(MCQs) with answer from Introduction to Computerized Accounting System (CAS

 

SBSIRCOMMERCE PRESENT 

Here are 40 multiple-choice questions (MCQs) with answer from Introduction to Computerized Accounting System (CAS)**

Introduction to Computerized Accounting System (CAS)**

1. What is the primary function of a computerized accounting system (CAS)?

   - a) Data storage

   - b) Inventory control

   - c) Recording, processing, and generating financial information

   - d) Payroll management  

   **Answer: c) Recording, processing, and generating financial information**

2. Which of the following is NOT a component of CAS?

   - a) Hardware

   - b) Software

   - c) Accounting standards

   - d) People  

   **Answer: c) Accounting standards**

3. **Which of the following is an advantage of CAS?**

   - a) Prone to manual errors

   - b) Time-consuming

   - c) Faster data processing

   - d) Limited to large organizations  

   **Answer: c) Faster data processing**

4. **What is a limitation of CAS?**

   - a) Reduces data accuracy

   - b) Requires constant electricity supply

   - c) Eliminates the need for accountants

   - d) Has no training requirement  

   **Answer: b) Requires constant electricity supply**

5. **Which of the following is NOT a feature of CAS?**

   - a) Data redundancy

   - b) Real-time data processing

   - c) Automated report generation

   - d) Backup and security features  

   **Answer: a) Data redundancy**

6. Accounting Information System (AIS) helps in:**

   - a) Automating payroll processes

   - b) Storing inventory data

   - c) Collecting, storing, and processing financial data

   - d) Managing employee records  

   **Answer: c) Collecting, storing, and processing financial data**

7. What is the role of Management Information System (MIS)?**

   - a) To track employee attendance

   - b) To support decision-making by providing relevant data

   - c) To handle banking transactions

   - d) To manage customer relationships  

   **Answer: b) To support decision-making by providing relevant data.

8. **Which of the following is used to ensure that total debits equal total credits in the accounting records?**

   - a) Balance Sheet

   - b) Trial Balance

   - c) Profit and Loss Account

   - d) Cash Flow Statement  

   **Answer: b) Trial Balance**

9. **In which financial statement is net income or net loss calculated?**

   - a) Trial Balance

   - b) Profit and Loss Account

   - c) Balance Sheet

   - d) Cash Flow Statement  

   **Answer: b) Profit and Loss Account**

10. **A Balance Sheet reflects:**

    - a) Revenue and expenses

    - b) Cash inflows and outflows

    - c) Assets, liabilities, and equity

    - d) All business transactions  

    **Answer: c) Assets, liabilities, and equity**

11. **Spreadsheets are commonly used for:**

    - a) Preparing financial statements

    - b) Making payments to suppliers

    - c) Conducting market research

    - d) Hiring employees  

    **Answer: a) Preparing financial statements

12. **Which of the following is an advantage of computerized accounting over manual accounting?**

    - a) Easier to make mistakes

    - b) Slower processing of data

    - c) Faster access to financial reports

    - d) No need for backups  

    **Answer: c) Faster access to financial reports**

13. **Manual accounting requires:**

    - a) Specialized software

    - b) Ledger books and calculators

    - c) High-level programming knowledge

    - d) Automatic report generation  

    **Answer: b) Ledger books and calculators**

14. **One disadvantage of manual accounting is:**

    - a) Increased data security

    - b) Limited scope for errors

    - c) Time-consuming and prone to mistakes

    - d) Cost-effective  

    **Answer: c) Time-consuming and prone to mistakes**

15. In computerized accounting, the risk of losing data can be mitigated by:

    - a) Using ledger books

    - b) Regular data backups

    - c) Keeping hard copies of all records

    - d) Relying on manual entries  

    **Answer: b) Regular data backups**

16. Which of the following is a key factor when selecting an accounting software package?

    - a) Brand popularity

    - b) Compatibility with organizational needs

    - c) Number of available themes

    - d) Size of the software installation file  

    **Answer: b) Compatibility with organizational needs**

17. **Which factor is least important when selecting accounting software for a small business?**

    - a) User-friendliness

    - b) Scalability

    - c) Ability to handle multiple currencies

    - d) Cost  

    **Answer: c) Ability to handle multiple currencies**

18. **For a large corporation with complex needs, the best type of accounting software would be:**

    - a) Ready-to-use

    - b) Customized

    - c) Tailor-made

    - d) Freeware  

    **Answer: c) Tailor-made**

19. **Which of the following is a disadvantage of selecting unsuitable accounting software?**

    - a) High productivity

    - b) Ease of use

    - c) Financial reporting inaccuracies

    - d) Enhanced security  

    **Answer: c) Financial reporting inaccuracies**

20. **Which of the following is an example of ready-to-use accounting software?**

