Question 1

Credit sales of assets other than merchandise inventory occur infrequently and are recorded in the ________.

Accepted Answer

A)  sales journal 
B)  cash receipts journal 
C)  accounts receivable journal 
D)  general journal 
A)  sales journal 
B)  cash receipts journal 
C)  accounts receivable journal 
D)  general journal

Question 2

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 from 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 from the accounts receivable subsidiary ledger.

Question 3

California Company sold a product for $7,150 to Alliance Enterprises on credit.The cost of goods sold is $5,650.Assuming the firm is following a perpetual inventory system and using a sales journal,it will record $5,650 in the ________.

Accepted Answer

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

Question 4

To safeguard a business's assets and reduce the likelihood of fraud and errors,its accounting information system ________.

Accepted Answer

A)  should be manual 
B)  must be flexible to accommodate changes in a business over time 
C)  should work smoothly with the business's employees 
D)  must provide adequate controls of a business's assets and data 
A)  should be manual 
B)  must be flexible to accommodate changes in a business over time 
C)  should work smoothly with the business's employees 
D)  must provide adequate controls of a business's assets and data

Question 5

Adjusting entries are recorded in the ________.

Accepted Answer

A)  cash payments journal 
B)  purchases journal 
C)  cash receipts journal 
D)  general journal 
A)  cash payments journal 
B)  purchases journal 
C)  cash receipts journal 
D)  general journal

Question 6

A subsidiary ledger is a record of accounts that provides supporting details on individual balances,the total of which appears in a general ledger account.

Accepted Answer

A) True 
 B)False

Question 7

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 8

The cash receipts journal is a special journal used to record business transactions involving cash receipts and credit sales.

Accepted Answer

A) True 
 B)False

Question 9

The accounts payable subsidiary ledger ________.

Accepted Answer

A)  does not indicate the amount owed to each vendor 
B)  shows only a single total for the amount owed on account 
C)  lists vendors in alphabetical order, along with amounts paid to the vendors and the remaining amounts owed to them 
D)  has a format that is entirely different from an accounts receivable subsidiary ledger 
A)  does not indicate the amount owed to each vendor 
B)  shows only a single total for the amount owed on account 
C)  lists vendors in alphabetical order, along with amounts paid to the vendors and the remaining amounts owed to them 
D)  has a format that is entirely different from an accounts receivable subsidiary ledger

Question 10

When using a purchases journal,Accounts Payable is always credited.

Accepted Answer

A) True 
 B)False

Question 11

An automobile parts retailer purchases merchandise inventory for cash.When using a manual accounting information system,this transaction is recorded in the ________.

Accepted Answer

A)  purchases journal 
B)  general journal 
C)  cash payments journal 
D)  sales journal 
A)  purchases journal 
B)  general journal 
C)  cash payments journal 
D)  sales journal

Question 12

Because companies use special journals,the use of the General Journal is optional.

Accepted Answer

A) True 
 B)False

Question 13

What are the two basic components of a computerized accounting information system?

Accepted Answer

A)  sales journal and purchase journal 
B)  hardware and software 
C)  cash payments journal and cash receipts journal 
D)  network and cloud computing 
A)  sales journal and purchase journal 
B)  hardware and software 
C)  cash payments journal and cash receipts journal 
D)  network and cloud computing

Question 14

Copper Company had the following transactions:
 $$\begin{array} { | l | l | } 
\hline \text { Mar. } 3 & \begin{array} { l } 
\text { Sold merchandise inventory on account to } L \text {. Navarro, issuing invoice } \
\text { no. } 501 \text { for } \$ 1,100 \text { (cost, } \$ 890 ) \text {. }
\end{array} \
\hline 22 & \begin{array} { l } 
\text { Purchased merchandise inventory on credit terms of } 3 / 10 , n / 30 \text { from } \
\text { Circus Co., } \$ 800 .
\end{array} \
\hline 27 & \begin{array} { l } 
\text { Returned damaged merchandise inventory to Circus Co., issuing a debit } \
\text { memo for } \$ 800 .
\end{array} \
\hline 31 & \text { Recorded March depreciation of } \$ 2,400 . \
\hline
\end{array}$$ Journalize the above transactions that should be recorded in the general journal.If a transaction should not be recorded in the general journal,identify the special journal that should be used.Assume the company uses the perpetual inventory system.

Accepted Answer

General Journal
 @#IMG-DLM& @#LAT-DLM& \[\begin{array} { l l

Question 15

If there is cash involved in a business transaction,the transaction should be recorded in either the ________.

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

Question 16

The Other Accounts DR columns of a purchases journal are used for recording merchandise inventory and office supplies.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A)  preparation and payment of payroll 
B)  receipt of customer payment 
C)  receipt of goods or services 
D)  payment for goods or services 
A)  preparation and payment of payroll 
B)  receipt of customer payment 
C)  receipt of goods or services 
D)  payment for goods or services

Question 18

An accounting information system has three basic components: source documents and input devices,processing and storage,and internal controls.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is NOT an example of a storage device in an accounting information system?

Accepted Answer

A)  computer 
B)  financial statements 
C)  filing cabinet 
D)  server 
A)  computer 
B)  financial statements 
C)  filing cabinet 
D)  server

Exam 7: Accounting Information Systems

Credit sales of assets other than merchandise inventory occur infrequently and are recorded in the ________.

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

California Company sold a product for $7,150 to Alliance Enterprises on credit.The cost of goods sold is $5,650.Assuming the firm is following a perpetual inventory system and using a sales journal,it will record $5,650 in the ________.

To safeguard a business's assets and reduce the likelihood of fraud and errors,its accounting information system ________.

Adjusting entries are recorded in the ________.

A subsidiary ledger is a record of accounts that provides supporting details on individual balances,the total of which appears in a general ledger account.

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

The cash receipts journal is a special journal used to record business transactions involving cash receipts and credit sales.

The accounts payable subsidiary ledger ________.

When using a purchases journal,Accounts Payable is always credited.

An automobile parts retailer purchases merchandise inventory for cash.When using a manual accounting information system,this transaction is recorded in the ________.

Because companies use special journals,the use of the General Journal is optional.

What are the two basic components of a computerized accounting information system?

If there is cash involved in a business transaction,the transaction should be recorded in either the ________.

The Other Accounts DR columns of a purchases journal are used for recording merchandise inventory and office supplies.

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

An accounting information system has three basic components: source documents and input devices,processing and storage,and internal controls.

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

Which of the following is NOT an example of a storage device in an accounting information system?

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