Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following activities is handled by selecting the "Make payment" action of QuickBooks?

Accepted Answer

A)  entering sales receipts 
B)  selecting bills to be paid 
C)  recording a bill that has been received 
D)  recording customer payments 
A)  entering sales receipts 
B)  selecting bills to be paid 
C)  recording a bill that has been received 
D)  recording customer payments

Question 3

The sale of merchandise inventory for cash is recorded in the ________.

Accepted Answer

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

Question 4

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 5

A CR.5 posting reference in a subsidiary ledger signifies that the ________.

Accepted Answer

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

Question 6

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 7

A general ledger is an accounting journal designed to record one specific type of transaction.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

Which of the following is true of an effective accounting information system?

Accepted Answer

A)  It has little influence in improving a company's internal control activities. 
B)  The cost of using an accounting information system is the same for both small and large businesses. 
C)  A compatible accounting information system works smoothly with the business's employees and organizational structure. 
D)  Large private companies prefer a manual accounting information system since their financial statements are not audited. 
A)  It has little influence in improving a company's internal control activities. 
B)  The cost of using an accounting information system is the same for both small and large businesses. 
C)  A compatible accounting information system works smoothly with the business's employees and organizational structure. 
D)  Large private companies prefer a manual accounting information system since their financial statements are not audited.

Question 11

In a typical computerized accounting information system, ________.

Accepted Answer

A)  transactions must be recorded in debit and credit format 
B)  the software automatically knows to record a debit or a credit 
C)  transactions are posted manually 
D)  spreadsheets must be used to produce financial statements 
A)  transactions must be recorded in debit and credit format 
B)  the software automatically knows to record a debit or a credit 
C)  transactions are posted manually 
D)  spreadsheets must be used to produce financial statements

Question 12

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 13

An automobile parts retailer purchases merchandise inventory on account. 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 14

If there is no cash involved in a business transaction, the transaction should be recorded in ________.

Accepted Answer

A)  either the cash receipts journal or general journal 
B)  either the sales journal or purchases journal 
C)  the general journal only 
D)  sales journal, purchases journal, or general journal 
A)  either the cash receipts journal or general journal 
B)  either the sales journal or purchases journal 
C)  the general journal only 
D)  sales journal, purchases journal, or general journal

Question 15

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 16

The collection of time records for company employees is an accounting information system activity that is classified as a business transaction involving the sale of merchandise inventory.

Accepted Answer

A) True 
 B)False

Question 17

Enterprise resource planning systems are software systems that can integrate all of a company's functions, departments, and data into a single system.

Accepted Answer

A) True 
 B)False

Question 18

Gold Corporation had the following transactions:
 $$\begin{array} { | l | l | } 
\hline \text { Jun. } 4 & \begin{array} { l } 
\text { Sold merchandise inventory on account to Sarah Pardee, } \$ 1,210 . \text { Cost of goods, } \$ 920 . \
\text { Invoice no. } 101 .
\end{array} \
\hline 10 & \begin{array} { l } 
\text { Sold merchandise inventory on account to Sean Lewis, } \$ 2,100 . \text { Cost of goods, } \$ 1,660 . \
\text { Invoice no. } 102 .
\end{array} \
\hline 12 & \begin{array} { l } 
\text { Sold merchandise inventory on account to Ellie Robins, } \$ 400 . \text { Cost of goods, } \$ 230 . \
\text { Invoice no. } 103 .
\end{array} \
\hline 26 & \begin{array} { l } 
\text { Sold merchandise inventory on account to Diana Rees, } \$ 870 . \text { Cost of goods, } \$ 630 . \
\text { Invoice no. } 104 .
\end{array} \
\hline
\end{array}$$ Use the following sales journal to record the preceding transactions. The company uses the perpetual inventory system.
 $$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Sales Journal } & & & && \text { Page 1 } \
\hline \text { Date } & \begin{array} { c } 
\text { Invoice } \
\text { No. }
\end{array} & \begin{array} { c } 
\text { Customer } \
\text { Account } \
\text { Debited }
\end{array} & \begin{array} { c } 
\text { Post } \
\text { Ref. }
\end{array} & \begin{array} { c } 
\text { Accounts Receivable DR } \
\text { Sales Revenue CR }
\end{array} & \begin{array} { c } 
\text { Cost of Goods Sold DR } \
\text { Merchandise Inventory } \
\text { CR }
\end{array} \
\hline & & & & & \
\hline & & & & & \
\hline & & & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | r | r | l | l | r |

Question 19

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 20

Rockville Corporation makes a $1,200 purchase of merchandise inventory on account. This transaction will be recorded in the ________.

Accepted Answer

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

Exam 27: Understanding Accounting Information Systems and their Components

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

Which of the following activities is handled by selecting the "Make payment" action of QuickBooks?

The sale of merchandise inventory for cash is recorded in the ________.

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

A CR.5 posting reference in a subsidiary ledger signifies that the ________.

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

A general ledger is an accounting journal designed to record one specific type of transaction.

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

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

Which of the following is true of an effective accounting information system?

In a typical computerized accounting information system, ________.

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

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

If there is no cash involved in a business transaction, the transaction should be recorded in ________.

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

The collection of time records for company employees is an accounting information system activity that is classified as a business transaction involving the sale of merchandise inventory.

Enterprise resource planning systems are software systems that can integrate all of a company's functions, departments, and data into a single system.

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

Rockville Corporation makes a $1,200 purchase of merchandise inventory on account. This transaction will be recorded in the ________.

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

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Filters