Question 1

It is often necessary to create one-off reports from data held in the general ledger.Which of the following technologies would be useful for an end user to analyse extracted data and format a report?
A)Crystal Reports
B)Microsoft Excel
C)Microsoft PowerPoint
D)SAP Business Intelligence Solutions

Accepted Answer

A

Question 2

During the general ledger and financial reporting cycle:
A)Budgets are created and agreed upon.
B)Transactional level data is accumulated,summarised,adjusted and reported to internal users.
C)Transactional level data is accumulated,summarised,adjusted and reported to external users.
D)All of the options are correct.

Accepted Answer

All of the options are correct.

Question 3

Which is the most likely cause of a large variance between budget estimates and actual results if the company is well managed with efficient internal controls?
A)Production is working inefficiently and using too much raw material
B)The budget is unrealistic and cannot be met
C)Inaccurate data has been recorded
D)Raw materials are being stolen

Accepted Answer

A

Question 4

Which of the following is not a problem that can be caused directly by errors in financial statements?
A)Inability to improve business process efficiencies
B)Inability to access capital markets
C)Inequitable increases in the cost of capital
D)Incorrect market pricing of company shares

Accepted Answer

Errors in financial statements can lead to a variety of problems, such as poor decision-making, legal implications, and loss of investor confidence. However, inability to improve business process efficiencies is not a direct problem caused by errors in financial statements, but rather a separate issue that may be influenced by financial performance.

Question 5

The general ledger and financial reporting cycle commences when:
A)data are received from other cycles
B)budgets are created
C)it is time to generate and distribute financial reports
D)budget variances are examined

Accepted Answer

The answer of The general ledger and financial reporting cycle...

Question 6

Which of the following statements regarding operational reports is true?
A)Any operational report that is based on accrual accounting assumptions can only be relied upon if it is generated using correctly adjusted data.
B)Operational reports can be generated at any time after a transaction is recorded
C)Operational reports usually extract and report data directly from summarised general ledgers.
D)Operational reports are constructed in accordance with the requirements of the relevant accounting standards and they are freely available to both external and internal users.

Accepted Answer

Operational reports can be generated at any time after a transaction is recorded, without the need for adjustments or adherence to accounting standards. They provide timely and accurate information for internal decision-making purposes. Option A is incorrect because operational reports do not necessarily have to be based on accrual accounting assumptions. Option C is incorrect because operational reports can extract data from any part of the accounting system, not just the summarised general ledgers. Option D is incorrect because operational reports are not required to follow accounting standards and are generally only available to internal users.

Question 7

Vendor invoices from the expenditure cycle flow into the general ledger and financial reporting cycle through:
A)the purchases journal directly
B)the purchases journal and then through the accounts payable subsidiary ledger
C)the cash disbursements journal directly
D)the accounts payable subsidiary ledger and then through the cash disbursements journal

Accepted Answer

Vendor invoices from the expenditure cycle are first recorded in the purchases journal, which is then posted to the accounts payable subsidiary ledger. From there, the information is transferred to the general ledger and financial reporting cycle. Therefore, option B - the purchases journal and then through the accounts payable subsidiary ledger - is the best choice.

Question 8

Financial reports generated in the general ledger and financial reporting cycle is used by:
A)Managers within the organisation
B)Investors
C)External regulators
D)All of the options are correct.

Accepted Answer

Financial reports generated in the general ledger and financial reporting cycle are used by managers within the organisation for decision-making, investors for making investment decisions, and external regulators for monitoring compliance. Therefore, all of the options are correct.

Question 9

The main objective of the general ledger and financial reporting cycle is to:
A)Create a trial balance of various accounts as well as adjusted trial balances.
B)Perform bank reconciliation to verify independently the balances of the cash-based general ledger accounts.
C)Synthesise and report data that accurately represents business transactions and activities
D)All of the options are correct.

Accepted Answer

The main objective of the general ledger and financial reporting cycle is to synthesise and report data that accurately represents business transactions and activities. While options A and B are important steps within this process, they are not the main objective. Option D is incorrect as not all options are correct.

Question 10

The general ledger and financial reporting cycle ends when:
A)no more data are received from other cycles
B)budgets are created
C)financial reports have been generated and distributed
D)budget variances are examined

Accepted Answer

The general ledger and financial reporting cycle ends when financial reports have been generated and distributed, representing the final output of the cycle. While budgets and budget variances may be part of this process, they do not signify the end of the cycle. The end of the cycle is indicated by the completion of financial reports.

Question 11

High-quality decision-making requires:
A)valid,timely,accurate,and complete data and comprehensible reports
B)valid,timely,accurate,and complete data and comprehensive reports
C)good data and comprehensive reports
D)comprehensive data and comprehensible reports

Accepted Answer

High-quality decision-making requires valid, timely, accurate, and complete data, as well as comprehensible reports.

Question 12

Which of the following statements regarding reports is true?
A)Reports should contain as many data as possible so that readers are able to understand the reports thoroughly.
B)Poorly arranged data in reports can be misleading.
C)Simple issues such as selecting the appropriate font size or column heading are unlikely to impact on the understandability of a report.
D)All of the options are correct.

Accepted Answer

Poorly arranged data in reports can be misleading. Reports should be well-organized and presented in a clear and concise manner to ensure that the data is easily understandable for the intended audience. Including too much data or using inappropriate formatting can lead to confusion and misinterpretation of the information. Option A is incorrect as reports should only contain relevant data, not unnecessary information. Option C is also incorrect as selecting appropriate font size and headings are important considerations in report design to ensure readability and clarity. Option D is incorrect as only option B is correct.

