Question 1

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 2

State the purpose of a subsidiary ledger. What is included in the accounts receivable subsidiary ledger?

Accepted Answer

A subsidiary ledger is a record of accou

Question 3

After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in the general ledger should equal the sum of the individual customer balances in the accounts receivable subsidiary ledger.

Accepted Answer

A) True 
 B)False

Question 4

Copper Corporation had the following transactions:
 $$\begin{array} { | l | l | } 
\hline \text { Mar. } 3 & \begin{array} { l } 
\text { Sold merchandise inventory on account to L. Navarro, issuing invoice no. } 501 \text { for } \$ 1,100 \
( \text { cost, } \$ 890 ) .
\end{array} \
\hline 22 & \text { Purchased merchandise inventory on credit terms of } 3 / 10 , n / 30 \text { from Circus Co., } \$ 800 . \
\hline 27 & \text { Returned damaged merchandise inventory to Circus Co., issuing a debit memo for } \$ 800 . \
31 & \text { Recorded March depreciation of } \$ 2,400 . \
\hline
\end{array}$$ 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& \[\begin{array} { l l

Question 5

In a manual accounting information system, cash purchases are generally recorded in the ________.

Accepted Answer

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

Question 6

When using a computerized accounting information system, transactions do not need to be recorded in a debit and credit format.

Accepted Answer

A) True 
 B)False

Question 7

California Corporation 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 8

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

Question 9

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 10

Which of the following is an example of hardware?

Accepted Answer

A)  monitor 
B)  malware 
C)  firewall 
D)  operating system 
A)  monitor 
B)  malware 
C)  firewall 
D)  operating system

Question 11

An accounting information system creates the structure to encourage adherence to management policies.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an advantage of enterprise resource planning (ERP) systems?

Accepted Answer

A)  It is inexpensive to implement. 
B)  It provides financial benefits only to small corporations. 
C)  It replaces separate software systems, such as sales and payroll. 
D)  Its implementation requires a small commitment of time and people. 
A)  It is inexpensive to implement. 
B)  It provides financial benefits only to small corporations. 
C)  It replaces separate software systems, such as sales and payroll. 
D)  Its implementation requires a small commitment of time and people.

Question 13

In a networked system, the server stores the program and the data.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true of outputs in an accounting information system?

Accepted Answer

A)  In a manual system, reports and financial statements can be created using Word documents, Excel spreadsheets, or PowerPoint. 
B)  In a computerized system, the software can generate reports instantaneously that cannot be formatted. 
C)  Examples of outputs in an accounting information system include purchase invoices, bank checks, and sales invoices. 
D)  Since the output in an accounting information system is audited and error-free, it provides the evidence and data for accounting transactions. 
A)  In a manual system, reports and financial statements can be created using Word documents, Excel spreadsheets, or PowerPoint. 
B)  In a computerized system, the software can generate reports instantaneously that cannot be formatted. 
C)  Examples of outputs in an accounting information system include purchase invoices, bank checks, and sales invoices. 
D)  Since the output in an accounting information system is audited and error-free, it provides the evidence and data for accounting transactions.

Question 15

Which of the following is an example of a source document in a computerized accounting information system?

Accepted Answer

A)  statement of cash flows 
B)  balance sheet 
C)  bank checks 
D)  general ledger 
A)  statement of cash flows 
B)  balance sheet 
C)  bank checks 
D)  general ledger

Question 16

The purchase of three computers for the sales staff, on account, is recorded in the ________ journal.

Accepted Answer

A)  general 
B)  purchases 
C)  cash payments 
D)  equipment 
A)  general 
B)  purchases 
C)  cash payments 
D)  equipment

Question 17

The Accounts Receivable balance in the general ledger may or may not equal the sum of the accounts in the accounts receivable subsidiary ledger.

Accepted Answer

A) True 
 B)False

Question 18

In a computerized accounting information system, all data are contained in paper documents that are often stored in filing cabinets and off-site document warehouses.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT included in the purchases journal?

Accepted Answer

A)  purchases of merchandise inventory for cash 
B)  purchase of merchandise inventory on account 
C)  purchase of office supplies on credit 
D)  purchase of equipment on account 
A)  purchases of merchandise inventory for cash 
B)  purchase of merchandise inventory on account 
C)  purchase of office supplies on credit 
D)  purchase of equipment on account

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 27: Understanding Accounting Information Systems and their Components

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

State the purpose of a subsidiary ledger. What is included in the accounts receivable subsidiary ledger?

After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in the general ledger should equal the sum of the individual customer balances in the accounts receivable subsidiary ledger.

In a manual accounting information system, cash purchases are generally recorded in the ________.

When using a computerized accounting information system, transactions do not need to be recorded in a debit and credit format.

California Corporation 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 ________.

An enterprise resource planning (ERP) is a ________.

An effective accounting information system that provides relevant information ________.

Which of the following is an example of hardware?

An accounting information system creates the structure to encourage adherence to management policies.

Which of the following is an advantage of enterprise resource planning (ERP) systems?

In a networked system, the server stores the program and the data.

Which of the following is true of outputs in an accounting information system?

Which of the following is an example of a source document in a computerized accounting information system?

The purchase of three computers for the sales staff, on account, is recorded in the ________ journal.

The Accounts Receivable balance in the general ledger may or may not equal the sum of the accounts in the accounts receivable subsidiary ledger.

In a computerized accounting information system, all data are contained in paper documents that are often stored in filing cabinets and off-site document warehouses.

Which of the following is NOT included in the purchases journal?

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

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