Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Most small businesses have computerized all of their accounting.

Accepted Answer

A) True 
 B)False

Question 3

Entries in the cash payments journal are posted daily to the accounts payable subsidiary ledger and monthly to the general ledger.

Accepted Answer

A) True 
 B)False

Question 4

Australia Company sells a product for $500 cash to Martin and Lewis Enterprises.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 5

An accounting information system is said to have good flexibility,if it ________.

Accepted Answer

A)  works smoothly with the business's employees and organizational structure 
B)  safeguards a business's assets and reduces the likelihood of fraud and errors 
C)  provides information that will improve decision making and reduce uncertainty 
D)  accommodates changes in the business over time 
A)  works smoothly with the business's employees and organizational structure 
B)  safeguards a business's assets and reduces the likelihood of fraud and errors 
C)  provides information that will improve decision making and reduce uncertainty 
D)  accommodates changes in the business over time

Question 6

Which of the following is TRUE of a purchases journal?

Accepted Answer

A)  For a periodic inventory system, the Merchandise Inventory DR column is replaced with a column titled Cost of Goods Sold DR. 
B)  Cash purchases are recorded in the purchases journal. 
C)  For a perpetual inventory system, a column titled Purchases DR is needed. 
D)  The Other Accounts DR column is used for purchases on account of items other than merchandise inventory and office supplies. 
A)  For a periodic inventory system, the Merchandise Inventory DR column is replaced with a column titled Cost of Goods Sold DR. 
B)  Cash purchases are recorded in the purchases journal. 
C)  For a perpetual inventory system, a column titled Purchases DR is needed. 
D)  The Other Accounts DR column is used for purchases on account of items other than merchandise inventory and office supplies.

Question 7

A company has four vendors and the accounts payable subsidiary ledger shows the following balances. $$\begin{array} { | l | r | } 
\hline \text { Alpha } & \$ 278,821 \
\hline \text { Beta } & 150,474 \
\hline \text { Gamma } & 91,943 \
\hline \text { Delta } & 41,187 \
\hline
\end{array}$$ Calculate the accounts payable balance in the general ledger.

Accepted Answer

A)  $429,295 
B)  $562,425 
C)  $278,821 
D)  $283,604 
A)  $429,295 
B)  $562,425 
C)  $278,821 
D)  $283,604

Question 8

Dakota Company has four customers: A,B,C,and D.The accounts receivable balance in the general ledger is $9,083 and the accounts receivable subsidiary ledger of customers A,C,and D have $1,746,$3,296,and $3,940,respectively.Calculate the amount in the accounts receivable subsidiary ledger account of customer B.

Accepted Answer

A)  $8,982 
B)  $1,847 
C)  $1,291 
D)  $101 
A)  $8,982 
B)  $1,847 
C)  $1,291 
D)  $101

Question 9

When using a computerized accounting information system,sales transactions are only recorded when the cash is received.

Accepted Answer

A) True 
 B)False

Question 10

A special journal is ________.

Accepted Answer

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

Question 11

On April 1,a hardware retailer purchases inventory on account for $1,800.Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.

Accepted Answer

A)  Merchandise Inventory decreases by $1,800 and Accounts Receivable decreases by $1,800. 
B)  Merchandise Inventory decreases by $1,800 and Accounts Receivable increases by $1,800. 
C)  Merchandise Inventory increases by $1,800 and Accounts Payable decreases by $1,800. 
D)  Merchandise Inventory increases by $1,800 and Accounts Payable increases by $1,800. 
A)  Merchandise Inventory decreases by $1,800 and Accounts Receivable decreases by $1,800. 
B)  Merchandise Inventory decreases by $1,800 and Accounts Receivable increases by $1,800. 
C)  Merchandise Inventory increases by $1,800 and Accounts Payable decreases by $1,800. 
D)  Merchandise Inventory increases by $1,800 and Accounts Payable increases by $1,800.

Question 12

On May 31,a retail firm pays rent of $2,400 for the month of May.When this transaction is recorded in the cash payments journal,________.

Accepted Answer

A)  assets and equity will increase by $2,400 
B)  assets and liabilities will decrease by $2,400 
C)  assets and equity will decrease by $2,400 
D)  liabilities and equity will increase by $2,400 
A)  assets and equity will increase by $2,400 
B)  assets and liabilities will decrease by $2,400 
C)  assets and equity will decrease by $2,400 
D)  liabilities and equity will increase by $2,400

Question 13

A control account ________.

