ACCOUNTING INFORMATION SYSTEMS 2026
FINANCIAL DATA PROCESSING AND
REPORTING ASSESSMENT STUDY GUIDE
COMPLETE QUESTIONS AND ANSWERS
◉ When a cash disbursement in payment of an accounts payable is
recorded Answer: When a cash disbursement in payment of an
accounts payable is recorded the liability account is decreased. On
the Balance Sheet, accounts payable is a current liability. When a
cash disbursement is recorded, the liability will be reduced.
◉ The greatest risk of misappropriation of funds occurs in Answer:
The greatest risk of misappropriation of funds occurs in accounts
payable. This may take the form of payments for goods not ordered
or received and to vendors that do not exist. The risk can be reduced
through supervision, segregation of duties, independent verification,
or automated processes.
◉ In a firm with proper segregation of duties, adequate supervision
as a compensating control is still necessary in Answer: In a firm with
proper segregation of duties, adequate supervision is most critical in
receiving. Every day materials arrive on the receiving dock. Until
those receipts are recorded in the system, they are invisible to
anyone but the receivers and their supervisors. Supervision is a
compensating control appropriate before more automated controls
,take effect. Scanning technology and automated three-way match
are technological controls that reduce risk.
◉ The fixed asset system records the Answer: The fixed asset system
records the purchase of a new plant. The fixed asset system records
property, plant, and equipment used in the operation of the
business. These represent the largest investments of the firm.
◉ In a technology enabled payroll system, Personnel, Time Keeping,
Payroll, and Accounts Payable connect to which department to pay
employees? Answer: In a technology-enabled payroll system,
Personnel, Time Keeping, Payroll and Accounts Payable connect to
cash disbursements to pay employees. Personnel inputs the basic
employee information and rate of pay; Time Keeping collects hours
worked and verifies time cards; Payroll inputs the hours worked into
the payroll system which calculates gross and net pay, taxes, and
other deductions; Accounts Payable approves the payment amount;
and finally cash disbursements issues pay checks or direct deposit.
The general ledger will be updated after the cash disbursement
occurs.
◉ An important reconciliation in the payroll system is Answer: An
important reconciliation in the payroll system is that the general
ledger compares the labor distribution summary from cost
accounting to the disbursement voucher from accounts payable.
Cost accounting will be tracking the job tickets to properly account
for work in process. Accounts payable will produce a disbursement
,voucher based on input from timecards. Job tickets and timecards
should match when hours and hourly rates are extended.
◉ Which of the following situations represents an internal control
weakness? Answer: The distribution of paychecks by the employees'
immediate supervisor is an internal control weakness. Paychecks
should go directly to employees either by mail or through direct
deposit. Giving the responsibility for distribution to the supervisor
creates the possibility of loss, theft, or withholding of pay from an
employee that the supervisor simply does not like. An additional risk
arises if the employee is absent on payday and the supervisor has no
secure storage for the check until the employee is back.
◉ Which of the following is NOT a reasonable control for fixed
assets? Answer: Requiring that fully depreciated assets be disposed
of immediately is not a reasonable control for fixed assets. Fully
depreciated assets may have years of useful life remaining. For
example, manufacturing machinery may be depreciated over three
years but many factories use machines that are 10, 15, or 20 years
old if they are well maintained.
◉ What type of data is found in the general ledger master file?
Answer: Balances for each account in the chart of accounts are found
in the general ledger master file. The text describes the general
ledger file as the information hub for the accounting system. Each
record in the general ledger master file corresponds with one of the
accounts in the chart of accounts. Each record is either a GL Master
, account (i.e., Sales) or a control account (i.e. Accounts Receivables
control)
◉ Which report is an output of the financial reporting system (FRS)?
Answer: A comparative balance sheet is an output of the financial
reporting system. The law requires that corporations generate a
series of financial reports - Income Statement, Balance Sheet,
Statement of Cash Flows, Tax Returns, and others. This requirement
is met by the financial reporting system.
◉ A characteristic of the management reporting system (MRS) is
Answer: The management reporting system (MRS) focuses on
internal decision-making information. The MRS is the source for
reports that managers will use to analyze business performance
such as variance analysis, production efficiency, sales, and
purchases.
◉ Big data analytics are characterized by Answer: Big data analytics
are characterized by volume, velocity, and variety of data. These are
referred to as the three Vs: extreme volumes of data (megabytes,
terabytes, petabytes, etc.), the rapid velocity at which the data must
be processed (particularly in applications involving machine
learning and artificial intelligence), and the wide variety of
structured and unstructured data types that need to be integrated
(audio, video, external web data, social media, the financial
reporting system, the management reporting system).
FINANCIAL DATA PROCESSING AND
REPORTING ASSESSMENT STUDY GUIDE
COMPLETE QUESTIONS AND ANSWERS
◉ When a cash disbursement in payment of an accounts payable is
recorded Answer: When a cash disbursement in payment of an
accounts payable is recorded the liability account is decreased. On
the Balance Sheet, accounts payable is a current liability. When a
cash disbursement is recorded, the liability will be reduced.
◉ The greatest risk of misappropriation of funds occurs in Answer:
The greatest risk of misappropriation of funds occurs in accounts
payable. This may take the form of payments for goods not ordered
or received and to vendors that do not exist. The risk can be reduced
through supervision, segregation of duties, independent verification,
or automated processes.
◉ In a firm with proper segregation of duties, adequate supervision
as a compensating control is still necessary in Answer: In a firm with
proper segregation of duties, adequate supervision is most critical in
receiving. Every day materials arrive on the receiving dock. Until
those receipts are recorded in the system, they are invisible to
anyone but the receivers and their supervisors. Supervision is a
compensating control appropriate before more automated controls
,take effect. Scanning technology and automated three-way match
are technological controls that reduce risk.
◉ The fixed asset system records the Answer: The fixed asset system
records the purchase of a new plant. The fixed asset system records
property, plant, and equipment used in the operation of the
business. These represent the largest investments of the firm.
◉ In a technology enabled payroll system, Personnel, Time Keeping,
Payroll, and Accounts Payable connect to which department to pay
employees? Answer: In a technology-enabled payroll system,
Personnel, Time Keeping, Payroll and Accounts Payable connect to
cash disbursements to pay employees. Personnel inputs the basic
employee information and rate of pay; Time Keeping collects hours
worked and verifies time cards; Payroll inputs the hours worked into
the payroll system which calculates gross and net pay, taxes, and
other deductions; Accounts Payable approves the payment amount;
and finally cash disbursements issues pay checks or direct deposit.
The general ledger will be updated after the cash disbursement
occurs.
◉ An important reconciliation in the payroll system is Answer: An
important reconciliation in the payroll system is that the general
ledger compares the labor distribution summary from cost
accounting to the disbursement voucher from accounts payable.
Cost accounting will be tracking the job tickets to properly account
for work in process. Accounts payable will produce a disbursement
,voucher based on input from timecards. Job tickets and timecards
should match when hours and hourly rates are extended.
◉ Which of the following situations represents an internal control
weakness? Answer: The distribution of paychecks by the employees'
immediate supervisor is an internal control weakness. Paychecks
should go directly to employees either by mail or through direct
deposit. Giving the responsibility for distribution to the supervisor
creates the possibility of loss, theft, or withholding of pay from an
employee that the supervisor simply does not like. An additional risk
arises if the employee is absent on payday and the supervisor has no
secure storage for the check until the employee is back.
◉ Which of the following is NOT a reasonable control for fixed
assets? Answer: Requiring that fully depreciated assets be disposed
of immediately is not a reasonable control for fixed assets. Fully
depreciated assets may have years of useful life remaining. For
example, manufacturing machinery may be depreciated over three
years but many factories use machines that are 10, 15, or 20 years
old if they are well maintained.
◉ What type of data is found in the general ledger master file?
Answer: Balances for each account in the chart of accounts are found
in the general ledger master file. The text describes the general
ledger file as the information hub for the accounting system. Each
record in the general ledger master file corresponds with one of the
accounts in the chart of accounts. Each record is either a GL Master
, account (i.e., Sales) or a control account (i.e. Accounts Receivables
control)
◉ Which report is an output of the financial reporting system (FRS)?
Answer: A comparative balance sheet is an output of the financial
reporting system. The law requires that corporations generate a
series of financial reports - Income Statement, Balance Sheet,
Statement of Cash Flows, Tax Returns, and others. This requirement
is met by the financial reporting system.
◉ A characteristic of the management reporting system (MRS) is
Answer: The management reporting system (MRS) focuses on
internal decision-making information. The MRS is the source for
reports that managers will use to analyze business performance
such as variance analysis, production efficiency, sales, and
purchases.
◉ Big data analytics are characterized by Answer: Big data analytics
are characterized by volume, velocity, and variety of data. These are
referred to as the three Vs: extreme volumes of data (megabytes,
terabytes, petabytes, etc.), the rapid velocity at which the data must
be processed (particularly in applications involving machine
learning and artificial intelligence), and the wide variety of
structured and unstructured data types that need to be integrated
(audio, video, external web data, social media, the financial
reporting system, the management reporting system).
