Question 1

Accounting information systems are so accurate that decision makers in practice do not need a basic knowledge of how the systems work.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following does not apply to enterprise resource planning (ERP) software:

Accepted Answer

A)  ERP refers to programs that help manage a company's vital operations. 
B)  ERP can include programs that extend from order taking to manufacturing to accounting. 
C)  ERP can speed up business decision making and help reduce costs. 
D)  ERP can not be used to share data with customers and suppliers. 
E)  ERP can be designed to link every part of a company's operations. 
A)  ERP refers to programs that help manage a company's vital operations. 
B)  ERP can include programs that extend from order taking to manufacturing to accounting. 
C)  ERP can speed up business decision making and help reduce costs. 
D)  ERP can not be used to share data with customers and suppliers. 
E)  ERP can be designed to link every part of a company's operations.

Question 3

What is purpose of footing and crossfooting the column totals in special journals
To foot a column of numbers is to add it.

Accepted Answer

To crossfoot is to add all Deb

Question 4

The Woodview Company uses a sales journal, purchases journal, cash receipts journal, cash disbursements journal, and general journal. They use the perpetual method. The following transactions occurred during the current month of December:
Record the above transactions into the appropriate journals shown below.

Accepted Answer

The answer of The Woodview Company uses a sales journal,...

Question 5

When the sales journal's column for accounts receivable and sales is totaled at the end of the month, its total is:

Accepted Answer

A)  Debited to Sales and credited to Accounts Receivable. 
B)  Debited to Accounts Receivable and credited to Cash. 
C)  Debited to Cash and credited to Accounts Receivable. 
D)  Debited to Accounts Receivable and credited to Sales. 
E)  Debited to Cash and credited to Sales. 
A)  Debited to Sales and credited to Accounts Receivable. 
B)  Debited to Accounts Receivable and credited to Cash. 
C)  Debited to Cash and credited to Accounts Receivable. 
D)  Debited to Accounts Receivable and credited to Sales. 
E)  Debited to Cash and credited to Sales.

Question 6

A company using the periodic inventory system does not record the increase in cost of goods sold and decrease in inventory at the time of each sale in the sales journal.

Accepted Answer

A) True 
 B)False

Question 7

The accounting principle that prescribes an accounting information system conform with a company's activities, personnel, and structure is the:

Accepted Answer

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

Question 8

The cost-benefit principle prescribes that the benefits from an activity in an accounting information system outweigh the costs of that activity.

Accepted Answer

A) True 
 B)False

Question 9

Three transactions that would be recorded in the sales journal are: (1) recording sales taxes (2) recording sales returns and allowances and (3) recording purchases discounts.

Accepted Answer

A) True 
 B)False

Question 10

Off-the-shelf accounting software is not adequate to meet the needs of small businesses.

Accepted Answer

A) True 
 B)False

Question 11

Internal controls include policies to direct operations toward common goals, procedures to ensure reliable financial reports, safeguards to protect company assets and methods to achieve compliance with laws and regulations.

Accepted Answer

A) True 
 B)False

Question 12

Segment return on assets is segment operating income divided by segment average assets.

Accepted Answer

A) True 
 B)False

Question 13

Assume that a company using a purchases journal made an error in totaling the journal's accounts payable column. The error should be discovered:

Accepted Answer

A)  When the purchases journal is posted to the general ledger. 
B)  When the sum of the vendor accounts does not equal the balance in the Purchases journal. 
C)  When the total of the schedule of accounts payable is compared with the balance of the Accounts Payable account. 
D)  When the creditors receive their payments. 
E)  When the financial statements are prepared. 
A)  When the purchases journal is posted to the general ledger. 
B)  When the sum of the vendor accounts does not equal the balance in the Purchases journal. 
C)  When the total of the schedule of accounts payable is compared with the balance of the Accounts Payable account. 
D)  When the creditors receive their payments. 
E)  When the financial statements are prepared.

