Question 1

Internal controls include policies to protect company assets and achieve compliance with laws and regulations.

Accepted Answer

A) True 
 B)False

Question 2

The sales journals of companies using the perpetual and periodic inventory systems differ in that under the perpetual system a column is used to record cost of goods sold and inventory amounts for each sale but not the periodic system.

Accepted Answer

A) True 
 B)False

Question 3

Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

Accepted Answer

A) True 
 B)False

Question 4

The purchases journal is typically used to record only purchases of inventory.

Accepted Answer

A) True 
 B)False

Question 5

A sales journal is used to record cash sales.

Accepted Answer

A) True 
 B)False

Question 6

A company borrowed $80,000 from a bank by signing a long-term note payable. The journal the transaction would be recorded in is the:

Accepted Answer

A)  Sales journal. 
B)  Purchases journal. 
C)  General journal. 
D)  Cash disbursements journal. 
E)  Cash receipts journal. 
A)  Sales journal. 
B)  Purchases journal. 
C)  General journal. 
D)  Cash disbursements journal. 
E)  Cash receipts journal.

Question 7

A company sells merchandise on credit for $6,000. The merchandise cost is $3,400. The journal that the transaction would be recorded in is the:

Accepted Answer

A)  Cash disbursements journal. 
B)  Sales journal. 
C)  Purchases journal. 
D)  Cash receipts journal. 
E)  General journal. 
A)  Cash disbursements journal. 
B)  Sales journal. 
C)  Purchases journal. 
D)  Cash receipts journal. 
E)  General journal.

Question 8

Which of the following journals would a company use to record cash collections from customers, net of discounts taken?

Accepted Answer

A)  Cash receipts journal. 
B)  General journal. 
C)  Cash disbursements journal. 
D)  Sales journal. 
E)  Purchases journal. 
A)  Cash receipts journal. 
B)  General journal. 
C)  Cash disbursements journal. 
D)  Sales journal. 
E)  Purchases journal.

Question 9

A special journal is used to record and post transactions of a similar type.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following accounting principles prescribes that an accounting information system report useful, understandable, timely, and pertinent information for effective decision-making?

Accepted Answer

A)  Flexibility principle. 
B)  Relevance principle. 
C)  Compatibility principle. 
D)  Cost-Benefit principle. 
E)  Control principle. 
A)  Flexibility principle. 
B)  Relevance principle. 
C)  Compatibility principle. 
D)  Cost-Benefit principle. 
E)  Control principle.

Question 11

The process of adding the Debit column totals, then the credit column totals of a journal and comparing the two sums for equality is an example of:

Accepted Answer

A)  Reconciling. 
B)  Journalizing. 
C)  Footing. 
D)  Crossfooting. 
E)  Posting. 
A)  Reconciling. 
B)  Journalizing. 
C)  Footing. 
D)  Crossfooting. 
E)  Posting.

Question 12

Examples of other subsidiary ledgers besides those for accounts receivable and accounts payable may include all of the following except:

Accepted Answer

A)  Inventory. 
B)  Equipment. 
C)  Payroll. 
D)  Investments. 
E)  Cash. 
A)  Inventory. 
B)  Equipment. 
C)  Payroll. 
D)  Investments. 
E)  Cash.

Question 13

When auditors audit financial statements and a company's controls they rely on accounting system databases.

Accepted Answer

A) True 
 B)False

Question 14

After posting is completed, there may be an error if:

Accepted Answer

A)  The sum of the supplier account balances does not equal the general ledger Accounts Payable controlling account balance. 
B)  The sum of the accounts receivable ledger does not equal the balance in the sales journal. 
C)  The sum of the accounts receivable ledger does not equal the balance in the Sales account. 
D)  The sum of the supplier account balances does not equal the total in the purchases journal. 
E)  The balance in the sales journal does not equal the Accounts Receivable account balance. 
A)  The sum of the supplier account balances does not equal the general ledger Accounts Payable controlling account balance. 
B)  The sum of the accounts receivable ledger does not equal the balance in the sales journal. 
C)  The sum of the accounts receivable ledger does not equal the balance in the Sales account. 
D)  The sum of the supplier account balances does not equal the total in the purchases journal. 
E)  The balance in the sales journal does not equal the Accounts Receivable account balance.

Question 15

A company would use which of the following journals to record cash payments?

Accepted Answer

A)  General journal. 
B)  Sales journal. 
C)  Cash disbursements journal. 
D)  Cash receipts journal. 
E)  Purchases journal. 
A)  General journal. 
B)  Sales journal. 
C)  Cash disbursements journal. 
D)  Cash receipts journal. 
E)  Purchases journal.

Question 16

Which of the following statements regarding accounting information systems is not true?

Accepted Answer

A)  Accounting information systems communicate information to business decision makers. 
B)  Accounting information systems are useful to effective decision making. 
C)  Accounting information systems organize data in useful forms. 
D)  Accounting information systems are not subject to internal control policies. 
E)  Accounting information systems collect and process data from transactions and events. 
A)  Accounting information systems communicate information to business decision makers. 
B)  Accounting information systems are useful to effective decision making. 
C)  Accounting information systems organize data in useful forms. 
D)  Accounting information systems are not subject to internal control policies. 
E)  Accounting information systems collect and process data from transactions and events.

Question 17

______________consist of people, records, methods, and equipment that collect and process data from transactions and events, organize them in useful reports and communicate results to decision makers.

Accepted Answer

Accounting

Exam 7: Accounting Information Systems

Internal controls include policies to protect company assets and achieve compliance with laws and regulations.

The sales journals of companies using the perpetual and periodic inventory systems differ in that under the perpetual system a column is used to record cost of goods sold and inventory amounts for each sale but not the periodic system.

Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

The purchases journal is typically used to record only purchases of inventory.

A sales journal is used to record cash sales.

A company borrowed $80,000 from a bank by signing a long-term note payable. The journal the transaction would be recorded in is the:

A company sells merchandise on credit for $6,000. The merchandise cost is $3,400. The journal that the transaction would be recorded in is the:

Which of the following journals would a company use to record cash collections from customers, net of discounts taken?

A special journal is used to record and post transactions of a similar type.

Which of the following accounting principles prescribes that an accounting information system report useful, understandable, timely, and pertinent information for effective decision-making?

The process of adding the Debit column totals, then the credit column totals of a journal and comparing the two sums for equality is an example of:

Examples of other subsidiary ledgers besides those for accounts receivable and accounts payable may include all of the following except:

When auditors audit financial statements and a company's controls they rely on accounting system databases.

After posting is completed, there may be an error if:

A company would use which of the following journals to record cash payments?

Which of the following statements regarding accounting information systems is not true?

______________consist of people, records, methods, and equipment that collect and process data from transactions and events, organize them in useful reports and communicate results to 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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