Deck 11: Accounting Information Systems

Question 1

Accounting information systems collect and process data about transactions and events, organize them in useful forms, and communicate results to decision makers.

Answer 1

True

Question 2

Because accounting information systems are so accurate, decision makers in practice do not need to have a basic knowledge of how the systems work.

Answer 2

False

Question 3

A management information system (MIS) is designed to collect and process data within an organization for the purpose of providing users with information.

Answer 3

True

Question 4

Enterprise-application software packages keep the programs that manage a company's vital operations.

Question 5

The Purchases Journal is the same in both the periodic and perpetual systems.

Question 6

A special journal is an all-purpose journal where we can record any other transactions not captured in special journals.

Question 7

Computer hardware is the programs that direct the operations of computer hardware.

Question 8

The periodic system does not record the increase in cost of goods sold and decrease in inventory at the time of sale.

Question 9

Source documents are a group of components that collect and process raw financial data into timely, accurate, relevant, and cost-effective information to meet the purposes of internal and external users.

Question 10

When posting from special journals all debit and credit entries are entered as separate amounts.

Question 11

Accounting information systems are designed to capture information about a company's transactions and to provide output including financial statements and special purpose reports.

Question 12

A special journal is any journal used for recording and posting transactions of a similar type.

Question 13

Most transactions for merchandising businesses fall into four groups: sales on credit, purchases on credit, cash receipts, and cash disbursements.

Question 14

The MIS is a subsystem of the accounting information system.

Question 15

Under the perpetual system, special journals are not required.

Question 16

A sales journal is used for recording cash sales.

Question 17

Enterprise-application software is used primarily for journal entries.

Question 18

Enterprise-application software is a stand-alone program not commonly used in North America.

Question 19

The General Ledger system represents the primary data base in the AIS.

Question 20

A management information system (MIS) is designed to collect and process data within an organization for the purpose of providing users with information.

Question 21

A columnar journal is a journal with only one column.

Question 22

A Sales Journal is used to record cash sales.

Question 23

The difference in the Sales Journal between the perpetual and periodic systems is the column to record cost of goods sold and inventory amounts for each sale.

Question 24

Each transaction recorded in the Sales Journal includes a debit to Accounts Receivable and a credit to Sales Revenue.

Question 25

To check for accuracy after posting: first a trial balance is completed, then the subsidiary ledgers are tested by preparing a schedule of the controlling account.

Question 26

A schedule of accounts receivable is a listing of all creditor accounts and account balances.

Question 27

If the total balance of the Accounts Receivable Ledger equals the total of the controlling Accounts Receivable account, then the individual accounts are presumed to be correct.

Question 28

The Accounts Payable ledger has a controlling account in the General Ledger and a separate subsidiary account for each creditor in the Accounts Payable ledger.

Question 29

Individual transactions in the Sales Journal are regularly posted to customer accounts in the Accounts Payable ledger.

Question 30

Account balances in the General Ledger and the subsidiary ledgers are tested for accuracy after posting is complete.

Question 31

A Sales Journal is used to record sales of merchandise on credit.

Question 32

Under the perpetual system cash sales are recorded at the point of sale.

Question 33

The general rule for posting is that the controlling account is debited periodically for an amount equal to the sum of the debits to the subsidiary ledger, and is credited periodically for an amount equal to the sum of the credits to the subsidiary ledger.

Question 34

The Accounts Payable ledger is used for storing transaction data regarding individual customers.

Question 35

Three issues involving the Sales Journal include: (1) recording sales taxes (2) recording sales returns and allowances and (3) recording purchase discounts.

Question 36

Items posted from the General Journal carry the initial P.

Question 37

Two common subsidiary ledgers are cash receipts and cash disbursements.

Question 38

Equipment, inventory, and investments may also need subsidiary ledgers.

Question 39

In general, subsidiary ledgers are not needed in perpetual systems because the accounting system captures sufficient details to support analyses that decision makers need.

Question 40

A subsidiary ledger is a listing of individual accounts with a common characteristic.