Question 13

An unfavourable variance between budgeted and actual data may indicate:
A)Poor performance.
B)Budget estimates were set at an unrealistic or unachievable level.
C)The estimation of future activity levels and the associated potential costs and revenues is incorrect and inaccurate.
D)All of the options are correct.

Accepted Answer

An unfavourable variance between budgeted and actual data can indicate poor performance, unrealistic or unachievable budget estimates, and incorrect estimation of future activity levels and associated costs and revenues. Therefore, all of the options are correct.

Question 14

Which of the following technologies can be used in the general ledger and financial reporting cycle?
A)ERP and XBRL
B)ERP and CAD
C)RFID and XBRL
D)CAD and RFID

Accepted Answer

ERP (Enterprise Resource Planning) and XBRL (eXtensible Business Reporting Language) are commonly used technologies in the general ledger and financial reporting cycle. ERP systems are used to manage financial data and automate financial processes, while XBRL is a standardized language used to tag financial data for easier and more accurate reporting. CAD (Computer-Aided Design) and RFID (Radio Frequency Identification) are not typically used in this cycle.

Question 15

Which of the following documents (or information on these documents)does not flow into the general ledger and financial reporting cycle through the cash disbursements journal?
A)Production costs
B)Payroll
C)Cheques
D)Purchase invoice

Accepted Answer

The answer of Which of the following documents (or information...

Question 16

Which of the following statements regarding reports is true?
A)Financial reports are more detailed than management reports.
B)Financial reports have an internal focus.
C)Management reports can be distributed externally.
D)Basic reports contain even more detailed information than financial reports and management reports.

Accepted Answer

The answer of Which of the following statements regarding reports...

Question 17

The general ledger and financial reporting cycle ________.
A)Summarises,adjusts,and reports on data from all previous operational cycles.
B)Summarises,adjusts,and reports on data from all current operational cycles.
C)Creates,adjusts,and summarises on data from all previous operational cycles.
D)Creates,adjusts,and summarises on data from all current operational cycles.

Accepted Answer

The general ledger and financial reporting cycle is responsible for summarizing, adjusting, and reporting on data from all previous operational cycles. It is the final stage in the accounting cycle and is used to produce financial statements that can be used for decision-making purposes by both internal and external stakeholders. Therefore, choice A is the correct answer.

Question 18

The purpose of budgeting is to:
A)Get a forecast of resource usage of the next financial year only.
B)Facilitate organisational planning and control.
C)Request more funding.
D)All of the options are correct.

Accepted Answer

The purpose of budgeting is to facilitate organisational planning and control. Budgets provide a framework for setting priorities and allocating resources effectively. They also help in monitoring performance and taking corrective actions if necessary. The other options (A, C and D) are not accurate as budgeting involves forecasting resource usage for a specified period, controlling spending and not necessarily requesting for more funding.

Question 19

In terms of the general ledger and financial reporting cycle,which of the following sequences is in the correct order?
A)create trial balance,perform bank reconciliation,prepare adjusting journal entries,conduct financial reporting
B)prepare adjusting journal entries,create trial balance,perform bank reconciliation,conduct financial reporting
C)perform bank reconciliation,create trial balance,prepare adjusting journal entries,conduct financial reporting
D)create trial balance,prepare adjusting journal entries,perform bank reconciliation,conduct financial reporting

Accepted Answer

The answer of In terms of the general ledger and...

Question 20

In the general ledger and financial reporting cycle:
A)Adjusting journal entries does not have to be authorised independently.
B)Reports must not contain irrelevant data.
C)Data should not be transferred amongst accounts.
D)Data need not be validated.

Accepted Answer

Financial reports should only contain relevant data that is necessary for understanding the financial health of the organization. Including irrelevant data could lead to confusion or misinterpretation of the financial information.

The other options are incorrect:
A) Adjusting entries typically require authorisation to ensure accuracy and completeness of the financial statements.
C) Transferring data between accounts is a necessary part of the general ledger process.
D) Data validation helps to ensure the completeness and accuracy of the financial information.

Quiz 13: Transaction Cycle The General Ledger and Financial Reporting Cycle

It is often necessary to create one-off reports from data held in the general ledger.Which of the following technologies would be useful for an end user to analyse extracted data and format a report?

During the general ledger and financial reporting cycle:

Which is the most likely cause of a large variance between budget estimates and actual results if the company is well managed with efficient internal controls?

Which of the following is not a problem that can be caused directly by errors in financial statements?

The general ledger and financial reporting cycle commences when:

Which of the following statements regarding operational reports is true?

Vendor invoices from the expenditure cycle flow into the general ledger and financial reporting cycle through:

Financial reports generated in the general ledger and financial reporting cycle is used by:

The main objective of the general ledger and financial reporting cycle is to:

The general ledger and financial reporting cycle ends when:

High-quality decision-making requires:

Which of the following statements regarding reports is true?

An unfavourable variance between budgeted and actual data may indicate:

Which of the following technologies can be used in the general ledger and financial reporting cycle?

Which of the following documents (or information on these documents) does not flow into the general ledger and financial reporting cycle through the cash disbursements journal?

Which of the following statements regarding reports is true?

The general ledger and financial reporting cycle ________.

The purpose of budgeting is to:

In terms of the general ledger and financial reporting cycle,which of the following sequences is in the correct order?

In the general ledger and financial reporting cycle: