Quiz - Chapter 3 - Introduction to Accounting

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1. ____________ is concerned with recording the finan- b. Financial ac-

cial impacts of business processes as they counting (Fl)
are executed.
a. Management accounting
b. Financial accounting (Fl)
c. Controlling (CO)
d. Bank ledger accounting
e. None of the above

2. Which of the following is a key process in financial b. Accounts receiv-

accounting? able accounting
a. Sales order processing
b. Accounts receivable accounting
c. Credit management
d. Income verification
e. All of the above

3. Which process is used to manage money owed by b. Accounts receiv-

customers for goods and services purchased from the able accounting
company?
a. General ledger accounting
b. Accounts receivable accounting
c. Fixed asset accounting
d. Bank ledger accounting
e. All of the above

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

5. ____________ are internal divisions of an enterprise c. Business areas

that are used to define areas of
responsibility or to meet the external reporting re-
quirements of an enterprise segment.
a. Cost centers
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 Quiz - Chapter 3 - Introduction to Accounting
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b. Depreciation areas
c. Business areas
d. Sub-ledgers
e. None of the above

6. Which term refers to an ordered listing of accounts d. Chart of ac-

that comprise a company's general ledger? counts (COA)
a. General ledger
b. Balance sheet
c. Bank ledger
d. Chart of accounts (COA)
e. None of the above

7. Which term represents what a company owns, such c. Assets

as cash, inventory of materials, and
buildings?
a. Liabilities
b. Equity
c. Assets
d. Revenues
e. None of the above

8. Which term represents what a company owes to oth- a. Liabilities

ers, including money owed to vendors and
loans from financial institutions?
a. Liabilities
b. Equity
c. Assets
d. Revenues
e. None of the above
Answer: a
Difficulty: Medium
Section Reference: General Ledger Accounting

9. Which term represents the monies a company earns d. Revenue

by selling its products and services?
a. Liabilities
b. Assets
c. Expenses

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 Quiz - Chapter 3 - Introduction to Accounting
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d. Revenue
e. Equity

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

11. Which element is not a part of the typical company a. Tax-related data
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

12. Which term is a general ledger account that consoli- c. Reconciliation

dates data from a group of related sub-ledger account
accounts?
a. Subsidiary ledger
b. Sub-ledger
c. Reconciliation account
d. Line item display
e. None of the above

13. Which of the following records the impact of a trans- a. Financial ac-
action step on financial accounting? counting docu-
a. Financial accounting document ment
b. Parallel accounting document
c. Sub-ledger
d. Subsidiary ledger
e. None of the above

14. Which of the following is used to implement multiple d. Parallel Ac-

ledgers and use each ledger for different counting
purposes?
a. Financial accounting document
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b. Subsidiary ledger
c. Sub-ledger
d. Parallel Accounting
e. None of the above

15. Which type of asset has a physical form? b. Tangible asset

a. Master asset
b. Tangible asset
c. Informal asset
d. Intangible asset
e. None of the above

16. Which type of asset has a non-physical form? d. Intangible asset

a. Master asset
b. Tangible asset
c. Informal asset
d. Intangible asset
e. None of the above

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

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

19.
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 Quiz - Chapter 3 - Introduction to Accounting
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Which of the following is not a mode of acquiring an d. Selling equip-
asset for a company? ment
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

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

21. Financial statements can be generated from which of c. Both operative

the following? and country-spe-
a. Operative COA cific COAs
b. Country-specific COA
c. Both operative and country-specific COAs
d. Neither operative nor country-specific COAs

22. *MA- *Balance sheet accounts are grouped into which b. Assets
of the following categories? c. Liabilities
a. Revenue d. Equity
b. Assets
c. Liabilities
d. Equity
e. Expenses
Answer: b, c, d
Difficulty: Medium
Section Reference: General Ledger Accounting

