbursements department to cut and mail checks to vendors.

Which of the following statements is not true about an XBRL instance document? A) An instance document includes instruction code as to how the document should be physically arranged and displayed. B) An instance document contains facts about specific financial statement line items. C) An instance document uses separate tags for each specific element. D) An instance document can be used to tag financial and nonfinancial elements.

A) An instance document includes instruction code as to how the document should be physically arranged and displayed.

Which of the following is true about accounting for fixed assets? A) Depreciation expense under IFRS will likely be higher than under GAAP, because acquisitions of assets with multiple components must be separately depreciated under IFRS, whereas under GAAP assets could be bundled and depreciated over the longest of the useful life for any of the components. B) IFRS doesn't allow capitalization of any asset that separately accounts for less than 20% of total assets. C) Depreciation expense under IFRS will likely be less than under GAAP, because standards for depreciable lives on asset classes are much longer than under GAAP. D) IFRS and GAAP account for fixed assets in much the same way.

A) Depreciation expense under IFRS will likely be higher than under GAAP, because acquisitions of assets with multiple components must be separately depreciated under IFRS, whereas under GAAP assets could be bundled and depreciated over the longest of the useful life for any of the components.

**What is not a desired result of an employee bonus/incentive system? A) Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus. B) Employees may look for ways to improve service. C) Employees may analyze their work environment and find ways to cut costs. D) Employees may work harder and may be more motivated to exceed target goals to earn a bonus

A) Employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus.

**Which of the following is true about IFRS? A) Financial statements likely must be prepared using IFRS beginning in 2015. B) The switch to IFRS is required by the Sarbanes-Oxley Act. C) IFRS is only slightly different than US GAAP. D) The switch to IFRS is cosmetic onlythere isn't any real impact on AIS.

A) Financial statements likely must be prepared using IFRS beginning in 2015.

**IFRS is an acronym for what? A) International Financial Reporting Standards B) Internal Forensic Response System C) Input and Financial Reporting Standards D) Internal Fault Recovery System

A) International Financial Reporting Standards

Which of the following would probably be the least effective control to mitigate the risk of paying an invoice payable to a phony vendor for inventory purchases, mailed to the company by an employee attempting to commit fraud? A) Only pay from original invoices. B) Cancel all invoices and supporting documentation when paid. C) Strict access and authorization controls for the approved vendor master file. D) Require three-way match for all inventory purchase invoices.

A) Only pay from original invoices.

**Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations? A) Receiving and accepting inventory not ordered B) Theft of inventory by receiving department employees C) Update of wrong inventory items due to data entry error D) Order for an excessive quantity of inventory

A) Receiving and accepting inventory not ordered

Direct deposit of employee paychecks is one way an organization can improve efficiency and reduce payroll-processing costs. Which statement regarding direct deposit is false? A) The cashier does not authorize the transfer of funds from the organization's checking account to a payroll checking account. B) The cashier does not have to sign employee paychecks. C) Employees who are part of a direct deposit program receive a copy of their paycheck indicating the amount deposited. D) Employees who are part of a direct deposit program receive an earnings statement on payday rather than a paper check

A) The cashier does not authorize the transfer of funds from the organization's checking account to a payroll checking account.

**Adjusting entries that are made to counteract the effects of errors found in the general ledger are called A) accruals. B) corrections. C) deferrals. D) estimates.

B) corrections.

**The Squishy Things Toy Company was established in 1948. It recently signed a large contract with a chain of retail toy stores. As a condition of the contract, the Squishy will be required to track and forecast product sales by linking in to the chain's sales database. Squishy will then be responsible for shipping products to the chain's regional warehouses as needed. The relationship between Squishy and the chain is an example of A) vendor-managed inventory. B) sales force automation. C) electronic data interchange. D) optical character recognition.

A) vendor-managed inventory.

These are used to transmit time and attendance data directly to the payroll processing system. A) Badge readers B) Electronic time clocks C) Magnetic cards D) none of the above

B) Electronic time clocks

**Which of the following is not a benefit of using a payroll service bureau or a professional employer organization? A) Freeing up of computer resources B) Increased internal control C) Reduced costs D) Wider range of benefits

B) Increased internal control

How is general ledger updating accomplished by the various accounting subsystems? A) Individual journal entries for each accounting subsystem transaction update the general ledger every 24 hours. B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger. C) The controller or treasurer must approve accounting subsystem journal entries before any updating may occur. D) Nonroutine transactions are entered into the system by the treasurer's office.

