Question 1

In an accounting information system, source documents are the documents which:

Accepted Answer

A) are audited and presented to the Securities Exchange Commission. 
B) detail the strategic planning of the business. 
C) have complete information about the financial statements. 
D) provide the evidence for accounting transactions. 
A) are audited and presented to the Securities Exchange Commission. 
B) detail the strategic planning of the business. 
C) have complete information about the financial statements. 
D) provide the evidence for accounting transactions. D

Question 2

In a computerized accounting information system, the business does not have to record the transaction in debit and credit format.

Accepted Answer

A) True 
 B)False  True

Question 3

Generally, all transactions are recorded in a special journal as well as the general journal.

Accepted Answer

A) True 
 B)False  False

Question 4

Mercury Corporation receives a landscaping bill on January 15 and is required to pay it before February 15. In which of the following functions of QuickBooks will this transaction be recorded on the date of receipt of the bill?

Accepted Answer

A) Pay Bills 
B) Enter Bills 
C) Invoices 
D) Receive Payments 
A) Pay Bills 
B) Enter Bills 
C) Invoices 
D) Receive Payments

Question 5

In a perpetual inventory system, when cash sales are recorded:

Accepted Answer

A) merchandise inventory decreases and cost of goods sold decreases. 
B) sales revenue increases and cash decreases. 
C) sales revenue increases and equity decreases. 
D) merchandise inventory decreases and equity decreases. 
A) merchandise inventory decreases and cost of goods sold decreases. 
B) sales revenue increases and cash decreases. 
C) sales revenue increases and equity decreases. 
D) merchandise inventory decreases and equity decreases.

Question 6

One of the advantages of a computerized accounting information system, as compared to a manual one, is that it does not cost to ensure that the firm's data and information are secure.

Accepted Answer

A) True 
 B)False

Question 7

An enterprise resource planning (ERP)system is a:

Accepted Answer

A) hardware system that controls the access of employees to different levels of production in a firm. 
B) software system used by small companies to record revenue and expenses. 
C) hardware system of electronic linkages that allows different computers to share the same information. 
D) software system that can integrate all of a company's functions, departments, and data into a single system. 
A) hardware system that controls the access of employees to different levels of production in a firm. 
B) software system used by small companies to record revenue and expenses. 
C) hardware system of electronic linkages that allows different computers to share the same information. 
D) software system that can integrate all of a company's functions, departments, and data into a single system.

Question 8

Entries from the purchases journal are posted monthly to the accounts payable subsidiary ledger and daily to the general ledger.

Accepted Answer

A) True 
 B)False

Question 9

A CR.5 posting reference in a subsidiary ledger indicates that:

Accepted Answer

A) the posting is transferred from the cash receipts journal, page 5. 
B) the transaction in page number 5 is credited. 
C) the credited amount is after a 5% discount. 
D) the sales on credit is expected to be paid within 5 days. 
A) the posting is transferred from the cash receipts journal, page 5. 
B) the transaction in page number 5 is credited. 
C) the credited amount is after a 5% discount. 
D) the sales on credit is expected to be paid within 5 days.

Question 10

Which of the following is a benefit of using a computerized accounting information system?

Accepted Answer

A) It can accurately measure the intrinsic value of the firm using the built-in simulation techniques. 
B) The accountant, who inputs data, is not required to review the financial statements for accuracy. 
C) The accountant, who inputs data, need not set the correct time period. 
D) It automatically transfers the amounts from the general ledger to the financial statements. 
A) It can accurately measure the intrinsic value of the firm using the built-in simulation techniques. 
B) The accountant, who inputs data, is not required to review the financial statements for accuracy. 
C) The accountant, who inputs data, need not set the correct time period. 
D) It automatically transfers the amounts from the general ledger to the financial statements.

Question 11

Which of the following transactions will be recorded in the purchases journal?

Accepted Answer

A) purchase of furniture on account 
B) purchase of merchandise inventory for cash 
C) sale of a product on account 
D) sales of a product for cash 
A) purchase of furniture on account 
B) purchase of merchandise inventory for cash 
C) sale of a product on account 
D) sales of a product for cash

Question 12

Which of the following transactions is recorded in the "Enter Bills" function of QuickBooks?

Accepted Answer

A) A firm paying an electricity bill 
B) A firm receiving a utility bill 
C) A firm writing down the value of an impaired asset 
D) A firm making coupon payments to the bondholders 
A) A firm paying an electricity bill 
B) A firm receiving a utility bill 
C) A firm writing down the value of an impaired asset 
D) A firm making coupon payments to the bondholders

Question 13

One of the main disadvantages of a typical ERP system is that it cannot be offered through cloud computing.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following activities is handled in the Money In section of QuickBooks?

