Question 1

The basic components of an accounting information system include all of the following except:

Accepted Answer

A)  Source documents. 
B)  Information storage. 
C)  Warehouses. 
D)  Information processors. 
E)  Output devices. 
A)  Source documents. 
B)  Information storage. 
C)  Warehouses. 
D)  Information processors. 
E)  Output devices. C

Question 2

Because special journals are designed to suit businesses, good systems design for a business could include collapsing the sales and cash disbursements journal into one journal.

Accepted Answer

A) True 
 B)False  False

Question 3

Farthington Soccer Supplies purchases merchandise from a supplier on credit, terms 2/10, n/30 for $15,300. Assume the company uses a perpetual inventory system, and records purchases using the gross method. When recording the payment of the invoice within the discount period in its cash disbursement journal, Farthington would enter:

Accepted Answer

A)  $15,300 in the Accounts Payable Dr. column; $14,994 in the Cash Cr. column; and $306 in the Inventory Cr. column. 
B)  $14,994 in the Accounts Payable Dr. column and $14,994 in the Cash Cr. column. 
C)  $15,300 in the Cash Cr. column and $15,300 in the Accounts Payable Dr. column. 
D)  $15,300 in the Cash Cr. column and $15,300 in the Inventory Dr. column. 
E)  $15,300 in the Inventory Cr. column; $14,994 in the Accounts Payable Dr. column; and $306 in the Inventory Cr. column. 
A)  $15,300 in the Accounts Payable Dr. column; $14,994 in the Cash Cr. column; and $306 in the Inventory Cr. column. 
B)  $14,994 in the Accounts Payable Dr. column and $14,994 in the Cash Cr. column. 
C)  $15,300 in the Cash Cr. column and $15,300 in the Accounts Payable Dr. column. 
D)  $15,300 in the Cash Cr. column and $15,300 in the Inventory Dr. column. 
E)  $15,300 in the Inventory Cr. column; $14,994 in the Accounts Payable Dr. column; and $306 in the Inventory Cr. column. A

Question 4

The flexibility principle of accounting information systems prescribes that the:

Accepted Answer

A)  System conforms to a company's activities, personnel, and structure. 
B)  System aid managers in controlling and monitoring business activities. 
C)  System report useful, understandable, timely, and pertinent information for effective decision making. 
D)  Benefits from an activity in the system outweigh the costs of the activity. 
E)  System be able to adapt to changes in the company, business environment, and needs of decision makers. 
A)  System conforms to a company's activities, personnel, and structure. 
B)  System aid managers in controlling and monitoring business activities. 
C)  System report useful, understandable, timely, and pertinent information for effective decision making. 
D)  Benefits from an activity in the system outweigh the costs of the activity. 
E)  System be able to adapt to changes in the company, business environment, and needs of decision makers.

Question 5

A subsidiary ledger:

Accepted Answer

A)  Is a listing of all of the accounts of a business. 
B)  Is also called a general ledger. 
C)  Is a listing of individual accounts and amounts with a common characteristic. 
D)  Is also called a special journal. 
E)  Includes transactions not covered by special journals. 
A)  Is a listing of all of the accounts of a business. 
B)  Is also called a general ledger. 
C)  Is a listing of individual accounts and amounts with a common characteristic. 
D)  Is also called a special journal. 
E)  Includes transactions not covered by special journals.

Question 6

Fagin Company uses special journals to record transactions. Below are the sales journal and cash receipts journal for Fagin in the first part of August.
Required:
a. Open an accounts receivable subsidiary ledger having a T-account for each customer. Post the invoices to the subsidiary ledger.
b. Open an Accounts Receivable controlling T-Account. Post the end-of the month totals that affect the Accounts Receivable account only.
c. Prepare a schedule of accounts receivable and prove that its total equals the Accounts Receivable controlling account balance.

Accepted Answer

a. To open an accounts receivable subsid

Question 7

The following information is available for some of Branson's segments (all amounts are in millions):
 $$\begin{array} { | l | l | l | l | } 
\hline & \text { North America } & \text { Asia } & \text { Central America } \
\hline \text { Segment sales } & \$ 5,190 & \$ 750 & \$ 2,350 \
\hline \text { Segment operating income } & 1,494 & 273 & 1,127 \
\hline \text { Segment average assets } & 4,700 & 541 & 1,382 \
\hline
\end{array}$$ a. Determine the segment return on assets for each geographic segment.
b. Comment on the results. How do the segments compare with respect to profitability?

Accepted Answer

a.
 b. Central Ameri

Question 8

Which of the following statements regarding input devices is not true?

Accepted Answer

A)  Input devices include keyboards and scanners. 
B)  Input devices capture information from source documents and enable its transfer to the system's information processing component. 
C)  Input devices make accounting system information available to users. 
D)  Input devices convert data on source documents from written form to a form usable for the system. 
E)  Input devices include journal entries. 
A)  Input devices include keyboards and scanners. 
B)  Input devices capture information from source documents and enable its transfer to the system's information processing component. 
C)  Input devices make accounting system information available to users. 
D)  Input devices convert data on source documents from written form to a form usable for the system. 
E)  Input devices include journal entries.

Question 9

Input devices are the means to make accounting information available to users.

Accepted Answer

A) True 
 B)False

Question 10

The Accounts Payable controlling account:

Accepted Answer

A)  Equals the sum of all balances of supplier accounts. 
B)  Reduces the number of entries in the general journals. 
C)  Increases the number of columns in the journals. 
D)  Stores the transaction data of individual supplies. 
E)  Is not included in a company's chart of accounts. 
A)  Equals the sum of all balances of supplier accounts. 
B)  Reduces the number of entries in the general journals. 
C)  Increases the number of columns in the journals. 
D)  Stores the transaction data of individual supplies. 
E)  Is not included in a company's chart of accounts.

