Question 1

Under the perpetual inventory system,special journals are not required.

Accepted Answer

A) True 
 B)False

Question 2

Williams Company began business on May 1.They use the perpetual inventory method.The following transactions involving purchases and cash disbursements occurred during the first week of May:
 \[\begin{array} { | l | l | l | } 
\hline \text { May } & 2 & \begin{array} { l } 
\text { Purchased } \$ 25,000 \text { of merchandise inventory on credit from the Sioux City }\
\text { Company, terms } 2 / 10, \mathrm{n} / 30 \text {. Invoice dated May } 1 \text {. }
\end{array} \
\hline \text { May } & 3 & \begin{array} { l } 
\text { Purchased } \$ 12,000 \text { of merchandise inventory on credit from the Wichita Company, } \
\text { terms } 2 / 10,\text{n} / 30 \text {. Invoice dated May } 2 \text {. }
\end{array} \
\hline \text { May } & 3 &\text { Purchased } \$ 3,000 \text { of office supplies for cash from Bettendorf Co. Check no. } 1267 .\
\hline \text { May } & 4 & \begin{array} { l } 
\text { Purchased } \$ 36,000 \text { of office equipment on credit from Office Outfitters, terms  n }/ 60 \text {. } \
\text { Invoice dated May } 3 .
\end{array} \
\hline \text { May } & 6 & \begin{array} { l } 
\text { Paid the arnount due for the merchandise purchased from Sioux City Cormpary. } \
\text { Check no. } 1268 .
\end{array} \
\hline \text { May } & 6 & \begin{array} { l } 
\text { Purchased } \$ 14,500 \text { of merchandise inventory for cash from the Davenport Co. } \
\text { Check no. } 1269 .
\end{array} \
\hline
\end{array}\] 
a.Use the purchases journal and the cash disbursements journal to record these transactions
b.Prepare a schedule of accounts payable as of May 7.There were no accounts payable on May 1.
 $$\begin{array}{l}
\text { Purchases Journal }\
\begin{array} { | l | l | l | l | l | l | l | l | l | } 
\hline \text { Date } & \text { Account } & \begin{array} { l } 
\text { Date of } \
\text { Invoice }
\end{array} & \text { Terms } & \text { PR } & \begin{array} { l } 
\text { Accounts } \
\text { Payable } \
\text { Cr. }
\end{array} & \begin{array} { l } 
\text { Inventory } \
\text { Dr. }
\end{array} & \begin{array} { l } 
\text { Office } \
\text { Supplies } \
\text { Dr. }
\end{array} & \begin{array} { l } 
\text { Other } \
\text { Accounts } \
\text { Dr }
\end{array} \
\hline & & & & & & & & \
\hline & & & & & & & & \
\hline & & & & & & & & \
\hline & & & & & & & & \
\hline & & & & & & & & \
\hline
\end{array}
\end{array}$$ 
 $$\begin{array}{l}
\text { Cash Disbursements Jaurnal }\
\begin{array} { | l | l | l | l | l | l | l | l | l | } 
\hline \text { Date } & \begin{array} { l } 
\text { Ck. } \
\text { No. }
\end{array} & \text { Payee } & \begin{array} { l } 
\text { Account } \
\text { Debited }
\end{array} & \text { PR } & \begin{array} { l } 
\text { Cash } \
\text { Cr. }
\end{array} & \begin{array} { l } 
\text { Inventory } \
\text { Cr. }
\end{array} & \begin{array} { l } 
\text { Other } \
\text { Accounts } \
\text { Dr. }
\end{array} & \begin{array} { l } 
\text { Accounts } \
\text { Payable } \
\text { Dr. }
\end{array} \
\hline & & & & & & & & \
\hline & & & & & & & & \
\hline & & & & & & & & \
\hline & & & & & & & & \
\hline
\end{array}
\end{array}$$

Accepted Answer

a.
 @#IMG-DLM&_TB6312_00_TB631

Question 3

Each transaction recorded in the sales journal yields a debit to Accounts Receivable and a credit to Sales.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

Accepted Answer

A) True 
 B)False

Question 6

The flexibility principle requires that an accounting information system conform to a company's activities,personnel,and structure and adapt to a company's unique characteristics.

Accepted Answer

A) True 
 B)False

Question 7

Match between columns
                        Premises:  A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
 A company that owns a more than 50% controlling interest in a subsidiary.
 A measure of operating efficiency, computed as net income divided by average total assets.
 Debt securities that a company intends and is able to hold until maturity.
 An accounting method for long-term investments in equity when the investor has significant influence over the investee.
 Debt and equity securities not classified as trading or held-to-maturity.
 Debt and equity securities that a company intends to actively manage and trade for profit.
 A change in market value that is not yet realized through an actual sale.
 Investments in equity and debt securities that are not readily convertible to cash or are not intended to be converted to cash in the short term.
 Financial statements that show the financial position, results of operations and cash flows of all entities under the parent's control, including those of any subsidiaries.

Accepted Answer

The Answer of Long-term investments and Subsidiary and Unrealized gain is...

Question 8

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

Accepted Answer

A)  When the purchases journal is posted to the general ledger. 
B)  When the trial balance is prepared. 
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 trial balance is prepared. 
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 9

A company returned merchandise to a supplier because it did not meet their specifications.This transaction would be recorded in which of the following journals?