Accepted Answer

A) entering sales receipts 
B) entering bills 
C) entering depreciation expense 
D) LIFO to FIFO adjustments in the financial statements 
A) entering sales receipts 
B) entering bills 
C) entering depreciation expense 
D) LIFO to FIFO adjustments in the financial statements

Question 15

With a perpetual inventory system, which of the following are the credit columns of a typical cash payments journal?

Accepted Answer

A) Merchandise Inventory column and Cash column 
B) Other Accounts column and Accounts Payable column 
C) Merchandise Inventory column and Accounts Payable column 
D) Other Accounts column and Cash column 
A) Merchandise Inventory column and Cash column 
B) Other Accounts column and Accounts Payable column 
C) Merchandise Inventory column and Accounts Payable column 
D) Other Accounts column and Cash column

Question 16

Which of the following is true of a sales journal?

Accepted Answer

A) It is a special journal used to record all the cash sales. 
B) It is used to record the sales of capital assets, such as buildings. 
C) It is a special journal used to record credit sales. 
D) It is a general journal that is used to record the adjustments in revenue account. 
A) It is a special journal used to record all the cash sales. 
B) It is used to record the sales of capital assets, such as buildings. 
C) It is a special journal used to record credit sales. 
D) It is a general journal that is used to record the adjustments in revenue account.

Question 17

Which of the following is a disadvantage of an enterprise resource planning (ERP)system?

Accepted Answer

A) It is not beneficial to large corporations. 
B) It is not supported by cloud computing. 
C) Its implementation requires a large commitment of time and people. 
D) It uses separate software systems, such as sales and payroll. 
A) It is not beneficial to large corporations. 
B) It is not supported by cloud computing. 
C) Its implementation requires a large commitment of time and people. 
D) It uses separate software systems, such as sales and payroll.

Question 18

In cloud computing, the software and data are stored on the company's server instead of the third-party server.

Accepted Answer

A) True 
 B)False

Question 19

When a sales journal is posted to the general ledger at the end of the month, the accountant totals the Accounts Receivable DR, Sales Revenue CR and Cost of Goods Sold DR, Merchandise Inventory CR columns. This process is commonly called:

Accepted Answer

A) scalping. 
B) ticking. 
C) footing. 
D) framing. 
A) scalping. 
B) ticking. 
C) footing. 
D) framing.

Question 20

Which of the following transactions is recorded in the "Receive Payments" function of QuickBooks?

Accepted Answer

A) Paying electricity bill 
B) Sold merchandise inventory on account to a customer 
C) Sold a product to a customer for cash 
D) Coupon payments to the bondholders 
A) Paying electricity bill 
B) Sold merchandise inventory on account to a customer 
C) Sold a product to a customer for cash 
D) Coupon payments to the bondholders

Exam 7: Accounting Information Systems

In an accounting information system, source documents are the documents which:

In a computerized accounting information system, the business does not have to record the transaction in debit and credit format.

Generally, all transactions are recorded in a special journal as well as the general journal.

Mercury Corporation receives a landscaping bill on January 15 and is required to pay it before February 15. In which of the following functions of QuickBooks will this transaction be recorded on the date of receipt of the bill?

In a perpetual inventory system, when cash sales are recorded:

One of the advantages of a computerized accounting information system, as compared to a manual one, is that it does not cost to ensure that the firm's data and information are secure.

An enterprise resource planning (ERP)system is a:

Entries from the purchases journal are posted monthly to the accounts payable subsidiary ledger and daily to the general ledger.

A CR.5 posting reference in a subsidiary ledger indicates that:

Which of the following is a benefit of using a computerized accounting information system?

Which of the following transactions will be recorded in the purchases journal?

Which of the following transactions is recorded in the "Enter Bills" function of QuickBooks?

One of the main disadvantages of a typical ERP system is that it cannot be offered through cloud computing.

Which of the following activities is handled in the Money In section of QuickBooks?

With a perpetual inventory system, which of the following are the credit columns of a typical cash payments journal?

Which of the following is true of a sales journal?

Which of the following is a disadvantage of an enterprise resource planning (ERP)system?

In cloud computing, the software and data are stored on the company's server instead of the third-party server.

When a sales journal is posted to the general ledger at the end of the month, the accountant totals the Accounts Receivable DR, Sales Revenue CR and Cost of Goods Sold DR, Merchandise Inventory CR columns. This process is commonly called:

Which of the following transactions is recorded in the "Receive Payments" function of QuickBooks?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters