SUA CHAPTERS 1-3 QUESTIONS AND ANSWERS 2026
Recording transactions requires five essential steps: - Answers - 1. Identify the
exchanges
2. Determine account balances affected
3. Assign proper values
4. Record transactions in proper time period
5. Record transactions in records/summarize on stmts
Useful distinctions between different documents: - Answers - source (internal/external)
and when they're prepared
Four essential characteristics of journals: - Answers - -every transaction should be
recorded in a journal
-follow requirements of double-entry recording system
-use a general journal and several special journals
-the # and titles of journals for different companies vary
For transactions in the general journal that affect an account w/ a subsidiary ledger
account: - Answers - the transactions must be posted to both the general and subsidiary
ledgers
The primary reason for preparing adjusting entries is to - Answers - convert from cash
basis accounting to accrual
Internal controls - Answers - are the methods used by a company to safeguard its
assets and provide reasonable assurance of the accuracy of accounting data
The primary types of controls that need to be understood - Answers - -adequate
documents and records
-authorization of transactions
-separation of the custody of assets from accounting
-independent checks on performance
Adequate documents and records - Answers - improves the likelihood of the correct
transmission of information to users
documents and records should be:
-prenumbered consecutively; prepared before a transaction occurs, at the time, or soon
after; simple; designed for multiple uses whenever possible
Authorization of transactions - Answers - every transaction must be properly authorized
if control is to be satisfactory (approval of credit)
Recording transactions requires five essential steps: - Answers - 1. Identify the
exchanges
2. Determine account balances affected
3. Assign proper values
4. Record transactions in proper time period
5. Record transactions in records/summarize on stmts
Useful distinctions between different documents: - Answers - source (internal/external)
and when they're prepared
Four essential characteristics of journals: - Answers - -every transaction should be
recorded in a journal
-follow requirements of double-entry recording system
-use a general journal and several special journals
-the # and titles of journals for different companies vary
For transactions in the general journal that affect an account w/ a subsidiary ledger
account: - Answers - the transactions must be posted to both the general and subsidiary
ledgers
The primary reason for preparing adjusting entries is to - Answers - convert from cash
basis accounting to accrual
Internal controls - Answers - are the methods used by a company to safeguard its
assets and provide reasonable assurance of the accuracy of accounting data
The primary types of controls that need to be understood - Answers - -adequate
documents and records
-authorization of transactions
-separation of the custody of assets from accounting
-independent checks on performance
Adequate documents and records - Answers - improves the likelihood of the correct
transmission of information to users
documents and records should be:
-prenumbered consecutively; prepared before a transaction occurs, at the time, or soon
after; simple; designed for multiple uses whenever possible
Authorization of transactions - Answers - every transaction must be properly authorized
if control is to be satisfactory (approval of credit)
