Deck 5: Accounting Systems

Question 1

Even when special journals are used, purchases of store equipment on account are recorded in the general journal.

Answer 1

False

Question 2

The basic procedure of posting from a revenue journal is to make all postings at the end of the month.

Answer 2

False

Question 3

Processing methods are the means by which the system collects, summarizes, and reports accounting information.

Answer 3

True

Question 4

The presence of a subsidiary ledger requires the presence of a summarizing control account in the general ledger.

Question 5

Once an accounting system has been implemented, feedback will be used to continuously analyze and improve the system.

Question 6

Systems analysis is the final phase in the creation or revision of an accounting system.

Question 7

The format and number of specialized journals that a business uses depend upon the legal organization of the business.

Question 8

Designing a system to meet user needs is the final phase in the creation or revision of an accounting system.

Question 9

Specialized journals are books of original entry.

Question 10

When specialized journals are used, the general journal is not necessary.

Question 11

An accounting system design consists of internal controls and information processing methods.

Question 12

When a sale for $1,350 takes place with a $250 deposit having been received in advance, only the $1,100 on account is recorded in the revenue journal.

Question 13

The principal ledger that contains all the balance sheet and income statement accounts is the general ledger.

Question 14

Accounting systems evolve through a three-step process: analysis, design, and feedback.

Question 15

Most accounting systems evolve as the business grows and requires changes in its methods for collecting, accumulating, and reporting information.

Question 16

The customers subsidiary ledger is controlled by the general ledger account entitled Accounts Payable.

Question 17

Transactions must first be recorded in the general journal before they can be entered in specialized journals.

Question 18

The methods and procedures for collecting, classifying, summarizing, and reporting a business's financial and operating information are called the accounting system.

Question 19

An account for each supplier of merchandise will appear in the accounts payable subsidiary ledger.

Question 20

A control account is used to record the details of the individual subsidiary accounts.

Question 21

A cash refund paid to a customer who overpaid an account receivable is recorded in the cash payments journal.

Question 22

The customers ledger and the creditors ledger refer to subsidiary ledgers.

Question 23

Sales of office supplies for cash, at cost, to a neighboring business as an accommodation are recorded in the revenue journal.

Question 24

When a large number of individual accounts with a common characteristic are grouped together in a separate ledger, the summarizing account in the general ledger is called a control account.

Question 25

The total of the accounts receivable subsidiary accounts and the balance of the accounts receivable control account should equal each other at the end of the period.

Question 26

Even when special journals are used, closing journal entries are recorded in the general journal.

Question 27

Services provided on account are recorded in the revenue journal.

Question 28

The total on the "Accounts Payable Creditor Balances" report at January 31, the end of the first month of operations, agrees with the total of the Accounts Payable Dr. column in the cash payments journal for the same period.

Question 29

Services provided for cash are recorded in the revenue journal.

Question 30

Adjusting journal entries are recorded in a special journal.

Question 31

Even when special journals are used, a personal withdrawal of cash is recorded in the general journal.

Question 32

The Post. Ref. column of the revenue journal will reference the account number of the customer.

Question 33

The accounts receivable subsidiary ledger is an example of a special journal.

Question 34

The purchase of supplies for cash would be recorded in the purchases journal.

Question 35

The Other Accounts column in the cash payments journal is used for recording debits to any account for which there is no specialized debit column.

Question 36

Purchases journals will have an Other Accounts Cr. column.

Question 37

The Other Accounts column in the cash receipts journal is used for recording debits to any account for which there is no special debit column.

Question 38

The use of subsidiary ledgers is limited to Accounts Payable and Accounts Receivable.

Question 39

Posting from a revenue journal to the customer account is normally done only at the end of the month.

Question 40

The revenue journal is designed for the efficient recording of cash sales transactions.

Question 41

Which of the following is not one of the three phases needed when changing an accounting system, either in its entirety or in part?

A) analysis
B) design
C) review
D) implementation

Question 42

Businesses can only be segmented by type of customer.

Question 43

Which of the following is not part of a three-step process that a growing business uses for the evolution of its accounting system?

A) analysis
B) design
C) implementation
D) feedback

Question 44

Processing methods

A) are the policies and procedures that protect assets from misuse
B) must be computerized
C) are the means by which the accounting system collects, summarizes, and reports accounting information
D) ensure that business laws and regulations are followed

Question 45

The three phases of setting up an accounting system in correct order are

A) design, implementation, analysis
B) analysis, design, implementation
C) design, analysis, implementation
D) implementation, design, analysis

Question 46

In computerized accounting systems, reports may be generated at any time.

