Podcast
Questions and Answers
What is contained in the general ledger master file?
What is contained in the general ledger master file?
- List of transactions with allocating expenses
- Principal FRS file based on the chart of accounts (correct)
- Financial data by responsibility centers
- All historical journal vouchers
Which step occurs after capturing transactions in the financial reporting process?
Which step occurs after capturing transactions in the financial reporting process?
- Make Adjusting Entries
- Prepare the unadjusted trial balance
- Record the Special Journal (correct)
- Prepare the post-closing trial balance
What are managerial reports used for?
What are managerial reports used for?
- Analyzing accounts for year-end closing
- Listing transactions for compliance
- Preparing financial statements
- Evaluating cash flow and sales forecasts (correct)
Which file provides past journal vouchers for audit trails?
Which file provides past journal vouchers for audit trails?
Which of the following is NOT a report generated by the GLS?
Which of the following is NOT a report generated by the GLS?
What is a potential risk associated with the GL/FRS system?
What is a potential risk associated with the GL/FRS system?
Which is an appropriate action in the financial reporting process after posting to the subsidiary ledger?
Which is an appropriate action in the financial reporting process after posting to the subsidiary ledger?
What is included in the budget master file?
What is included in the budget master file?
What is defined as an economic event that affects a firm's assets and is measured in monetary terms?
What is defined as an economic event that affects a firm's assets and is measured in monetary terms?
Which cycle includes the process of planning, scheduling, and controlling the manufacturing process?
Which cycle includes the process of planning, scheduling, and controlling the manufacturing process?
Which type of journal records nonrecurring, infrequent transactions?
Which type of journal records nonrecurring, infrequent transactions?
What term describes a product document that becomes a source document for another system?
What term describes a product document that becomes a source document for another system?
Which of the following statements about the expenditure cycle is correct?
Which of the following statements about the expenditure cycle is correct?
Which ledger provides detailed information for each account type?
Which ledger provides detailed information for each account type?
In a manual accounting system, what is primarily used to capture transaction data?
In a manual accounting system, what is primarily used to capture transaction data?
What connects the accounts receivable balance with the master file in a computer-based accounting system?
What connects the accounts receivable balance with the master file in a computer-based accounting system?
What is the purpose of reconciling the AR control figure with the AR subsidiary account total?
What is the purpose of reconciling the AR control figure with the AR subsidiary account total?
What are two common techniques used in auditing accounts receivable?
What are two common techniques used in auditing accounts receivable?
Which document is typically used in the Sales Journal?
Which document is typically used in the Sales Journal?
In computer-based systems, what is mainly considered the physical audit trail?
In computer-based systems, what is mainly considered the physical audit trail?
Which document can serve as a source document for verifying accounts receivable?
Which document can serve as a source document for verifying accounts receivable?
What is the Accounts Receivable Subsidiary Ledger?
What is the Accounts Receivable Subsidiary Ledger?
Which journal records cash receipts from customers?
Which journal records cash receipts from customers?
What is a disadvantage of computer-based audit trails compared to manual systems?
What is a disadvantage of computer-based audit trails compared to manual systems?
What is one characteristic of legacy systems?
What is one characteristic of legacy systems?
Which of the following describes the nature of transactions in batch processing?
Which of the following describes the nature of transactions in batch processing?
What happens to the master file during updates according to backup procedures?
What happens to the master file during updates according to backup procedures?
What process follows the identification of clerical errors in the batch?
What process follows the identification of clerical errors in the batch?
Which of the following is an advantage of batch processing?
Which of the following is an advantage of batch processing?
What type of environment do legacy data storage systems promote?
What type of environment do legacy data storage systems promote?
Which run rearranges the transaction data by key field?
Which run rearranges the transaction data by key field?
What is a key feature of early legacy systems?
What is a key feature of early legacy systems?
What occurs during the Update Run in batch processing?
What occurs during the Update Run in batch processing?
What is a defining characteristic of computer-based accounting systems?
What is a defining characteristic of computer-based accounting systems?
What is a potential risk related to journal entries in the GL/FRS?
What is a potential risk related to journal entries in the GL/FRS?