Question 11

Plimpton Sales uses special journals to record business transactions. Plimpton sells office equipment. The company completed the following transactions a through j. Identify the journal in which each transaction should be recorded.
 $$\begin{array} { | l | l | l | } 
\hline \text { a. } & \text { Paid an installnent on a bank loan. } &\quad\quad\quad\quad\quad \
\hline \text { b. } & \text { Purchased inventory on credit. } & \
\hline \text { c. } & \text { Paid cash to a creditor. } & \
\hline \text { d. } & \text { Sold equipment to a customer on credit. } & \
\hline \text { e. } & \text { Sold equipment to a customer for cash. } & \
\hline \text { f. } & \text { Paid employees' salaries in cash. } & \
\hline \text { g. } & \text { Received payment from a customer on credit. } & \
\hline \text { h. } & \text { Purchased offee supplies on account. } & \
\hline \text { i. } & \text { Returned inventory to creditor before payment. } & \
\hline \text { j. } & \text { Sold equipment on account. } & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | } 
\hline \t

Question 12

A business segment is part of a company that:

Accepted Answer

A)  Requires subsidiary ledgers. 
B)  Cannot report its results separately. 
C)  Requires only internal reporting. 
D)  Requires special journals. 
E)  Is separately identified by its products, services, or geographic market. 
A)  Requires subsidiary ledgers. 
B)  Cannot report its results separately. 
C)  Requires only internal reporting. 
D)  Requires special journals. 
E)  Is separately identified by its products, services, or geographic market.

Question 13

A company entered into the following transactions. Match each transaction with the appropriate journal in which it should be recorded.
a. Sales journal
b. Purchases journal
c. Cash receipts journal
d. Cash disbursements journal
e. General journal
_____ 1. Borrowed $7,000 cash from the local bank.
_____ 2. A customer returned a $250 item purchased on account.
_____ 3. Purchased merchandise on account, $2,100.
_____ 4. Purchased equipment on account for $4,000.
_____ 5. Paid $15,000 cash in wages to employees.
_____ 6. Paid a telephone bill for $3,400 cash.
_____ 7. Purchased $1,150 of office supplies on account.
_____ 8. Recorded depreciation on office equipment of $2,000.
_____ 9. Returned defective inventory purchased on account, $2,550.
_____ 10. Recorded cash sales of $12,700.

Accepted Answer

1. C; 2. E; 3. B; 4.

Question 14

An accounts receivable ledger is a:

Accepted Answer

A)  List of the separate accounts that show the balances outstanding from credit customers. 
B)  Book of original entry that is designed and used for recording only sales on credit. 
C)  Ledger that contains all financial statement accounts of a business. 
D)  Subsidiary ledger that contains a separate account for each party that grants both short-term and long-term credit on account to the company. 
E)  Subsidiary ledger that contains an account for each supplier (creditor). 
A)  List of the separate accounts that show the balances outstanding from credit customers. 
B)  Book of original entry that is designed and used for recording only sales on credit. 
C)  Ledger that contains all financial statement accounts of a business. 
D)  Subsidiary ledger that contains a separate account for each party that grants both short-term and long-term credit on account to the company. 
E)  Subsidiary ledger that contains an account for each supplier (creditor).

Question 15

The controlling account, Accounts Payable in the general ledger has a separate subsidiary account for each creditor in the accounts payable ledger.

Accepted Answer

A) True 
 B)False

Question 16

A procedure called direct posting of sales invoices involves posting sales directly to the customer accounts in the accounts receivable ledger, making a period end journal entry, and avoiding the use of the sales journal.

Accepted Answer

A) True 
 B)False

Question 17

A journal that is used to record and post transactions of a similar type is a(n):

Accepted Answer

A)  Special journal. 
B)  General journal. 
C)  Perpetual journal. 
D)  Columnar journal. 
E)  All-purpose journal. 
A)  Special journal. 
B)  General journal. 
C)  Perpetual journal. 
D)  Columnar journal. 
E)  All-purpose journal.

Question 18

________ provide the basic information processed by an accounting system, and can include bank statements, billings to customers, and employee earnings records.

Accepted Answer

The answer of ________ provide the basic information processed by...

Question 19

The ________ principle requires that an accounting information system aid managers in controlling and monitoring business activities.

Accepted Answer

The answer of The ________ principle requires that an accounting...

Question 20

The flexibility principle prescribes that an accounting information system be able to adapt to changes in the company, business environment, and needs of decision makers.

Accepted Answer

A) True 
 B)False

Exam 7: Accounting Information Systems

The basic components of an accounting information system include all of the following except:

Because special journals are designed to suit businesses, good systems design for a business could include collapsing the sales and cash disbursements journal into one journal.

The flexibility principle of accounting information systems prescribes that the:

A subsidiary ledger:

Which of the following statements regarding input devices is not true?

Input devices are the means to make accounting information available to users.

The Accounts Payable controlling account:

A business segment is part of a company that:

An accounts receivable ledger is a:

The controlling account, Accounts Payable in the general ledger has a separate subsidiary account for each creditor in the accounts payable ledger.

A procedure called direct posting of sales invoices involves posting sales directly to the customer accounts in the accounts receivable ledger, making a period end journal entry, and avoiding the use of the sales journal.

A journal that is used to record and post transactions of a similar type is a(n):

________ provide the basic information processed by an accounting system, and can include bank statements, billings to customers, and employee earnings records.

The ________ principle requires that an accounting information system aid managers in controlling and monitoring business activities.

The flexibility principle prescribes that an accounting information system be able to adapt to changes in the company, business environment, and needs of decision makers.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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