Deck 10: Special Journals

Question 1

Enterprise resource planning systems integrate all aspects of the organization, including accounting, sales, human resource management, and manufacturing.

Answer 1

True

Question 2

A subsidiary ledger provides up-to-date information on specific account balances.

Answer 2

True

Question 3

Special journals are used to record unique transactions which do not occur very often.

Answer 3

False

Question 4

A cash receipts journal can be used to record all transactions involving cash received by the business, regardless of the source.

Question 5

The basic principles of an accounting information system are cost awareness, usefulness, and fixed structure.

Question 6

An accounts receivable subsidiary ledger has all the detailed information about cash sales to individual customers.

Question 7

A cash payments journal should not be used to record transactions that require payment by check.

Question 8

An advantage of using a subsidiary ledger is that one employee must post to both the subsidiary ledger and the general ledger.

Question 9

The accounts payable subsidiary ledger provides detailed information about amounts owed to creditors.

Question 10

An accounting information system involves data collection, data processing, and information dissemination.

Question 11

A control account and subsidiary ledger can be established for inventory.

Question 12

An accounting information system should be cost effective; that is, the benefits of the information must outweigh the cost of providing it.

Question 13

Each general ledger control account balance must equal the composite balance of the individual accounts in the related subsidiary ledger at the end of an accounting period.

Question 14

A subsidiary ledger is a group of control accounts which provides information to the managers for controlling the operation of the company.

Question 15

An accounting system has flexibility if it can be used by many different companies at the same time.

Question 16

Postings are generally made more frequently to the general ledger control accounts than to the individual accounts in the subsidiary ledgers.

Question 17

The total of the individual account balances in the accounts receivable subsidiary ledger should agree with the total of the individual account balances in the accounts payable subsidiary ledger.

Question 18

If a transaction cannot be recorded in a special journal, it indicates that the company should adopt an electronic accounting system.

Question 19

General ledger accounting systems are software programs that integrate the various accounting functions related to sales, purchases, cash receipts and disbursements, and payroll.

Question 20

Control accounts are always located in the general ledger.

Question 21

The cash payments journal only has one column because all entries recorded in this journal require a credit to the Cash account.

Question 22

Cost of Goods Sold is not recorded in a sales journal.

Question 23

When special journals are employed, all postings must be monthly or daily but cannot be both.

Question 24

Transaction amounts recorded in the general journal are never posted to accounts in the subsidiary ledger.

Question 25

The reference column in a sales journal is used to indicate the general ledger account number when the entry is posted.

Question 26

The principle of an efficient accounting system that states that an accounting system should accommodate a variety of users is

A) cost-effectiveness.
B) flexibility.
C) usefulness.
D) implementation.

Question 27

A one-column purchases journal is used to record purchases of merchandise on account.

Question 28

Which of the following is not a basic principle of designing and developing an effective accounting information system?

A) Approval by the SEC
B) Usefulness
C) Flexibility
D) Cost-effectiveness

Question 29

The amounts appearing in the Inventory column of the cash payments journal are posted individually to the accounts in the accounts payable subsidiary ledger.

Question 30

Only transactions that cannot be entered in a special journal are recorded in the general journal.

Question 31

Using special journals can save time in posting because column totals are often posted rather than individual entries.

Question 32

A cash receipts journal will usually have a credit column for Accounts Receivable.

Question 33

In developing an accounting system, cost-effectiveness does not imply that

A) the benefits obtained from the system outweigh the costs.
B) an electronic system must be cheaper than the system it is replacing.
C) the system should be cost-effective.
D) the value of an accounting report should be at least equal to the cost of producing it.

Question 34

Companies make daily postings from the sales journal to the individual accounts receivable in the subsidiary ledger.

Question 35

A cash receipts journal will usually have a credit column for Sales Discounts.

Question 36

A debit column for Sales Returns and Allowances may be found in the cash payments journal.

Question 37

A company will usually replace a manual accounting information system with an electronic system as the operations increase in

A) efficiency.
B) complexity.
C) simplicity.
D) productivity.

Question 38

Posting from the sales journal to the general ledger is done daily.