Question 14

The following information is available for Bosc, Inc. (all amounts are in millions):
a. Determine the segment return on assets for each geographic segment.
b. Comment on the results. How do the segments compare with respect to profitability?

Accepted Answer

a. N. America = 2,320/6,590 = 35.2%
S. A

Question 15

Discuss the differences in the special journals between a company using a perpetual inventory system and one using a periodic inventory system.

Accepted Answer

Under the perpetual inventory system, th

Question 16

With on-line systems, all information storage should be off-line to protect the data.

Accepted Answer

A) True 
 B)False

Question 17

The purchases journal is used to record cash purchases of merchandise.

Accepted Answer

A) True 
 B)False

Question 18

The Woodview Company uses a sales journal, purchases journal, cash receipts journal, cash disbursements journal, and general journal. They use the periodic inventory method. The following transactions occurred during the month of December:
Record these transactions using the journals below.

Accepted Answer

The answer of The Woodview Company uses a sales journal,...

Question 19

The difference in the sales journal between the perpetual and periodic inventory systems is a column to record ___________________________ and __________________ for each sale. This column is used in the perpetual system but not in the periodic.

Accepted Answer

Cost of goods sold,

Question 20

A subsidiary ledger:

Accepted Answer

A)  Includes transactions not covered by special journals. 
B)  Is a listing of all of the accounts of a business. 
C)  Is a listing of individual accounts and amounts with a common characteristic. 
D)  Is also called a general ledger. 
E)  Is also called a special journal. 
A)  Includes transactions not covered by special journals. 
B)  Is a listing of all of the accounts of a business. 
C)  Is a listing of individual accounts and amounts with a common characteristic. 
D)  Is also called a general ledger. 
E)  Is also called a special journal.

Exam 7: Accounting Information Systems

Accounting information systems are so accurate that decision makers in practice do not need a basic knowledge of how the systems work.

Which of the following does not apply to enterprise resource planning (ERP) software:

What is purpose of footing and crossfooting the column totals in special journals To foot a column of numbers is to add it.

When the sales journal's column for accounts receivable and sales is totaled at the end of the month, its total is:

A company using the periodic inventory system does not record the increase in cost of goods sold and decrease in inventory at the time of each sale in the sales journal.

The accounting principle that prescribes an accounting information system conform with a company's activities, personnel, and structure is the:

The cost-benefit principle prescribes that the benefits from an activity in an accounting information system outweigh the costs of that activity.

Three transactions that would be recorded in the sales journal are: (1) recording sales taxes (2) recording sales returns and allowances and (3) recording purchases discounts.

Off-the-shelf accounting software is not adequate to meet the needs of small businesses.

Internal controls include policies to direct operations toward common goals, procedures to ensure reliable financial reports, safeguards to protect company assets and methods to achieve compliance with laws and regulations.

Segment return on assets is segment operating income divided by segment average assets.

Assume that a company using a purchases journal made an error in totaling the journal's accounts payable column. The error should be discovered:

The following information is available for Bosc, Inc. (all amounts are in millions): a. Determine the segment return on assets for each geographic segment. b. Comment on the results. How do the segments compare with respect to profitability?

Discuss the differences in the special journals between a company using a perpetual inventory system and one using a periodic inventory system.

With on-line systems, all information storage should be off-line to protect the data.

The purchases journal is used to record cash purchases of merchandise.

The Woodview Company uses a sales journal, purchases journal, cash receipts journal, cash disbursements journal, and general journal. They use the periodic inventory method. The following transactions occurred during the month of December: Record these transactions using the journals below.

The difference in the sales journal between the perpetual and periodic inventory systems is a column to record ___________________________ and __________________ for each sale. This column is used in the perpetual system but not in the periodic.

A subsidiary ledger:

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

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters

The difference in the sales journal between the perpetual and periodic inventory systems is a column to record _________ and for each sale. This column is used in the perpetual system but not in the periodic.