23. *MA- *An organization can possess which of the fol- a. Tangible
lowing types of assets? b. Intangible
a. Tangible c. Financial
b. Intangible
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c. Financial
d. Economic
e. Virtual

24. *MA- *Tangible assets can include which of the follow- a. Computers
ing? c. Production Ma-
a. Computers chinery
b. Bonds d. Real Estate
c. Production Machinery
d. Real Estate
e. Mortgage

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

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

27. *MA- *Which of the following are common deprecia- a. Book deprecia-
tion areas used in the US? tion
a. Book depreciation b. Cost accounting
b. Cost accounting depreciation depreciation
c. Legal depreciation c. Legal deprecia-
d. Special depreciation tion
e. Physical depreciation d. Special depreci-
ation

28. *MA- *Reporting in financial accounting is broadly b. Displaying ac-

divided into which of the following two categories? count information
a. Posting goods issue c. Generating fi-
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b. Displaying account information nancial state-
c. Generating financial statements ments
d. Recording transactions
e. Automatic posting of accounts

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

30. *MA- *What is true about a business area? a) It is a internal di-

a) It is a internal division of an enterprise vision of an enter-
b) It helps management monitor performance prise
c) It is used for external reporting b) It helps man-
d) It is associated with one company code agement monitor
performance
c) It is used for ex-
ternal reporting

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

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

33. *MA- *The COA segment of the COA data includes b) Account num-
which of the following? ber
a) Account currency c) Account group
b) Account number

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c) Account group
d) Short text

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

35. *MA- *Which of the following statements concerning b) Reconciliation

reconciliation accounts are true? account for cus-
a) Reconciliation account for customers is accounts tomers is accounts
payable receivable
b) Reconciliation account for customers is accounts c) Reconciliation
receivable account for ven-
c) Reconciliation account for vendors is accounts dors is accounts
payable payable
d) Reconciliation account for vendors is accounts re-
ceivable

36. *MA- *Which of the following statements regarding a) Data are posted
reconciliation accounts are not true? directly into them
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

37. *MA- *Which attributes are present in the FI document a) Amount

items? e) Posting key
a) Amount
b) Document type
c) Posting date
d) Currency
e) Posting key

38. *MA- *Which attributes are present in the FI document

header?
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a) Amount b) Document type
b) Document type c) Posting date
c) Posting date d) Currency
d) Currency
e) Posting key

39. *MA- *Which of the following statements concerning b) Global account-

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

40. *MA- *A cost center: a) Absorbs costs

a) Absorbs costs b) Can be associ-
b) Can be associated with a department ated with a depart-
c) Is similar to a cost object ment
d) Is associated with locations where costs are in- c) Is similar to a
curred cost object
d) Is associat-
ed with locations
where costs are in-
curred

41. *MA- *When does a debit take place? b) When assets

a) When assets and expenses decrease and expenses in-
b) When assets and expenses increase crease
c) When revenue and liabilities decrease c) When revenue
d) When revenue and liabilities increase and liabilities de-
crease

42. *MA- *Balance sheet accounts are grouped into: a) Assets

a) Assets b) Liabilities
b) Liabilities c) Equity
c) Equity
d) Revenue

43. *MA- *When does a credit take place? a) When assets

a) When assets and expenses decrease and expenses de-
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 Quiz - Chapter 3 - Introduction to Accounting
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b) When assets and expenses increase crease
c) When revenue and liabilities decrease d) When revenue
d) When revenue and liabilities increase and liabilities in-
crease

44. *MA- *In accounts payable, which general ledger ac- a) Accounts
counts are affected? payable reconcilia-
a) Accounts payable reconciliation tion
b) Vendor c) Supplies ex-
c) Supplies Expense pense
d) Bank d) Bank

45. *MA- *In accounts receivable, which general ledger a) Accounts re-
accounts are affected? ceivable reconcili-
a) Accounts receivable reconciliation ation
b) Sales revenue b) Sales revenue
c) Bank c) Bank
d) Supplies Expense

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