Deck 5: Accounting Systems

Question 1

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

Answer 1

True

Question 2

Specialized journals are books of original entry.

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

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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.

Question 21

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 22

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

Question 23

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

Question 24

Services provided for cash is recorded in the revenue journal.

Question 25

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

Question 26

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 27

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

Question 28

Services provided on account is recorded in the revenue journal.

Question 29

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

Question 30

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

Question 31

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

Question 32

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 33

Adjusting journal entries are recorded in a special journal.

Question 34

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

Question 35

Closing journal entries are recorded in the general journal.

Question 36

Purchase journals will have an Other Accounts Cr. column.

Question 37

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

Question 38

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

Question 39

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

Question 40

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

Question 41

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

Question 42

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

Question 43

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

Question 44

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

Question 45

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 46

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

Question 47

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 48

E-commerce provides business opportunities at a higher cost.

Question 49

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

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

Question 50

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 51

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

Question 52

Computerized accounting systems prevent all journalizing errors.

Question 53

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

Question 54

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 55

The term B2C refers to transactions conducted between two companies.

Question 56

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 57

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 58

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

Question 59

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 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

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 62

Services performed for cash should be recorded in the

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

Question 63

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 64

Every controlling account must have its own

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

Question 65

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 66

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 67

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 68

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 69

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 70

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 71

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 72

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 73

A purchase of supplies on account is recorded in the

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

Question 74

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 75

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 76

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 77

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 78

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 79

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 80

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