Question 39

When control and subsidiary accounts are involved, there must be a dual posting.

Question 40

Totaling the columns of a journal and proving the equality of the totals is called footing and cross-footing a journal.

Question 41

Which of the following statements is incorrect?

A) A major consideration in developing an accounting system is cost-effectiveness.
B) When an accounting system is designed, no consideration needs to be given to the needs and knowledge of the various users.
C) The accounting system should be able to accommodate a variety of users and changing information needs.
D) To be useful, information must be understandable, relevant, reliable, timely, and accurate.

Question 42

Postings are made daily to the

A) Accounts Receivable control account.
B) Accounts Payable control account.
C) Accounts Receivable subsidiary ledger.
D) control accounts in the general ledger.

Question 43

The accounting environment does not change as a result of

A) technological advances.
B) government regulation.
C) the double entry system.
D) organizational growth.

Question 44

Accounts Receivable and Accounts Payable are examples of

A) nominal accounts.
B) controlling accounts.
C) subsidiary ledger accounts.
D) both nominal accounts and controlling accounts.

Question 45

The composite balance of individual accounts in the accounts payable subsidiary ledger must

A) equal the composite balance of the individual accounts in the accounts receivable subsidiary ledger.
B) always be zero.
C) equal the balance of the accounts payable account in the general ledger.
D) agree with the total of the Accounts payable column in the cash receipt journal.

Question 46

A subsidiary ledger is

A) used in place of the general ledger if the general ledger is destroyed or stolen.
B) a group of accounts used by branches and subsidiaries of a corporate business.
C) a group of accounts with a common characteristic that provides detailed information about a control account in the general ledger.
D) used to post excess transactions if a general ledger account becomes full during an accounting period.

Question 47

To be useful, the information outputs of a system should be

A) relevant, reliable, timely, and accurate.
B) reliable, flexible, understandable and timeless.
C) such that one report meets all different users needs.
D) distributed only to management personnel.

Question 48

The individual amounts in the sales journal are posted to the accounts receivable subsidiary ledger

A) daily.
B) weekly.
C) monthly.
D) yearly.

Question 49

Principles of an efficient and effective accounting information system include all of the following except

A) cost-effectiveness.
B) flexibility.
C) usefulness.
D) All of these answer choices are principles.

Question 50

Which of the following is a true statement about manual and electronic accounting systems?

A) Few small companies begin with manual systems.
B) The design and structure of manual and electronic systems are essentially the same.
C) Many companies convert from electronic to manual systems.
D) The design and structure of manual and electronic systems are fundamentally different.

Question 51

Which of the following is not an advantage of a subsidiary ledger?

A) Shows transactions affecting one customer or one creditor in a single account
B) Helps locate errors in individual accounts
C) Puts greater detail in the general ledger
D) Makes possible a division of labor

Question 52

Postings to the control accounts in the general ledger are made

A) annually.
B) daily.
C) monthly.
D) weekly.

Question 53

All of the following are advantages of using subsidiary ledgers except they

A) eliminate errors in individual accounts.
B) free the general ledger of excessive details.
C) show, in a single account, transactions affecting one customer or one creditor.
D) make possible a division of labor.

Question 54

A sales journal is used to record

A) only cash sales of merchandise.
B) sales of all assets on credit and for cash.
C) only credit sales of merchandise.
D) credit sales of merchandise, sales returns and allowances, and sales discounts.

Question 55

A company would not likely use subsidiary ledgers for

A) inventory.
B) owner's capital.
C) equipment.
D) accounts receivable.

Question 56

A student should recognize a need to study manual accounting systems because

A) the structure of electronic systems differs greatly from manual systems.
B) all small companies only use manual accounting systems.
C) the software and hardware of electronic systems vary greatly, which makes manual procedures more practical to study.
D) companies that use manual systems hire more accountants.

Question 57

The balance of a control account in the general ledger

A) must always be zero.
B) must equal the amount of total assets.
C) is always greater than the composite balance of individual accounts in a related subsidiary ledger.
D) must equal the composite balance of individual accounts in a related subsidiary ledger.