    - a) Tally

    - b) SAP

    - c) Oracle

    - d) Excel  

    **Answer: a) Tally**

21. **Tailor-made accounting software is best suited for:**

    - a) Small retail stores

    - b) Large businesses with unique requirements

    - c) Freelancers

    - d) Startups  

    **Answer: b) Large businesses with unique requirements**

22. **A customized accounting system is:**

    - a) Designed for general use

    - b) Built to suit the specific needs of an organization

    - c) Free for small businesses

    - d) Limited to non-profit organizations  

    **Answer: b) Built to suit the specific needs of an organization**

23. **The major disadvantage of tailor-made accounting software is:**

    - a) Its flexibility

    - b) The cost involved in development and maintenance

    - c) High speed of processing

    - d) Limited features  

    **Answer: b) The cost involved in development and maintenance**

24. **Ready-to-use accounting software is characterized by:**

    - a) Limited customization options

    - b) High cost and complexity

    - c) Inability to handle multiple clients

    - d) Exclusivity to large businesses  

    **Answer: a) Limited customization options**

25. **Which of the following is NOT an advantage of computerized accounting software?**

    - a) Real-time data access

    - b) Data redundancy

    - c) Automated financial reporting

    - d) Accurate data processing  

    **Answer: b) Data redundancy

26. **Which of the following factors affects the selection of an accounting software package?**

    - a) Organizational size and complexity

    - b) The color of the interface

    - c) Internet speed

    - d) Social media presence of the software  

    **Answer: a) Organizational size and complexity**

27. **An organization with a limited budget should consider:**

    - a) Tailor-made software

    - b) A free or low-cost ready-to-use software

    - c) Hiring a large development team

    - d) Customized software only  

    **Answer: b) A free or low-cost ready-to-use software**

28. **Which of the following types of businesses is most likely to use a customized accounting system?**

    - a) A small grocery store

    - b) A global corporation with diverse operations

    - c) A freelancer

    - d) A new startup  

    **Answer: b) A global corporation with diverse operations**

29. **Scalability in accounting software refers to:**

    - a) The ability to change its appearance

    - b) The software’s capacity to handle growing business needs

    - c) The price of the software

    - d) Its ability to work without internet  

    **Answer: b) The software’s capacity to handle growing business needs**

30. **Which of the following is NOT typically a consideration when selecting accounting software?**

    - a) Data security

    - b) Ease of use

    - c) The number of employees in the software development team

    - d) Integration with other business systems  

    **Answer: c) The number of employees in the software development team

31. **Which of the following best describes the term "real-time processing" in CAS?**

   - a) Data is processed at a specific scheduled time

   - b) Data is processed immediately as transactions occur

   - c) Data is processed manually

   - d) Data is processed monthly  

   **Answer: b) Data is processed immediately as transactions occur**

32. **Which of the following is a key advantage of using CAS over manual accounting systems?**

   - a) Lower implementation costs

   - b) Easier data retrieval and report generation

   - c) Lower training requirements

   - d) Minimal software updates  

   **Answer: b) Easier data retrieval and report generation**

33. **Which of the following accounting processes can be automated with CAS?**

   - a) Budgeting and forecasting

   - b) Customer relationship management

   - c) Payroll and tax calculations

   - d) Legal compliance procedures  

   **Answer: c) Payroll and tax calculations**

34. **One of the key differences between manual and computerized accounting is:**

   - a) Computerized accounting is more prone to errors

   - b) Manual accounting offers faster processing

   - c) Computerized accounting allows for automation of repetitive tasks

   - d) Manual accounting has built-in error detection systems  

   **Answer: c) Computerized accounting allows for automation of repetitive tasks**

35. **Which of the following is a challenge faced in manual accounting?**

   - a) Automation of ledger entries

   - b) Difficulty in maintaining records as business grows

   - c) Availability of financial reports in real-time

   - d) Easy backup and recovery of data  

   **Answer: b) Difficulty in maintaining records as business grows**

36. **Which of the following factors would most likely influence a small business when choosing accounting software?**

   - a) High scalability

   - b) Complex customization options

   - c) Ease of use and low cost

   - d) Ability to manage global transactions  

   **Answer: c) Ease of use and low cost**

37. **The ability of accounting software to integrate with other business applications is important because:**

   - a) It reduces software licensing costs

   - b) It eliminates the need for financial reports

   - c) It allows seamless sharing of data across different systems

   - d) It helps in reducing data security risks  

   **Answer: c) It allows seamless sharing of data across different systems**

38. **One disadvantage of a ready-to-use accounting system is:**

   - a) High implementation cost

   - b) Inability to customize according to specific business needs

   - c) Requires in-depth programming knowledge

   - d) Does not support financial report generation  

   **Answer: b) Inability to customize according to specific business needs**

39. Customized accounting software is best suited for businesses that:**

   - a) Require quick deployment with standard features

   - b) Have highly specific and unique accounting needs

   - c) Have limited financial transactions

   - d) Prefer free software options  

   **Answer: b) Have highly specific and unique accounting needs.

40. **Tally is an example of:**

   - a) Tailor-made accounting software

   - b) Ready-to-use accounting software

   - c) Customized accounting software

   - d) Spreadsheet software  

   **Answer: b) Ready-to-use accounting software**