Accepted Answer

A)  does not appear on the balance sheet 
B)  has a balance that equals the sum of the balances in a group of related accounts in a subsidiary ledger 
C)  is equivalent to a contra account and represents the offsetting nature of debits and credits on a firm's financial statements 
D)  holds individual accounts that support a general ledger account 
A)  does not appear on the balance sheet 
B)  has a balance that equals the sum of the balances in a group of related accounts in a subsidiary ledger 
C)  is equivalent to a contra account and represents the offsetting nature of debits and credits on a firm's financial statements 
D)  holds individual accounts that support a general ledger account

Question 14

Cash purchases are recorded in the purchases journal.

Accepted Answer

A) True 
 B)False

Question 15

List the four special journals that are often used in a manual accounting information system.State what types of transactions are recorded in each of these special journals.

Accepted Answer

1.Sales journal: used to record sales on

Question 16

An effective accounting information system that provides relevant information ________.

Accepted Answer

A)  increases the likelihood of fraud and errors 
B)  reduces the cost of employing an accounting information system 
C)  improves decision making and reduces uncertainty 
D)  improves the accuracy of data entry when manual 
A)  increases the likelihood of fraud and errors 
B)  reduces the cost of employing an accounting information system 
C)  improves decision making and reduces uncertainty 
D)  improves the accuracy of data entry when manual

Question 17

Which of the following is TRUE of the general journal?

Accepted Answer

A)  All transactions recorded in one of the special journals are also recorded in the general journal. 
B)  Manual accounting information systems do not need the general journal. 
C)  The adjusting entries and the closing entries are recorded in the general journal. 
D)  Non-routine transactions are generally not recorded in the general journal. 
A)  All transactions recorded in one of the special journals are also recorded in the general journal. 
B)  Manual accounting information systems do not need the general journal. 
C)  The adjusting entries and the closing entries are recorded in the general journal. 
D)  Non-routine transactions are generally not recorded in the general journal.

Question 18

An accounting information system is said to have good compatibility,if it ________.

Accepted Answer

A)  works smoothly with the business's employees and organizational structure 
B)  safeguards a business's assets and reduces the likelihood of fraud and errors 
C)  provides information that will improve decision making and reduce uncertainty 
D)  accommodates changes in the business over time 
A)  works smoothly with the business's employees and organizational structure 
B)  safeguards a business's assets and reduces the likelihood of fraud and errors 
C)  provides information that will improve decision making and reduce uncertainty 
D)  accommodates changes in the business over time

Question 19

Which of the following is TRUE of data processing and storage in a computerized information system?

Accepted Answer

A)  In a computerized accounting information system, processing includes manually journalizing transactions and posting to the accounts. 
B)  In a computerized accounting information system, there will be a main centralized computer where data is stored, which cannot be accessed from any other computers. 
C)  In both computerized and manual systems, all data are contained in paper documents and are often stored in filing cabinets and off-site document warehouses. 
D)  In a computerized accounting information system, companies are spending increasingly large amounts of cash to ensure that their data and information are secure. 
A)  In a computerized accounting information system, processing includes manually journalizing transactions and posting to the accounts. 
B)  In a computerized accounting information system, there will be a main centralized computer where data is stored, which cannot be accessed from any other computers. 
C)  In both computerized and manual systems, all data are contained in paper documents and are often stored in filing cabinets and off-site document warehouses. 
D)  In a computerized accounting information system, companies are spending increasingly large amounts of cash to ensure that their data and information are secure.

Question 20

An enterprise resource planning (ERP)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

Exam 7: Accounting Information Systems

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

Most small businesses have computerized all of their accounting.

Entries in the cash payments journal are posted daily to the accounts payable subsidiary ledger and monthly to the general ledger.

Australia Company sells a product for $500 cash to Martin and Lewis Enterprises.This transaction will be recorded in the ________.

An accounting information system is said to have good flexibility,if it ________.

Which of the following is TRUE of a purchases journal?

A company has four vendors and the accounts payable subsidiary ledger shows the following balances. Alpha \ 278,821 Beta 150,474 Gamma 91,943 Delta 41,187 Calculate the accounts payable balance in the general ledger.

When using a computerized accounting information system,sales transactions are only recorded when the cash is received.

A special journal is ________.

On April 1,a hardware retailer purchases inventory on account for $1,800.Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.

On May 31,a retail firm pays rent of $2,400 for the month of May.When this transaction is recorded in the cash payments journal,________.

A control account ________.

Cash purchases are recorded in the purchases journal.

List the four special journals that are often used in a manual accounting information system.State what types of transactions are recorded in each of these special journals.

An effective accounting information system that provides relevant information ________.

Which of the following is TRUE of the general journal?

An accounting information system is said to have good compatibility,if it ________.

Which of the following is TRUE of data processing and storage in a computerized information system?

An enterprise resource planning (ERP)is a ________.

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