Which of the following is necessary for transaction authorization in GL/FRS?
Which of the following is necessary for transaction authorization in GL/FRS?
What consequence can result from unauthorized access to the G/L?
What consequence can result from unauthorized access to the G/L?
What is a key function of independent verification in GL/FRS?
What is a key function of independent verification in GL/FRS?
What advantage does database technology bring to the GL/FRS?
What advantage does database technology bring to the GL/FRS?
How does centralized access in database technology act as a control?
How does centralized access in database technology act as a control?
Which of the following best describes the purpose of HTML?
Which of the following best describes the purpose of HTML?
What is an important feature of HTML related to linking?
What is an important feature of HTML related to linking?
Study Notes
GLS Database Components
- General ledger master file serves as the primary financial reporting system (FRS) based on the chart of accounts.
- General ledger history file is utilized for comparative financial analysis.
- Journal voucher file contains all journal vouchers for the current accounting period.
- Journal voucher history file archives past journal vouchers for auditing purposes.
- Responsibility center file organizes financial data by responsibility centers for management reporting system (MRS).
- Budget master file presents budget data categorized by responsibility centers in MRS.
Financial Reporting Process
- Involves multiple steps: capturing transactions, recording in special journals, posting to subsidiary and general ledgers, and preparing trial balances before creating financial statements.
- Adjusting journal entries and closing entries ensure the accuracy of financial reports and balance sheets.
GLS Reports
- General ledger analysis includes transaction listings, expense allocations to cost centers, account balance comparisons from prior periods, and trial balances.
- Financial statements produced include the balance sheet, income statement, and statement of cash flows.
- Managerial reports analyze various sections such as sales, cash flow, and receivables.
- Chart of accounts provides a coded listing to categorize various accounts accurately.
Potential Risks in General Ledger/Financial Reporting System (GL/FRS)
- Risks include defective audit trails, unauthorized access, discrepancies between GL and subsidiary accounts, and inaccurate journal vouchers leading to incorrect GL balances.
Financial Transaction Overview
- Financial transactions are economic events impacting a firm's assets and equity, categorized into three cycles: expenditure, conversion, and revenue cycles.
- Each cycle involves physical and financial components, creating delays due to credit relationships with suppliers and customers.
Manual System Accounting Records
- Source documents capture transaction data, while product documents result from transaction processing.
- Journals record transactions chronologically; special journals handle frequent transactions, while general journals capture infrequent ones.
- Ledgers aggregate financial activities; the general ledger shows overall account activity, while subsidiary ledgers provide detailed views for specific accounts.
Computer-Based Accounting Systems
- The audit trail in computer systems is less visible than in manual systems, relying on physical data entry and computer programs stored in magnetic files.
- Understanding legacy systems is crucial, as they have mainframe-based applications, batch-oriented processing, and varied data storage methods.
Updating Master Files and Backup Procedures
- Master file updates require a backup to maintain data integrity; recovery programs recreate pre-update versions of master files.
- Systems can be classified into batch systems (accumulating and processing similar transactions together) and real-time systems for immediate processing.
Batch Processing Steps
- Involves keystroke entry, error checking, sorting by primary keys, updating master files, and maintaining backup procedures.
- Enhances organizational efficiency by processing multiple transactions simultaneously rather than individually.
GL/FRS Control Issues
- Controls required for transaction authorization, segregation of duties, access controls, and independent verification to minimize errors and fraud.
- Sarbanes-Oxley mandates rigorous controls to limit access to authorized users only.
Advantages of Database Technology in GL/FRS
- Ensures immediate updates and reconciliation, facilitating timely information access.
- Centralized records and robust security measures like passwords and authorization tables bolster control over financial data.
HTML Overview
- HTML (Hyper Text Markup Language) is used for structuring web pages, defining layouts, fonts, and graphic elements for appealing presentations.
- Supports hypertext links, enabling navigation between documents and enhancing user interactivity on the web.
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Description
Explore the critical components of the General Ledger System (GLS) and its interrelation with other information subsystems. This quiz covers the essentials of ledger master files, journal vouchers, and the importance of historical data for audits. Test your understanding of these financial structures and their applications.