Question 47

The means by which the accounting system collects, summarizes, and reports accounting information is called information

A) reporting methods
B) accounting methods
C) control methods
D) processing methods

Question 48

In a computerized accounting system, all postings happen automatically at the end of the month.

Question 49

The goal of systems design is to

A) determine when to implement a system
B) meet user needs
C) determine the size of the competitor's system
D) make changes to the present system

Question 50

The primary ledger containing all the balance sheet and income statement accounts is the

A) general ledger
B) creditors ledger
C) customers ledger
D) subsidiary ledger

Question 51

E-commerce provides additional business opportunities but at the cost of reduced speed and efficiency.

Question 52

Generally, subsidiary ledgers are used for general ledger accounts that consist of a large number of individual items.

Question 53

Computerized accounting systems prevent all journalizing errors.

Question 54

One way to report revenue earned by a company is to present it by the different segments of business.

Question 55

The term B2C refers to transactions conducted between two companies.

Question 56

After an accounting system has been set up, what is the next step?

A) Create the chart of accounts.
B) Obtain input from users to analyze and improve the system.
C) Implement analysis and design.
D) Set up internal controls.

Question 57

The columns included in special journals are standardized for all businesses.

Question 58

The phase of accounting system installation in which the information needs of people in the organization are taken into account is

A) analysis
B) design
C) implementation
D) installation

Question 59

A (n) ____ system is the methods and procedures for collecting, classifying, summarizing, and reporting a business's financial and operating information.

A) accounting
B) fiduciary
C) operations
D) auditing

Question 60

Using the Internet to perform business transactions is called e-commerce.

Question 61

The controlling account in the general ledger that summarizes the individual customer accounts in the subsidiary ledger is entitled

A) Purchases
B) Accounts Payable
C) Fees Earned
D) Accounts Receivable

Question 62

Which of the following transactions is recorded in the purchases journal?

A) purchase of store supplies on account
B) return of damaged office equipment
C) purchase of store supplies for cash
D) purchase of office equipment for cash

Question 63

When there are a large number of individual accounts with a common characteristic, it is common to place them in a separate ledger called a (n)

A) general ledger
B) income statement ledger
C) group ledger
D) subsidiary ledger

Question 64

The subsidiary ledger that includes customer account activity is called the

A) asset ledger
B) accounts payable ledger
C) expense ledger
D) accounts receivable ledger

Question 65

A purchase of supplies for cash is recorded in the

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

Question 66

At the end of the month, the total of the amount column of the revenue journal is posted as a

A) debit to Accounts Receivable and a credit to Cash
B) debit to Accounts Receivable and a credit to Fees Earned
C) debit to Cash and a credit to Fees Earned
D) debit to Cash and a credit to Accounts Payable

Question 67

A purchase of supplies on account is recorded in the

A) revenue journal
B) general journal
C) purchases journal
D) cash payments journal

Question 68

In which journal is the return of supplies purchased on account recorded?

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

Question 69

Services performed for cash should be recorded in the

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

Question 70

A cash purchase of supplies should be recorded in the

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

Question 71

Which of the following is recorded in the cash receipts journal?

A) cash withdrawn by the owner
B) cash purchase of equipment
C) cash received on customer's account
D) adjusting entry for depreciation

Question 72

Which of the following is always recorded in the general journal?

A) rendering services for cash
B) purchases of supplies on account
C) rendering services on account
D) closing entries

Question 73

When posting column totals in the purchases journal, a credit should be posted to

A) Merchandise Inventory
B) Accounts Payable
C) Sales Returns and Allowances
D) Cash

Question 74

Which of the following is always recorded in the general journal?

A) services rendered for cash
B) correction of error in billing client
C) purchases of equipment on account
D) purchases of equipment for cash

Question 75

Every controlling account must have its own

A) revenue ledger
B) general ledger
C) subsidiary ledger
D) journal

Question 76

Which of the following transactions is recorded in the revenue journal?

A) sale of excess office equipment for cash
B) rendering services for cash
C) rendering services on account
D) sale of excess office equipment on account

Question 77

Which of the following is recorded in the cash payments journal?

A) adjusting entry for accrued salaries
B) receipt of cash on supplies returned
C) receipt of cash from services rendered
D) payment of employees' salaries

Question 78

Each individual entry in the revenue journal is posted to the

A) accounts receivable controlling account
B) accounts receivable subsidiary ledger
C) revenue controlling account
D) accounts receivable subsidiary ledger and the controlling account

Question 79

A cash payments journal would not include a (n)

A) Cash Cr. column
B) Sales Discounts Cr. column
C) Accounts Payable Dr. column
D) Other Accounts Dr. column

Question 80

In which journal would an adjustment for an overcharge by a creditor be recorded?

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