Question 1

Which of the following is true of an accounts receivable subsidiary ledger?

Accepted Answer

A) It does not include a receivable account for each customer, but includes a cumulative account for all customers. 
B) It contains information about the amount each customer purchased on credit, but excludes the customer name. 
C) The total of the accounts in the accounts receivable subsidiary ledger must equal the accounts receivable balance in the general ledger. 
D) Companies keep an accounts payable subsidiary ledger that is entirely different than the accounts receivable subsidiary ledger. 
A) It does not include a receivable account for each customer, but includes a cumulative account for all customers. 
B) It contains information about the amount each customer purchased on credit, but excludes the customer name. 
C) The total of the accounts in the accounts receivable subsidiary ledger must equal the accounts receivable balance in the general ledger. 
D) Companies keep an accounts payable subsidiary ledger that is entirely different than the accounts receivable subsidiary ledger.

Question 2

Which of the following is true of a network?

Accepted Answer

A) It connects a computer's hardware to the software. 
B) It does not link computers. 
C) It is the same as software. 
D) It allows different computers to share the same information. 
A) It connects a computer's hardware to the software. 
B) It does not link computers. 
C) It is the same as software. 
D) It allows different computers to share the same information.

Question 3

While recording a transaction in the cash receipts journal, the Other Accounts CR column is used when a transaction involves a credit entry that is not listed in the headings (columns)of the cash receipts journal.

Accepted Answer

A) True 
 B)False

Question 4

An accounting information system (AIS)collects, records, stores, and processes accounting data to produce information that is useful for decision makers.

Accepted Answer

A) True 
 B)False

Question 5

A source document provides the evidence and data for accounting transactions.

Accepted Answer

A) True 
 B)False

Question 6

The accounts payable subsidiary ledger lists each vendor along with amounts paid to the vendors and the remaining amounts owed to them.

Accepted Answer

A) True 
 B)False

Question 7

A subsidiary ledger is:

Accepted Answer

A) an accounting journal designed to record a specific type of transaction. 
B) a created list of the accounts used by a business entity to define each class of items for which cash is spent or received. 
C) a complete record of business transactions recorded in a ledger over the life of a company. 
D) a record of accounts that provide supporting details on individual balances, the total of which appears in a general ledger account. 
A) an accounting journal designed to record a specific type of transaction. 
B) a created list of the accounts used by a business entity to define each class of items for which cash is spent or received. 
C) a complete record of business transactions recorded in a ledger over the life of a company. 
D) a record of accounts that provide supporting details on individual balances, the total of which appears in a general ledger account.

Question 8

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

Accepted Answer

A) It is inexpensive to implement. 
B) It does not provide financial benefits to both small and large corporations. 
C) It replaces separate software systems, such as sales and payroll. 
D) Its implementation requires a little commitment of time and people. 
A) It is inexpensive to implement. 
B) It does not provide financial benefits to both small and large corporations. 
C) It replaces separate software systems, such as sales and payroll. 
D) Its implementation requires a little commitment of time and people.

Question 9

Which of the following is true of a purchases journal?

Accepted Answer

A) In a purchase journal, the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR for a periodic inventory system. 
B) Cash purchases are recorded in the purchases journal. 
C) A purchases journal is not used for a perpetual inventory system. 
D) In a purchases journal, the Other Accounts DR columns are used for purchases on account of items other than merchandise inventory and office supplies. 
A) In a purchase journal, the Merchandise Inventory DR column would be replaced with a column titled Cost of Goods Sold DR for a periodic inventory system. 
B) Cash purchases are recorded in the purchases journal. 
C) A purchases journal is not used for a perpetual inventory system. 
D) In a purchases journal, the Other Accounts DR columns are used for purchases on account of items other than merchandise inventory and office supplies.

Question 10

The Accounts Receivable balance in the general ledger may or may not equal the sum of the accounts in the accounts receivable subsidiary ledger.

Accepted Answer

A) True 
 B)False

Question 11

In a purchases journal, the total of the ________ column is not posted to the general ledger.

Accepted Answer

A) Merchandise Inventory DR 
B) Other Accounts DR, Amount 
C) Accounts Payable CR 
D) Office Supplies DR 
A) Merchandise Inventory DR 
B) Other Accounts DR, Amount 
C) Accounts Payable CR 
D) Office Supplies DR

Question 12

In a manual accounting information system, reports and financial statements must be created using Word documents, Excel spreadsheets, or PowerPoint.

