Accounting Information Systems: The Processes and Controls, 2nd Edition

END OF CHAPTER MATERIAL

CONCEPT CHECK

1. 1. Which of the following is not part of an administrative process?
   1. The sale of stock
   2. The sale of bonds
   3. The write-off of bad debts
   4. The purchase of marketable securities
2. 2. Which of the following statements is not true regarding source of capital transactions?
   1. These processes should not be initiated unless there is specific authorization by management at a top level.
   2. Source of capital processes will result in potential dividend or interest payments.
   3. Retirement of debt is a source of capital process.
   4. The fact that these transactions and processes cannot occur without oversight by top management means other controls are not necessary.
3. 3. The officer within a corporation that usually has oversight responsibility for investment processes is the
   1. controller
   2. treasurer
   3. chief executive officer (CEO)
   4. chief accounting officer (CAO)
4. 4. Which of the following statements is not true regarding internal controls of capital and investment processes?
   1. Internal controls aimed at preventing and detecting employee fraud in capital and investment processes are not as effective.
   2. Top management fraud, rather than employee fraud, is more likely to occur.
   3. Any fraud is likely to involve manipulating capital and investment processes.
   4. Because of top management oversight, the auditor need not review these processes.
5. 5. Which of the following statements is true?
   1. Routine transactions are recorded in the general journal.
   2. Nonroutine transactions are entered in the ...