Accepted Answer

A)  Sales journal 
B)  Purchases journal 
C)  Cash disbursements journal 
D)  Cash receipts journal 
E)  General journal 
A)  Sales journal 
B)  Purchases journal 
C)  Cash disbursements journal 
D)  Cash receipts journal 
E)  General journal

Question 10

The SAP enterprise resource planning software is already being used to help direct the operations of many of the world's largest companies.

Accepted Answer

A) True 
 B)False

Question 11

A company's Latin American segment had revenues of $2,089 million,operating income of $1,033 million,and average total assets of $1,443 million.The Latin American segment return on assets is:

Accepted Answer

A)  49.4% 
B)  69.0% 
C)  71.6% 
D)  139.7% 
E)  144.8% 
A)  49.4% 
B)  69.0% 
C)  71.6% 
D)  139.7% 
E)  144.8%

Question 12

The compatibility principle requires that an accounting system report useful,understandable,timely,and pertinent information for effective decision making.

Accepted Answer

A) True 
 B)False

Question 13

____________________ is the accounting system component that keeps data in a form accessible to information processors.

Accepted Answer

The answer of ____________________ is the accounting system component that...

Question 14

The Midwest segment of a company had a segment return on assets of 13%.If the revenues and operating income of this segment were $4 million and $1 million,respectively,what is the segment's average total assets amount?

Accepted Answer

A)  $130,000 
B)  $52,000 
C)  $30,769,230 
D)  $7,692,308 
E)  $23,076,923 
A)  $130,000 
B)  $52,000 
C)  $30,769,230 
D)  $7,692,308 
E)  $23,076,923

Question 15

The cost-benefit principle affects all other accounting system principles.

Accepted Answer

A) True 
 B)False

Question 16

__________________ processing accumulates source documents for a period of time and then processes them all at once such as daily,weekly,or monthly.

Accepted Answer

The answer of __________________ processing accumulates source documents for a...

Question 17

The difference in the sales journal between the perpetual and periodic inventory systems is that a column is used to record cost of goods sold and inventory amounts for each sale under the perpetual system but not the periodic system.

Accepted Answer

A) True 
 B)False

Question 18

Match the following accounting system components with the appropriate item(s):
 A. Input devices
B. Information storage
C. Information processor
D. Output devices
E. Source document 
 $\underline{\quad\quad\quad\quad\quad}$1. Computer hard drive
$\underline{\quad\quad\quad\quad\quad}$2. Computer monitor
$\underline{\quad\quad\quad\quad\quad}$3. Employee paychecks
$\underline{\quad\quad\quad\quad\quad}$4. Electronic files
$\underline{\quad\quad\quad\quad\quad}$5. Computer keyboard
$\underline{\quad\quad\quad\quad\quad}$6. Journal entries
$\underline{\quad\quad\quad\quad\quad}$7. Software
$\underline{\quad\quad\quad\quad\quad}$8. Financial statements
$\underline{\quad\quad\quad\quad\quad}$9. Journals
$\underline{\quad\quad\quad\quad\quad}$10. Invoice from suppliers

Accepted Answer

(1)B; (2)D; (3)D; (4

Question 19

A customer who had purchased $75,000 worth of merchandise on account returns 5% of this order to the seller because he is not satisfied with the quality of the goods.This transaction would be recorded in which journal if historically the seller has had very few returns of this nature?

Accepted Answer

A)  Sales journal 
B)  Purchases journal 
C)  Cash disbursements journal 
D)  Cash receipts journal 
E)  General journal 
A)  Sales journal 
B)  Purchases journal 
C)  Cash disbursements journal 
D)  Cash receipts journal 
E)  General journal

Question 20

Enterprise resource planning software packages include the programs that manage a company's vital operations.

Accepted Answer

A) True 
 B)False

Exam 25: Accounting With Special Journals

Under the perpetual inventory system,special journals are not required.

Each transaction recorded in the sales journal yields a debit to Accounts Receivable and a credit to Sales.

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.

Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

The flexibility principle requires that an accounting information system conform to a company's activities,personnel,and structure and adapt to a company's unique characteristics.

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

A company returned merchandise to a supplier because it did not meet their specifications.This transaction would be recorded in which of the following journals?

The SAP enterprise resource planning software is already being used to help direct the operations of many of the world's largest companies.

A company's Latin American segment had revenues of $2,089 million,operating income of $1,033 million,and average total assets of $1,443 million.The Latin American segment return on assets is:

The compatibility principle requires that an accounting system report useful,understandable,timely,and pertinent information for effective decision making.

____________________ is the accounting system component that keeps data in a form accessible to information processors.

The Midwest segment of a company had a segment return on assets of 13%.If the revenues and operating income of this segment were $4 million and $1 million,respectively,what is the segment's average total assets amount?

The cost-benefit principle affects all other accounting system principles.

__________________ processing accumulates source documents for a period of time and then processes them all at once such as daily,weekly,or monthly.

The difference in the sales journal between the perpetual and periodic inventory systems is that a column is used to record cost of goods sold and inventory amounts for each sale under the perpetual system but not the periodic system.

A customer who had purchased $75,000 worth of merchandise on account returns 5% of this order to the seller because he is not satisfied with the quality of the goods.This transaction would be recorded in which journal if historically the seller has had very few returns of this nature?

Enterprise resource planning software packages include the programs that manage a company's vital operations.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments and International Operations

Accounting for Partnerships

Filters