Question 41

Source documents

A) Are input devices
B) Provide basic information processed by an accounting system
C) Can be electronic files
D) Both provide basic information processed by an accounting system and can be electronic files
E) All of these

Question 42

One difference in the Sales Journal between the perpetual and periodic systems is

A) The column to record cost of goods sold and inventory amounts sold
B) The addition of a sales tax payable column
C) The deletion of a sales tax payable column
D) The column to record cost of goods sold and inventory amounts sold and the deletion of a sales tax payable column
E) The column to record cost of goods sold and inventory amounts sold and the addition of a sales tax payable column

Question 43

An example of a specialty component of an AIS is

A) Subsidiary ledger
B) Sales Journal
C) Property, plant and equipment
D) Cheque Register
E) Voucher

Question 44

Special journals include

A) Sales journal
B) Cash receipts journal
C) Purchases journal
D) Cash disbursements journal
E) All of these

Question 45

Accounting information system components include

A) People
B) Input data
C) Software
D) Hardware
E) All of these

Question 46

A book of original entry that is designed and used for recording only a specified type of transaction is called a

A) Schedule
B) Columnar ledger
C) Special journal
D) General journal
E) Subsidiary ledger

Question 47

The sale of inventory may

A) decrease inventory
B) impact the Sales Journal
C) create accounts receivable
D) initiate billing
E) All of these

Question 48

The Sales Journal and Cash Receipts Journal may have GST payable and PST payable columns added to them to facilitate recording. In the same manner GST receivable and PST receivable columns may be added to the Purchases Journal and the Cash Disbursements Journal.

Question 49

The General Journal is used for

A) Recording adjusting entries
B) Posting transactions to special journals
C) Accumulating debits and credits
D) Collecting detailed listings of amounts
E) Recording both adjusting entries and posting transactions to special journals

Question 50

The basic components of an accounting system include

A) Source documents
B) Input devices
C) Information processors
D) Information storage
E) All of these

Question 51

A company uses a Sales Journal, a Purchases Journal, a Cash Receipts Journal, a Cash Disbursements Journal, and a General Journal. A sales return for credit on account would be recorded in the

A) Sales Journal
B) General Journal
C) Cash Receipts Journal
D) Accounts Receivable Ledger
E) Cash Disbursements Journal

Question 52

The ledger that contains the financial statement accounts of a business is the

A) General Ledger
B) General Journal
C) Special Ledger
D) Special Journal
E) Column balance ledger

Question 53

The three primary components of accounting information systems are

A) Relevance, compatibility, and flexibility
B) Compatibility, flexibility, and cost-benefit
C) Compatibility, flexibility, and safety
D) Compatibility, timeliness, and cost-benefit
E) Accounts payable, accounts receivable, and payroll

Question 54

The Sales Journal and Cash Receipts Journal may have GST payable and PST payable columns added to them to facilitate recording.

Question 55

Most of the transactions of a merchandising company fall into four groups, including all of the following except

A) Sales on credit
B) Sales returns and allowances
C) Purchases on credit
D) Cash receipts
E) Cash disbursements

Question 56

The Purchases Journal is used for

A) Recording credit purchases
B) Recording credit sales
C) Recording cash sales
D) Recording cash purchases
E) Recording both credit purchases and credit sales

Question 57

An accounting information system uses __________ to provide internal and external users with ________.

A) data; information
B) data; transactions
C) data; costs
D) information; benefits
E) costs; benefits

Question 58

Accounting information systems

A) Collect and process data from events and transactions
B) Organize data in useful forms
C) Communicate information to decision makers
D) Both collect and process data from events and transactions and organize data in useful forms
E) All of these

Question 59

The Sales Journal is used for

A) Recording credit purchases
B) Recording credit sales
C) Recording cash sales
D) Recording cash purchases
E) Recording both credit sales and cash sales

Question 60

An MIS is designed to

A) Ensure reliable financial reports
B) Safeguard company assets
C) Ensure full disclosure
D) Both ensure reliable financial reports and safeguard company assets
E) Collect and process data

Question 61

When a business has more than one credit customer, a separate account receivable for each customer must be designed to show all of the following except

A) How much each customer has paid
B) How much each customer has purchased
C) How much sales tax each customer has paid
D) How much remains to be collected from each customer
E) All of these should be included

Question 62

A subsidiary ledger that contains a separate account for each party that grants credit on account to the business is called a(n)

A) Controlling account
B) Accounts Receivable Ledger
C) Accounts Payable Ledger
D) Merchandise Inventory Ledger
E) Accounts Payable

Question 63

In a periodic inventory system

A) The sales journal tracks merchandise inventory bought
B) The sales journal tracks decreases in inventory
C) The cash disbursements journal tracks purchase discounts
D) The cash receipt journal tracks cost of goods sold
E) The cash receipts journal tracks sales returns and allowances taken

Question 64

An Accounts Receivable ledger is

A) A subsidiary ledger that contains an account for each credit customer
B) A list of the balances of all the accounts in the Accounts Receivable ledger that is added to show the total amount of accounts receivable outstanding
C) A book of original entry that is designed and used for recording only a specified type of transaction
D) The ledger that contains the financial statement accounts of a business
E) A subsidiary ledger that contains a separate account for each party that grants credit on account to the entity

Question 65

A bookkeeper using a Purchases Journal recorded new store supplies purchased on account. The subledger that would be impacted as a result of this transaction is the

A) Accounts payable subledger
B) Accounts receivable subledger
C) Merchandise inventory subledger
D) Sales subledger
E) Cash receipts journal

Question 66

Explain the goals and uses of special journals.