B) Summary journal entries that represent the results of all transactions for a certain time period are used to update the general ledger.

**Which of the following is not one of the principles of proper graph design for bar charts? A) Include data values with each element. B) Use 3-D rather than 2-D bars to make reading easier. C) Use colors or shades instead of patterns to represent different variables. D) Use titles that summarize the basic message.

B) Use 3-D rather than 2-D bars to make reading easier.

When updating the general ledger, sales, purchases, and production are examples of ________ entries, and issuance or retirement of debt and the purchase or sale of investment securities are examples of ________ entries. A) adjusting; controller originated B) accounting subsystem; treasurer originated C) adjusting; special journal D) controller generated; special journal

B) accounting subsystem; treasurer originated

The results of an internal audit finds that there is a problem with inaccurate time data being entered into the payroll system. What is an applicable control that can help prevent this event from occurring in the future? A) proper segregation of duties B) automation of data collection C) sound hiring procedures D) review of appropriate performance metrics

B) automation of data collection

The average annual middle-management salary at Folding Squid Technologies is $60,000. If the average turnover rate for middle management is ten employees per year, what is the approximate average annual cost of turnover? A) $300,000 B) $600,000 C) $900,000 D) $1,200,000

C) $900,000

Which of the following will limit a firm's potential loss exposure from paycheck forgery? A) Segregation of check distribution from payroll duties B) Prompt redeposit of unclaimed paychecks C) A separate payroll bank account D) Direct deposit of checks

C) A separate payroll bank account

The benefits of XBRL include: A) organizations can publish financial information only once, using standard XBRL tags. B) tagged data is readable and interpretable by computers, so users don't need re-enter data into order to work with it. C) Both are benefits of XBRL. D) Neither are benefits of XBRL.

C) Both are benefits of XBRL.

**The key to preventing unauthorized changes to the payroll master file is A) hiring totally honest people to access and make changes to this file. B) segregation of duties between the preparation of paychecks and their distribution. C) segregation of duties between the authorization of changes and the physical handling of paychecks. D) having the controller closely review and then approve any changes to the master file

C) segregation of duties between the authorization of changes and the physical handling of paychecks.

**Corrections are entries made to correct errors found in ________. A) all journals B) special journals C) the general ledger D) the financial statements

C) the general ledger

A "zero balance check" refers to which of the following control procedures? A) a type of batch total B) cross-footing the payroll register C) the payroll clearing account shows a zero balance once all entries are posted D) trial balance showing that debits equal credits

C) the payroll clearing account shows a zero balance once all entries are posted

**Pay rate information is stored in A) employees' personnel files. B) employee subsidiary ledgers. C) the payroll master file. D) electronic time cards

C) the payroll master file.

Information about financing and investing activities for use in making general ledger entries is typically provided by the A) budget department. B) controller. C) treasurer. D) chief executive officer.

C) treasurer.

**One good way to eliminate paper paychecks is to A) pay in cash only. B) pay with money orders. C) use direct deposit. D) use Electronic Funds Transfer.

C) use direct deposit.

**Cheryl Liao is an accountant at Folding Squid Technologies. While making an adjusting entry to the general ledger, she received the following error message when she tried to save her entry, "The amounts debited and credited are not equal. Please correct and try again." This message was the result of a A) validity check. B) field check. C) zero-balance check. D) completeness test.

C) zero-balance check.

**The managerial report that shows planned cash inflows and outflows for major investments or acquisitions is the A) journal voucher list. B) statement of cash flows. C) operating budget. D) capital expenditures budget.

D) capital expenditures budget.

Which of the following are appropriate controls for the general ledger and reporting system? A) using well-designed documents and records B) online data entry with the use of appropriate edit checks C) prenumbering documents and accounting for the sequence numbers D) All of the above are appropriate.

D) All of the above are appropriate.

In the payroll system, checks are issued to A) employees and to banks participating in direct deposit. B) a company payroll bank account. C) government agencies. D) All of the above are correct.

D) All of the above are correct.

Which of the following tasks are facilitated by maintaining a strong and secure audit trail? A) tracing a transaction from original source document to the general ledger to a report B) tracing an item in a report back through the general ledger to the original source document C) tracing changes in general ledger accounts from beginning to ending balances D) All of the above are facilitated by the audit trail.

D) All of the above are facilitated by the audit trail.

Regarding the use of incentives, commissions and bonuses in payroll, which of the following statements is false? A) Using incentives, commissions, and bonuses requires linking the payroll system and the information systems of sales and other cycles in order to collect the data used to calculate bonuses. B) Bonus/incentive schemes must be properly designed with realistic, attainable goals that can be objectively measured. C) Incentive schemes can result in undesirable behavior. D) All of the above are true.

D) All of the above are true.

**Which of the following will contribute to the efficiency of a payroll system? A) Segregation of check distribution from payroll duties B) Prompt redeposit of unclaimed paychecks C) A separate payroll bank account D) Direct deposit of checks

D) Direct deposit of checks

**Which department should have the sole ability to provide information to the AIS about hiring, terminations, and pay rate changes? A) payroll B) timekeeping C) production D) HRM

D) HRM

Which of the following is a control that can be implemented to help prevent paychecks being issued to a "phantom" or "ghost" employee? A) The cashier should sign all payroll checks. B) Sequentially prenumber all payroll checks. C) Use an imprest account to clear payroll checks. D) Paychecks should be physically distributed by someone who does not authorize time data or record payroll.

D) Paychecks should be physically distributed by someone who does not authorize time data or record payroll.

**Which of the following documents would be likely to yield the greatest cost saving by converting from paper to electronic? A) Payroll register B) Earnings statement C) Deduction register D) Time card

D) Time card

To accomplish the objectives set forth in the expenditure cycle, a number of key management decisions must be addressed. Which of the decisions below is not ordinarily found as part of the expenditure cycle? A) How can cash payments to vendors be managed to maximize cash flow? B) What is the optimal level of inventory and supplies to carry on hand? C) Where should inventories and supplies be held? D) What are the optimal prices for each product or service?

D) What are the optimal prices for each product or service?

Concerning XBRL, which of the following statements is not true? A) XBRL is a variant of XML. B) XBRL is specifically designed for use in communicating the content of financial data. C) XBRL creates unique tags for each data item. D) XBRL's adoption will require accountants and systems professionals tag data for their clients.

D) XBRL's adoption will require accountants and systems professionals tag data for their clients.

Communications technology and the Internet can be used to reduce the time and costs involved in disseminating financial statement information. Users of such financial information still struggle in that many recipients have different information delivery requirements and may have to manually reenter the information into their own decision analysis tools. The ideal solution to solve these problems and efficiently transmit financial information via the Internet is to use A) HTML code. B) XML. C) pdf file. D) XBRL.

D) XBRL.

The general ledger and reporting system is designed to provide information for which of the following user groups? A) internal users B) external users C) inquiry processing by internal or external users D) all of the above

D) all of the above

When using electronic documents, ________ increase the accuracy of data entry. A) access controls B) separation of duties C) general controls D) application controls

D) application controls

**Cheryl Liao is an accountant at Folding Squid Technologies. While making an adjusting entry to the general ledger, she received the following error message when she tried to save her entry, "The data you have entered does not include a source reference code. Please enter this data before saving." This message was the result of a A) validity check. B) field check. C) zero-balance check. D) completeness test.

D) completeness test.

One way of ensuring that recurring adjusting journal entries are made each month would be to A) make all the entries a month in advance. B) rotate the responsibility among the accounting staff. C) program the entries to be made automatically. D) create a standard adjusting journal entry file.

D) create a standard adjusting journal entry file.

Which of the following is not a potential effect of inaccurate data on employee time cards? A) increased labor expenses B) erroneous labor expense reports C) damaged employee morale D) inaccurate calculation of overhead costs

D) inaccurate calculation of overhead costs

Entries to update the general ledger are often documented by which of the following? A) general journal B) subsidiary journal C) subsidiary ledgers D) journal vouchers

D) journal vouchers

**Adjusting entries that reflect a change in accounting principle used to value inventories are classified as A) corrections. B) estimates. C) deferrals. D) revaluations.

D) revaluations.

**Who provides the adjusting entries for a well-designed general ledger and reporting system? A) various user departments B) the treasurer's area C) the other major AIS subsystems D) the controller's area

D) the controller's area

Financial statements are prepared in a certain sequence. Which statement is prepared last in the sequence? A) the adjusted trial balance B) the income statement C) the balance sheet D) the statement of cash flows

D) the statement of cash flows

What is a potential threat to the specific activity of payroll processing? A) hiring unqualified employees B) poor system performance C) violations of employment laws D) unauthorized changes to the payroll master file

D) unauthorized changes to the payroll master file