Question 1

Which of the following is a benefit of using a computerized accounting information system?

Accepted Answer

A)  The software can accurately measure the intrinsic value of the firm using the built-in simulation techniques. 
B)  There is no need to review the financial statements for accuracy. 
C)  The software is easy to use and thus no training or financial statement review is necessary. 
D)  The software automatically transfers the amounts from the general ledger to the financial statements. 
A)  The software can accurately measure the intrinsic value of the firm using the built-in simulation techniques. 
B)  There is no need to review the financial statements for accuracy. 
C)  The software is easy to use and thus no training or financial statement review is necessary. 
D)  The software automatically transfers the amounts from the general ledger to the financial statements.

Question 2

Match the benefit of an effective accounting information system with the definition.
-Compatibility

Accepted Answer

A) Provides information that will improve decision making and reduce uncertainty. 
B) Benefits received outweigh the cost of the system. 
C) Works smoothly with the business's employees and organization structure. 
D) Can accommodate changes in the business over time. 
E) Provides safeguards for a business's assets and reduces the likelihood of fraud and errors. 
A) Provides information that will improve decision making and reduce uncertainty. 
B) Benefits received outweigh the cost of the system. 
C) Works smoothly with the business's employees and organization structure. 
D) Can accommodate changes in the business over time. 
E) Provides safeguards for a business's assets and reduces the likelihood of fraud and errors.

Question 3

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 4

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 o

Question 5

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 6

After posting from the cash payments journal, the posting reference is printed in the general journal.

Accepted Answer

A) True 
 B)False

Question 7

A company has four vendors and the accounts payable subsidiary ledger shows the following balances. $$\begin{array} { | l | r | } 
\hline \text { Alpha } & \$ 278,821 \
\hline \text { Beta } & 157,474 \
\hline \text { Gamma } & 83,943 \
\hline \text { Delta } & 44,187 \
\hline
\end{array}$$ Calculate the accounts payable balance in the general ledger.

Accepted Answer

A)  $436,295 
B)  $564,425 
C)  $278,821 
D)  $285,604 
A)  $436,295 
B)  $564,425 
C)  $278,821 
D)  $285,604

Question 8

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 9

Which of the following is a disadvantage of enterprise resource planning (ERP) systems?

Accepted Answer

A)  It is not beneficial to large corporations. 
B)  It is not supported by cloud computing. 
C)  Its implementation requires a large commitment of time and people. 
D)  It uses separate software systems, such as sales and payroll. 
A)  It is not beneficial to large corporations. 
B)  It is not supported by cloud computing. 
C)  Its implementation requires a large commitment of time and people. 
D)  It uses separate software systems, such as sales and payroll.

Question 10

Which of the following is true of a sales journal prepared under the perpetual inventory system?

Accepted Answer

A)  It includes a Cost of Goods Sold DR, Merchandise Inventory CR column. 
B)  It records both cash and credit sales transactions. 
C)  All transactions recorded in a sales journal also are entered in the general journal. 
D)  It cannot be used with a perpetual inventory system. 
A)  It includes a Cost of Goods Sold DR, Merchandise Inventory CR column. 
B)  It records both cash and credit sales transactions. 
C)  All transactions recorded in a sales journal also are entered in the general journal. 
D)  It cannot be used with a perpetual inventory system.

Question 11

A computerized system uses software to process transactions. Thus employees are no longer required to manually journalize and post transactions to the accounts.

Accepted Answer

A) True 
 B)False

Question 12

Sales on account are recorded in a cash receipts journal.

Accepted Answer

A) True 
 B)False

Question 13

On April 1, a hardware retailer purchases inventory on account for $1500. 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 $1500 and Accounts Receivable decreases by $1500. 
B)  Merchandise Inventory decreases by $1500 and Accounts Receivable increases by $1500. 
C)  Merchandise Inventory increases by $1500 and Accounts Payable decreases by $1500. 
D)  Merchandise Inventory increases by $1500 and Accounts Payable increases by $1500. 
A)  Merchandise Inventory decreases by $1500 and Accounts Receivable decreases by $1500. 
B)  Merchandise Inventory decreases by $1500 and Accounts Receivable increases by $1500. 
C)  Merchandise Inventory increases by $1500 and Accounts Payable decreases by $1500. 
D)  Merchandise Inventory increases by $1500 and Accounts Payable increases by $1500.