Question 67

The use of an Accounts Payable controlling account

A) Reduces the number of accounts in the subsidiary ledger
B) Reduces the total number of accounts maintained
C) Reduces the number of entries in the general journal
D) Reduces the number of accounts in the general ledger
E) Increases the number of columns in the journals

Question 68

A list of the balances of all the accounts in the Accounts Receivable Ledger that is added to show the total of accounts receivable outstanding is called a

A) Schedule of accounts payable
B) Controlling account
C) Schedule of accounts receivable
D) Subsidiary ledger
E) Special journal

Question 69

An Accounts Payable subledger is

A) A subsidiary ledger that contains an account for each supplier that grants credit to the company
B) A list of the balances of all the accounts in the Accounts Receivable ledger that is added to show the total amount of accounts receivable outstanding
C) A book of original entry that is designed and used for recording only a specified type of transaction
D) The ledger that contains the financial statement accounts of a business
E) A subsidiary ledger that contains a separate account for each customer that grants credit to the company

Question 70

After posting is completed, there may be an error if

A) The sum of the customer account balances does not equal the total in the sales journal
B) The sum of the accounts receivable ledger does not equal the balance in the sales account
C) The sum of the customer account balances does not equal the accounts receivable controlling account balance
D) The balance in the sales journal does not equal the accounts receivable controlling account balance
E) The sum of the accounts receivable ledger does not equal the balance in the sales journal

Question 71

In a perpetual inventory system

A) The sales journal tracks sales discounts taken
B) The cash receipts journal tracks sales returns and allowances taken
C) The cash disbursements journal tracks purchase discounts taken
D) The purchase journal tracks merchandise inventory bought
E) The sales journal tracks increase in inventory

Question 72

The Accounts Payable account in the General Ledger is

A) The account that controls the subsidiary accounts payable ledger
B) The account that controls the purchases journal
C) The subsidiary account to the purchases journal
D) Part of a special journal
E) Part of a subsidiary ledger

Question 73

The Accounts Receivable ledger is

A) Used for recording credit sales
B) Used for storing transaction data for individual customers
C) Used for storing transaction data for individual creditors
D) Used for recording cash receipts from customers
E) Also the controlling account

Question 74

When a Sales Journal's sales amount column is totalled at the end of the month, the total is

A) Debited to Sales and credited to Accounts Receivable
B) Debited to Accounts Receivable and credited to Cash
C) Debited to Cash and credited to Accounts Receivable
D) Debited to Accounts Receivable and credited to Sales
E) Debited to Cash and credited to Sales

Question 75

The ledger that contains the financial statement accounts of a business is the

A) Columnar journal
B) Accounts payable ledger
C) General journal
D) General ledger
E) Subsidiary ledger

Question 76

The general rule for posting to a subsidiary ledger and its controlling account is

A) The controlling account is debited periodically for an amount or amounts equal to the sum of the debits to the subsidiary ledger
B) The controlling account is credited periodically for an amount or amounts equal to the sum of the credits to the subsidiary ledger
C) A trial balance ledger
D) The controlling account is both debited and credited periodically for an amount or amounts equal to the sum of the debits or credits to the subsidiary ledger
E) All of these

Question 77

What are the primary components within an accounting information system?

Question 78

The special journals under the perpetual inventory system

A) Include an additional sales tax payable journal
B) Include the sales journal, cash receipts journal, purchases journal, and cash disbursements journal
C) Include an additional inventory journal
D) Include an additional cost of goods sold journal
E) Include both an additional inventory journal and an additional cost of goods sold journal

Question 79

A subsidiary ledger

A) Includes transactions not covered by special journals
B) Is a listing of all of the accounts of a business
C) Is a listing of individual accounts with a common characteristic
D) Is a listing of all accounts with balances
E) Is a listing of all special journals

Question 80

List the five subsystems within a management information system (MIS).