Question 58

A subsidiary ledger frees the general ledger from details of

A) individual balances.
B) external transactions.
C) internal transactions.
D) the control account.

Question 59

Postings are made daily to subsidiary ledgers so that

A) employees are kept busy.
B) debits equal credits.
C) individual account information is kept current.
D) the control account will balance to the subsidiary ledger.

Question 60

The principles of developing an accounting information system do not include

A) usefulness.
B) flexibility.
C) cost-effectiveness.
D) elimination of human involvement.

Question 61

Correcting entries are journalized in

A) a special journal.
B) the general journal.
C) the general ledger.
D) a correcting journal.

Question 62

A one-column purchases journal indicates that

A) only purchases of merchandise on account can be recorded.
B) all purchases of merchandise can be recorded.
C) all acquisitions on account can be recorded.
D) another column must be added so that debits and credits can be recorded.

Question 63

The entries in a sales journal will show

A) all sales of merchandise.
B) the cash sales of the company.
C) the credit sales of merchandise.
D) all sales of the company.

Question 64

The one characteristic that all entries recorded in a cash receipts journal have in common is

A) that they all include a credit to the Cash account.
B) that they all represent collections from customers.
C) that they originate from the sales of merchandise.
D) that they all include a debit to the Cash account.

Question 65

In which journal would a customer's partial payment on account be recorded?

A) Sales journal
B) Cash receipts journal
C) General journal
D) Cash payments journal

Question 66

The one characteristic that all entries recorded in a multi-column purchases journal have in common is that they all include a

A) credit to the Cash account.
B) debit to the Cash account.
C) debit to the Accounts Payable account.
D) credit to the Accounts Payable account.

Question 67

In which journal would a cash purchase of inventory be recorded?

A) Purchases journal
B) General journal
C) Cash payments journal
D) None of these answer choices are correct.

Question 68

If a company purchases merchandise for cash, the transaction should be recorded in the

A) purchases journal.
B) general journal.
C) cash payments journal.
D) sales journal.

Question 69

If a transaction cannot be recorded in a special journal

A) the company must refuse to enter into the transaction.
B) it is recorded in the general journal.
C) it is recorded directly in the accounts in the general ledger.
D) it is recorded as an adjustment on the worksheet.

Question 70

A company which uses special journals should record a transaction involving the purchase of merchandise for cash in a

A) one-column purchases journal.
B) multi-column purchases journal.
C) cash payments journal.
D) general journal.

Question 71

If a transaction cannot be recorded in a special journal, it is

A) not recorded.
B) a correcting entry.
C) recorded in the general journal.
D) an error.

Question 72

Postings from the purchases journal to the general ledger are made

A) daily.
B) monthly.
C) weekly.
D) yearly.

Question 73

Cash from sales of merchandise will be recorded in the

A) purchases journal.
B) sales journal.
C) cash receipts journal.
D) general journal.

Question 74

Which of the following is not a special journal?

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

Question 75

Adjusting entries are recorded

A) only on the worksheet.
B) only in the general ledger.
C) in the general journal.
D) in the special journals.

Question 76

The one characteristic that all entries recorded in a cash payments journal have in common is

A) that they all represent purchases of merchandise.
B) that they all include a credit to the cash account.
C) that they are all posted to the accounts payable subsidiary ledger.
D) that they all include a debit to the accounts payable or purchases accounts.

Question 77

If merchandise from a cash sale is returned by a customer for a refund, the sales return is recorded in the

A) general journal.
B) cash receipts journal.
C) cash payments journal.
D) sales journal.

Question 78

If an owner withdraws cash for personal use, the transaction should be recorded in the

A) sales journal.
B) cash receipts journal.
C) general journal.
D) cash payments journal.

Question 79

A company uses a sales journal, cash receipts journal, purchases journal, cash payments journal, and a general journal. A cash sales return would be recorded in the

A) sales journal.
B) cash receipts journal.
C) cash payments journal.
D) general journal.

Question 80

The use of special journals to record transactions

A) eliminates the need for a general ledger.
B) can save time in the posting process.
C) eliminates the need for a general journal.
D) should only be used if the volume of transactions is small.