Deck 9: Appendix

Question 1

Off-the-shelf accounting software is inadequate to meet the needs of small businesses

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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.

Answer 3

False

Question 4

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

Question 5

The MIS is a subsystem of the accounting information system

Question 6

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

Question 7

Enterprise-application software is used primarily for journal entries

Question 8

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 9

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

Question 10

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

Question 11

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

Question 12

Under the perpetual system, special journals are not required

Question 13

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

Question 14

Four qualitative characteristics of information produced by an AIS are that the information must be timely, accurate, relevant and cost-effective.

Question 15

The General Journal is flexible and can be used for original, adjusting, closing, andcorrecting entries.

Question 16

A sales journal is used for recording cash sales

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

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 creditedperiodically for an amount equal to the sum of the credits to the subsidiary ledger.

Question 22

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

Question 23

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

Question 24

A columnar journal is a journal with only one column

Question 25

Items posted from the General Journal carry the initial P

Question 26

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

Question 27

A Sales Journal is used to record cash sales

Question 28

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

Question 29

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

Question 30

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 31

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

Question 32

Two common subsidiary ledgers are cash receipts and cash disbursements

Question 33

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

Question 34

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

Question 35

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

Question 36

Three issues involving the Sales Journal includerecording sales taxes (2)recordingsales returns and allowances and (3)recording purchase discounts.

Question 37

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 38

Equipment, inventory, and investments may also need subsidiary ledgers

Question 39

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

Question 40

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

Question 41

An MIS is designed to

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

Question 42

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

Question 43

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

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

Question 44

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

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

Question 45

The special journals under the perpetual inventory system

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

Question 46

An example of a specialty component of an AIS is

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

Question 47

Special journals include

A)Cash disbursements journal.
B)Cash receipts journal.
C)Purchases journal.
D)Sales journal.
E)All of these answers are correct.

Question 48

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

A)The addition of a sales tax payable column.
B)The deletion of a sales tax payable column.
C)The column to record cost of goods sold and inventory amounts sold.
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 49

The sale of inventory may

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

Question 50

The Purchases Journal is used for

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

Question 51

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

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

Question 52

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 CashDisbursements Journal.

Question 53

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

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

Question 54

Source documents

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

Question 55

Accounting information system components include

A)Software.
B)Hardware.
C)Input data.
D)People.
E)All of these answers are correct.

Question 56

The Sales Journal is used for

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

Question 57

Accounting information systems

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

Question 58

The three primary components of accounting information systems are

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

Question 59

The basic components of an accounting system include

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

Question 60

The General Journal is used for

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

Question 61

In a perpetual inventory system

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

Question 62

Define an accounting information system (AIS)

Question 63

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

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

Question 64

In a periodic inventory system

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

Question 65

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

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

Question 66

(1)Borrowed $5,000 from the bank.______ (2)A customer returned a $250 item purchased on account.______ (3)Purchased merchandise on account, $2,700.______ (4)Purchased a display rack on account for $4,700.______ (5)Paid $65,000 in wages and salaries.______ (6)Paid a utility bill for $3,400.______ (7)Purchased $1,590 of store supplies on account.______ (8)Recorded depreciation on store equipment of $4,000.______ (9)Returned defective inventory purchased on account, $2,900.______ (10)Recorded cash sales of $14,700.

Question 67

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

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

Question 68

An Accounts Payable subledger is

A)A subsidiary ledger that contains a separate account for each customer that grants credit to the company.
B)A book of original entry that is designed and used for recording only a specified type of transaction.
C)A subsidiary ledger that contains an account for each supplier that grants credit to the company.
D)The ledger that contains the financial statement accounts of a business.
E)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.

Question 69

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

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

Question 70

The Accounts Payable account in the General Ledger is

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

Question 71

The Accounts Receivable ledger is

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

Question 72

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

A)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.
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 debited periodically for an amount or amounts equal to the sum of the debits to the subsidiary ledger.
E)All of these answers are correct.

Question 73

After posting is completed, there may be an error if

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

Question 74

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

Question 75

What are the primary components within an accounting information system?

Question 76

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

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

Question 77

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

Question 78

An Accounts Receivable ledger is

A)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.
B)A book of original entry that is designed and used for recording only a specified type of transaction.
C)A subsidiary ledger that contains a separate account for each party that grants credit on account to the entity.
D)A subsidiary ledger that contains an account for each credit customer.
E)The ledger that contains the financial statement accounts of a business.

Question 79

The use of an Accounts Payable controlling account

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

Question 80

A subsidiary ledger

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