Deck 5: Accounting Systems

Question 1

Businesses must implement controls to help guide the behavior of their employees toward business objectives.

Answer 1

True

Question 2

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 into the Revenue journal.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

When specialized journals are used, the general journal is necessary.

Question 5

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

Question 6

Purchases of store equipment on account are recorded in the general journal.

Question 7

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

Question 8

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

Question 9

An accounting system is the methods and procedures used to collect, classify, summarize, and report the businesses financial information

Question 10

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

Question 11

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

Question 12

Analysis of user needs is the final phase in the creation or revision of an accounting system.

Question 13

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

Question 14

Specialized journals are books of original entry.

Question 15

The presence of a subsidiary ledger requires the presence of a summarizing controlling account.

Question 16

The methods or procedures used to record and report financial data are called the accounting system.

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

Closing journal entries are recorded in the general journal.

Question 22

Services provided for cash is recorded in the revenue journal.

Question 23

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

Question 24

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 25

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

Question 26

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

Question 27

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

Question 28

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

Question 29

Adjusting journal entries are recorded in a special journal.

Question 30

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

Question 31

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 32

When a large number of individual accounts with a common characteristic are grouped together, accounting calls this a controlling account.

Question 33

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

Question 34

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

Question 35

Services provided on account is recorded in the revenue journal.

Question 36

A personal withdrawal of cash is recorded in the general journal.

Question 37

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

Question 38

The revenue journal is to make it more efficient to record sales transactions made for cash.

Question 39

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

Question 40

Purchase journals will have an Other Accounts Cr. column.

Question 41

E-commerce provides business opportunities at a higher cost.

Question 42

Select the correct subsidiary ledger and appropriate posting for each of the following customer and creditor activities.

Question 43

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

A) Analysis
B) Feedback
C) Implementation
D) Internal controls

Question 44

The accounts included on specialized journals should not be customized for a businesses particular activities.

Question 45

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

Question 46

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

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

Question 47

The goal of systems analysis is to determine

A) when to implement a system
B) information needs
C) the size of the competitor's system
D) changes to the present system

Question 48

Match the following types of journal transactions with the journal in which it would be entered.

Question 49

Updating information in a computerized accounting system happens at the end of the month.

Question 50

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

Question 51

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 52

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

Question 53

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

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

Question 54

Which of the following is not an element of internal controls?

A) to protect assets from misuse
B) ensure the accuracy of business information
C) ensure that laws and regulations are followed
D) ensure that company policies are in place to maximize profits

Question 55

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 56

Computerized accounting systems prevent all journalizing errors.

Question 57

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

Question 58

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

Question 59

The term B2C refers to transactions conducted between two companies.

Question 60

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 61

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 62

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 63

Services performed for cash should be recorded in the

A) Revenue journal
B) Purchases journal
C) Cash Receipts journal
D) Cash Payments journal

Question 64

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 65

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 66

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 67

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

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

Question 68

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 69

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 70

A Cash Payments journal would not include a

A) Cash credit column
B) Sales Discounts credit column
C) Accounts Payable debit column
D) Other Accounts debit column

Question 71

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 72

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

Question 73

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 74

Each individual entry in the Revenue Journal is posted to

A) the Accounts Receivable controlling account
B) the accounts receivable subsidiary ledger
C) the Revenue controlling account
D) the accounts receivable subsidiary ledger and the controlling account

Question 75

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 76

A purchase of supplies on account is recorded in the

A) Revenue journal
B) General journal
C) Purchases journal
D) Cash Payments journal

Question 77

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 78

The controlling account in the general ledger that summarizes the debits and credits to the individual customers accounts in the subsidiary ledger is entitled

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

Question 79

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 80

Every controlling account must have its own

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