Accepted Answer

A) True 
 B)False

Question 13

A business must only invest in an accounting information system in which the benefits received outweigh the cost of the system.

Accepted Answer

A) True 
 B)False

Question 14

Deal Corporation sells a product for $500 on account to Liza. This transaction will be recorded in the:

Accepted Answer

A) cash payments journal. 
B) sales journal. 
C) cash receipts journal. 
D) purchase journal. 
A) cash payments journal. 
B) sales journal. 
C) cash receipts journal. 
D) purchase journal.

Question 15

The collection of time records is an Accounting Information System activity that is classified as a business transaction that involves the sale of merchandise inventory.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following accounting information system activities is completed when merchandise inventory is sold?

Accepted Answer

A) preparation and payment of payroll 
B) processing of sales invoice 
C) receipt of goods or services 
D) payment for goods or services 
A) preparation and payment of payroll 
B) processing of sales invoice 
C) receipt of goods or services 
D) payment for goods or services

Question 17

Cash receipts journal is a special journal used to record business transactions of all cash receipts and credit sales.

Accepted Answer

A) True 
 B)False

Question 18

Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger.

Accepted Answer

A) True 
 B)False

Question 19

Hexa Corporation sold a product on credit for $2,235 to Merin. The cost of goods sold was $1,324. Assuming that the firm is following a perpetual inventory system and using a sales journal, it will record $2,235 in the:

Accepted Answer

A) Accounts Receivable CR, Sales Revenue DR column. 
B) Cost of Goods Sold DR, Merchandise Inventory CR column. 
C) Merchandise Inventory DR, Cost of Goods Sold CR column. 
D) Accounts Receivable DR, Sales Revenue CR column. 
A) Accounts Receivable CR, Sales Revenue DR column. 
B) Cost of Goods Sold DR, Merchandise Inventory CR column. 
C) Merchandise Inventory DR, Cost of Goods Sold CR column. 
D) Accounts Receivable DR, Sales Revenue CR column.

Question 20

If there is cash involved in a particular business transaction then the transaction should be recorded in either:

Accepted Answer

A) cash payments journal or cash receipts journal. 
B) cash payments journal or general journal. 
C) cash payments journal or cash receipts journal and in general journal. 
D) sales journal or purchases journal. 
A) cash payments journal or cash receipts journal. 
B) cash payments journal or general journal. 
C) cash payments journal or cash receipts journal and in general journal. 
D) sales journal or purchases journal.

Exam 7: Accounting Information Systems

Which of the following is true of an accounts receivable subsidiary ledger?

Which of the following is true of a network?

While recording a transaction in the cash receipts journal, the Other Accounts CR column is used when a transaction involves a credit entry that is not listed in the headings (columns)of the cash receipts journal.

An accounting information system (AIS)collects, records, stores, and processes accounting data to produce information that is useful for decision makers.

A source document provides the evidence and data for accounting transactions.

The accounts payable subsidiary ledger lists each vendor along with amounts paid to the vendors and the remaining amounts owed to them.

A subsidiary ledger is:

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

Which of the following is true of a purchases journal?

The Accounts Receivable balance in the general ledger may or may not equal the sum of the accounts in the accounts receivable subsidiary ledger.

In a purchases journal, the total of the ________ column is not posted to the general ledger.

In a manual accounting information system, reports and financial statements must be created using Word documents, Excel spreadsheets, or PowerPoint.

A business must only invest in an accounting information system in which the benefits received outweigh the cost of the system.

Deal Corporation sells a product for $500 on account to Liza. This transaction will be recorded in the:

The collection of time records is an Accounting Information System activity that is classified as a business transaction that involves the sale of merchandise inventory.

Which of the following accounting information system activities is completed when merchandise inventory is sold?

Cash receipts journal is a special journal used to record business transactions of all cash receipts and credit sales.

Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger.

Hexa Corporation sold a product on credit for $2,235 to Merin. The cost of goods sold was $1,324. Assuming that the firm is following a perpetual inventory system and using a sales journal, it will record $2,235 in the:

If there is cash involved in a particular business transaction then the transaction should be recorded in either:

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

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