es ch. 3

29. From which of the following can financial statements be generated? a. Operative chart of accounts b. Country-specific chart of accounts c. Revenue accounts d. Assets e. Liability accounts

A, B

23. An organization can possess which of the following types of assets? a. Tangible b. Intangible c. Financial d. Economic e. Virtual

A, B, C

27. Which of the following are common depreciation areas used in the US? a. Book depreciation b. Cost accounting depreciation c. Legal depreciation d. Special depreciation e. Physical depreciation

A, B, C, D

24. Tangible assets can include which of the following? a. Computers b. Bonds c. Production Machinery d. Real Estate e. Mortgage

A, C, D

1. ____________ is concerned with recording the financial impacts of business processes as they are executed. a. Management accounting b. Financial accounting (Fl) c. Controlling (CO) d. Bank ledger accounting e. None of the above

B

3. Which process is used to manage money owed by customers for goods and services purchased from the company? a. General ledger accounting b. Accounts receivable accounting c. Fixed asset accounting d. Bank ledger accounting e. All of the above

B

28. Reporting in financial accounting is broadly divided into which of the following two categories? a. Posting goods issue b. Displaying account information c. Generating financial statements d. Recording transactions e. Automatic posting of accounts

B, C

22. Balance sheet accounts are grouped into which of the following categories? a. Revenue b. Assets c. Liabilities d. Equity e. Expenses

B, C, D

12. Which term is a general ledger account that consolidates data from a group of related sub-ledger accounts? a. Subsidiary ledger b. Sub-ledger c. Reconciliation account d. Line item display e. None of the above

C

20. All of the following are transaction types that occur during the life of an asset except ___________ . a. Acquisition b. Depreciation c. Allocation d. Retirement

C

21. Financial statements can be generated from which of the following? a. Operative COA b. Country-specific COA c. Both operative and country-specific COAs d. Neither operative nor country-specific COAs

C

5. ____________ are internal divisions of an enterprise that are used to define areas of responsibility or to meet the external reporting requirements of an enterprise segment. a. Cost centers b. Depreciation areas c. Business areas d. Sub-ledgers e. None of the above

C

7. Which term represents what a company owns, such as cash, inventory of materials, and buildings? a. Liabilities b. Equity c. Assets d. Revenues e. None of the above

C

25. What are the most common transaction types that occur during the life of an asset? a. Production b. Allocation c. Acquisition d. Depreciation e. Retirement

C, D, E

17. Which of the following is used to report data needed to meet legal and regulatory requirements? a. Assets b. Equity c. Tangible document d. Financial statement e. None of the above

D

46. Accounting processes are broadly divided into two main categories: financial accounting and management accounting.

True

30. What is true about a business area? a) It is a internal division of an enterprise b) It helps management monitor performance c) It is used for external reporting d) It is associated with one company code

a, b, c

42. Balance sheet accounts are grouped into: a) Assets b) Liabilities c) Equity d) Revenue

a, b, c

45. In accounts receivable, which general ledger accounts are affected? a) Accounts receivable reconciliation b) Sales revenue c) Bank d) Supplies expense

a, b, c

40. A cost center: a) Absorbs costs b) Can be associated with a department c) Is similar to a cost object d) Is associated with locations where costs are incurred

a, b, c, d

31. Which of the following are types of chart of accounts? a) Operative COA b) Country specific COA c) Active COA d) Group COA

a, b, d

44. In accounts payable, which general ledger accounts are affected? a) Accounts payable reconciliation b) Vendor c) Supplies expense d) Bank

a, c, d

32. What does the COA data include? a) Client segment b) Storage location segment c) Plant segment d) Company code segment

a, d

43. When does a credit take place? a) When assets and expenses decrease b) When assets and expenses increase c) When revenue and liabilities decrease d) When revenue and liabilities increase

a, d

37. Which attributes are present in the FI document items? a) Amount b) Document type c) Posting date d) Currency e) Posting key

a, e

2. Which of the following is a key process in financial accounting? a. Sales order processing b. Accounts receivable accounting c. Credit management d. Income verification e. All of the above

b

33. The COA segment of the COA data includes which of the following? a) Account currency b) Account number c) Account group d) Short text

b, c

35. Which of the following statements concerning reconciliation accounts are true? a) Reconciliation account for customers is accounts payable b) Reconciliation account for customers is accounts receivable c) Reconciliation account for vendors is accounts payable d) Reconciliation account for vendors is accounts receivable

b, c

41. When does a debit take place? a) When assets and expenses decrease b) When assets and expenses increase c) When revenue and liabilities decrease d) When revenue and liabilities increase

b, c

38. Which attributes are present in the FI document header? a) Amount b) Document type c) Posting date d) Currency e) Posting key

b, c, d

39. Which of the following statements concerning the leading ledger are true? a) It is a type of sub-ledger b) Global accounting principles are consolidated into it c) Having a leading ledger is optional d) All transaction data are posted to it

b, d

34. Which of the following does the balance sheet include? a) Revenue b) Expenses c) Assets d) Liabilities

c, d

66. Accounts receivable accounting is concerned with customers.

true

70. Financial accounting is affected any time money either leaves or comes into the company.

true

18. Which of the following best describes the operative chart of accounts? a. Contains the operational accounts that are used to record the financial impact of an organization's day-to-day transactions b. Used to enable companies to meet special country-specific reporting requirements c. Contains accounts that are used by multiple companies to consolidate their financial reporting d. Contains only accounts payable transactions e. Contains only accounts receivable transaction

A

4. Which process is concerned with recording data associated with bank statements? a. Bank ledger accounting b. Fixed asset accounting c. General ledger accounting d. Accounts receivable accounting e. None of the above

A

13. Which of the following records the impact of a transaction step on financial accounting? a. Financial accounting document b. Parallel accounting document c. Sub-ledger d. Subsidiary ledger e. None of the above

A

16. Which type of asset has a non-physical form? a. Master asset b. Tangible asset c. Informal asset d. Intangible asset e. None of the above

D

8. Which term represents what a company owes to others, including money owed to vendors and loans from financial institutions? a. Liabilities b. Equity c. Assets d. Revenues e. None of the above

A

26. What are the primary ways in which an asset can be acquired? a. Internally by production b. Internally by inventory tracking c. Externally by vendor d. Externally without a vendor e. By asset liquidation

A, C, D

10. Which term represents the costs associated with creating and selling products and services? a. Assets b. Expenses c. Liabilities d. Equity e. None of the above

B

15. Which type of asset has a physical form? a. Master asset b. Tangible asset c. Informal asset d. Intangible asset e. None of the above

B

14. Which of the following is used to implement multiple ledgers and use each ledger for different purposes? a. Financial accounting document b. Subsidiary ledger c. Sub-ledger d. Parallel Accounting e. None of the above

D

19. Which of the following is not a mode of acquiring an asset for a company? a. Acquiring internally via the production process b. Acquire from a vendor using the purchasing process c. Acquire from a vendor without using the purchasing process d. Selling equipment e. Acquiring without a vendor

D

6. Which term refers to an ordered listing of accounts that comprise a company's general ledger? a. General ledger b. Balance sheet c. Bank ledger d. Chart of accounts (COA) e. None of the above

D

9. Which term represents the monies a company earns by selling its products and services? a. Liabilities b. Assets c. Expenses d. Revenue e. Equity

D

11. Which element is not a part of the typical company code data in general ledger accounts? a. Tax-related data b. Field status groups c. Line item display d. Reconciliation account data e. None of the above

E

47. Financial accounting (Fl) is concerned with recording the financial impacts of business processes as they are executed.

True

Which of the following statements regarding reconciliation accounts are not true? a) Data are posted directly into them b) Data are automatically posted into them after they are posted to the corresponding sub-ledger c) The reconciliation account includes the sum of the postings of the sub-ledgers. d) None of the above

a

48. Management accounting, or controlling (CO), is intended primarily for audiences outside the organization.

false

49. Accounts payable accounting is not associated with the procurement process.

false

53. Business areas are external departments of an enterprise that are used to define areas of responsibility or to meet the internal requirements of a division.

false

54. A list of accounts that can be included in a general ledger is called master data.

false

56. Liabilities are what the company owns, such as cash, land, and buildings.

false

57. Assets are monies the company earns by selling its products and services

false

58. Expenses are what the company owes to others, including money owed to vendors and loans from financial institutions.

false

60. A reconciliation account records the impact of a transaction step on financial accounting

false

61. A financial accounting document is a general ledger account that consolidates data from a group of sub-ledger accounts, such as customers and vendors.

false

63. An increase in an asset account or an expense account results in a credit posting.

false

64. An increase in revenue or liability results in a debit posting.

false

68. Intangible assets are physical items such as buildings, machinery, and computers.

false

69. Tangible assets are non-physical items such as trademarks and patents.

false

50. The general ledger is used to record the financial impacts of business process steps.

true

51. The balance sheet is a snapshot of the organization at a point in time.

true

52. A segment is a division of an enterprise for which management monitors performance separately from other segments.

true

55. A chart of accounts (COA) is an ordered listing of accounts that comprise a company's general ledger.

true

59. Account currency determines the currency in which all the transactions are recorded.

true

62. Parallel accounting consists of implementing multiple ledgers and using each ledger for different purposes.

true

65. Accounts payable accounting is concerned with vendors

true

67. Within accounts receivable accounting, when a payment is made the bank account is debited and the appropriate customer account is credited.

true

71. Reporting within financial accounting is divided into two categories: generating financial statements and displaying account information.

true

72. Financial statements can be generated for different organizational levels including one or more company codes and business areas.

true