Question 14

Which of the following transactions is recorded by selecting the "Receive payment" action of QuickBooks?

Accepted Answer

A)  making electricity bill payments 
B)  selling merchandise inventory on account 
C)  collecting an account receivable from a customer 
D)  paying interest to bondholders 
A)  making electricity bill payments 
B)  selling merchandise inventory on account 
C)  collecting an account receivable from a customer 
D)  paying interest to bondholders

Question 15

Southeastern Corporation sold merchandise for $4,450 to Northern, Inc. on account. The cost of goods sold was $1,185. Southeastern Corporation uses a perpetual inventory system and special journals. The $4,450 is recorded as ________.

Accepted Answer

A)  an entry in the general journal 
B)  Accounts Receivable DR, Sales Revenue CR column of the sales journal 
C)  Merchandise Inventory DR column of the purchases journal 
D)  Accounts Receivable CR column of cash receipts journal 
A)  an entry in the general journal 
B)  Accounts Receivable DR, Sales Revenue CR column of the sales journal 
C)  Merchandise Inventory DR column of the purchases journal 
D)  Accounts Receivable CR column of cash receipts journal

Question 16

In an accounting information system, outputs are the reports used for decision making, which include the financial statements.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following will be recorded in the Other Accounts CR column of the cash receipts journal?

Accepted Answer

A)  cash sales 
B)  receipt of interest revenue 
C)  receipt of accounts receivable 
D)  sales discounts forfeited 
A)  cash sales 
B)  receipt of interest revenue 
C)  receipt of accounts receivable 
D)  sales discounts forfeited

Question 18

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 19

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 20

Match the benefit of an effective accounting information system with the definition.
-Control

Accepted Answer

A) Provides information that will improve decision making and reduce uncertainty. 
B) Benefits received outweigh the cost of the system. 
C) Works smoothly with the business's employees and organization structure. 
D) Can accommodate changes in the business over time. 
E) Provides safeguards for a business's assets and reduces the likelihood of fraud and errors. 
A) Provides information that will improve decision making and reduce uncertainty. 
B) Benefits received outweigh the cost of the system. 
C) Works smoothly with the business's employees and organization structure. 
D) Can accommodate changes in the business over time. 
E) Provides safeguards for a business's assets and reduces the likelihood of fraud and errors.

Exam 27: Understanding Accounting Information Systems and their Components

Which of the following is a benefit of using a computerized accounting information system?

Match the benefit of an effective accounting information system with the definition. -Compatibility

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

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.

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

After posting from the cash payments journal, the posting reference is printed in the general journal.

A company has four vendors and the accounts payable subsidiary ledger shows the following balances. Alpha \ 278,821 Beta 157,474 Gamma 83,943 Delta 44,187 Calculate the accounts payable balance in the general ledger.

A control account ________.

Which of the following is a disadvantage of enterprise resource planning (ERP) systems?

Which of the following is true of a sales journal prepared under the perpetual inventory system?

A computerized system uses software to process transactions. Thus employees are no longer required to manually journalize and post transactions to the accounts.

Sales on account are recorded in a cash receipts journal.

On April 1, a hardware retailer purchases inventory on account for $1500. Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.

Which of the following transactions is recorded by selecting the "Receive payment" action of QuickBooks?

Southeastern Corporation sold merchandise for $4,450 to Northern, Inc. on account. The cost of goods sold was $1,185. Southeastern Corporation uses a perpetual inventory system and special journals. The $4,450 is recorded as ________.

In an accounting information system, outputs are the reports used for decision making, which include the financial statements.

Which of the following will be recorded in the Other Accounts CR column of the cash receipts journal?

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

Which of the following is true of the general journal?

Match the benefit of an effective accounting information system with the definition. -Control

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