Question 1

A sales journal is ________.

Accepted Answer

A sales journal is a special journal used to record credit sales. It is used to keep track of all transactions involving the sale of goods or services on credit, allowing businesses to easily summarize and analyze these transactions. Option A is incorrect because a cash receipts journal is typically used to record all cash sales. Option B is incorrect because the sales journal is specifically used for merchandise inventory sales. Option D is incorrect because adjustments in revenue account are recorded in the general journal.

Question 2

Triangle Company sold a product on credit for $2,235 to Hexagon Sales.The cost of goods sold was $1,324.Assuming Triangle is following a perpetual inventory system and using a sales journal,it will record $2,235 in the ________.

Accepted Answer

Since Triangle is recording the sale on credit, the first account that will be debited is Accounts Receivable. The corresponding credit will be to Sales Revenue. Therefore, the correct option is D, which records the transaction in the Accounts Receivable DR, Sales Revenue CR column of the sales journal. The information about the cost of goods sold will be recorded separately in the inventory accounts.

Question 3

Southeastern Company sold merchandise for $4,450 to Northern Company on account.The cost of goods sold was $1,185.Southeastern Company uses a perpetual inventory system and special journals.The $4,450 is recorded as ________.

Accepted Answer

The sale on account is recorded in the special journal as a credit to Accounts Receivable and a debit to Sales Revenue. In a perpetual inventory system, cost of goods sold is recorded at the time of sale and is not part of the journal entry for the sale. Option A is incorrect because the sale is recorded in a special journal, not the general journal. Option C is incorrect because the purchases journal is used to record purchases of merchandise, not sales. Option D is incorrect because the cash receipts journal is used to record cash receipts, not sales on account.

Question 4

Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger.

Accepted Answer

Entries in the sales journal represent sales made on credit, which creates an account receivable for the customer. These entries are posted both to the accounts receivable subsidiary ledger to keep a record of each individual customer's transactions, and to the general ledger to update the overall accounts receivable balance.

Question 5

Gold Company had the following transactions:
  Use the following sales journal to record the preceding transactions.The company uses the perpetual inventory system.

Accepted Answer

The answer of Gold Company had the following transactions:
 ...

Question 6

After posting entries in a sales journal to the general ledger,the Accounts Receivable balance in the general ledger should equal the sum of the individual customer balances in the accounts receivable subsidiary ledger.

Accepted Answer

This is known as the subsidiary ledger control account reconciliation and is a fundamental accounting principle. The accounts receivable balance in the general ledger should always equal the sum of the individual customer balances in the accounts receivable subsidiary ledger.

Question 7

A control account ________.

Accepted Answer

A control account is a general ledger account that summarizes and controls the balances of a group of related accounts in a subsidiary ledger. The balance of the control account equals the total of the balances of the sub-ledger accounts. Therefore, choice B is the correct answer. Choices A, C, and D are incorrect because they do not accurately describe the nature of a control account.

Question 8

A company has four vendors and the accounts payable subsidiary ledger shows the following balances. $$\begin{array} { | l | r | } 
\hline \text { Alpha } & \$ 278,821 \
\hline \text { Beta } & 150,474 \
\hline \text { Gamma } & 91,943 \
\hline \text { Delta } & 41,187 \
\hline
\end{array}$$ Calculate the accounts payable balance in the general ledger.

Accepted Answer

The accounts payable balance in the general ledger is the sum of all the accounts payable balances in the subsidiary ledger. Adding up the balances in the subsidiary ledger gives $562,425, which is option B.

Question 9

The sales journal is used for all sales of merchandise inventory.

Accepted Answer

The sales journal is used for all sales of merchandise inventory on account.

Question 10

Ocean Company sells a product for $500 on account to Great Atlantic Sales.This transaction will be recorded in the ________.

Accepted Answer

Since the sale was made on account (credit), it will be recorded in the sales journal. The sales journal is used to record all credit sales made. The cash receipts journal is used to record all cash inflows, whereas the cash payments journal is used to record all cash outflows. The purchase journal is used to record all purchases made on credit.

Question 11

Which of the following is TRUE of posting from a sales journal to the general ledger?

Accepted Answer

Posting from a sales journal to the general ledger typically involves posting individual accounts receivable from the sales journal to the accounts receivable subsidiary ledger on a daily basis. Option A is not entirely accurate, as not all entries in the sales journal may be posted to the general ledger. Option C is also not entirely accurate, as the sales journal is not always a reliable record of amounts received from each customer if entries are not posted daily. Option D is not necessarily true, as a perpetual inventory system may still have columns for Cost of Goods Sold DR and Merchandise Inventory CR in the sales journal.

Question 12

State the purpose of a subsidiary ledger? What is included in the accounts receivable subsidiary ledger?

Accepted Answer

The answer of State the purpose of a subsidiary ledger?...

Question 13

California Company sold a product for $7,150 to Alliance Enterprises on credit.The cost of goods sold is $5,650.Assuming the firm is following a perpetual inventory system and using a sales journal,it will record $5,650 in the ________.

Accepted Answer

The correct answer is B) Cost of Goods Sold DR, Merchandise Inventory CR column. This is because, in a perpetual inventory system, the cost of goods sold is immediately recorded at the time of sale by debiting Cost of Goods Sold and crediting Merchandise Inventory to reflect the reduction in inventory.

Question 14

Which of the following is TRUE of a sales journal prepared under the perpetual inventory system?

Accepted Answer

Under the perpetual inventory system, the sales journal for recording sales of merchandise typically includes a Cost of Goods Sold debit and a Merchandise Inventory credit column to reflect the reduction in inventory and the cost associated with the goods sold.

Question 15

Which of the following is TRUE of an accounts receivable subsidiary ledger?

Accepted Answer

The purpose of an accounts receivable subsidiary ledger is to record the individual amounts owed by each customer. The total of the accounts in the subsidiary ledger must equal the accounts receivable balance in the general ledger as the subsidiary ledger is a supporting schedule to the accounts receivable account in the general ledger. Therefore, option C is the correct answer. Option A and B are incorrect as they are not true of an accounts receivable subsidiary ledger. Option D is also incorrect as companies typically keep an accounts payable subsidiary ledger that is similar to the accounts receivable subsidiary ledger.

Question 16

The cash receipts journal is a special journal used to record business transactions involving cash receipts and credit sales.

Accepted Answer

The cash receipts journal is a special journal used to record business transactions involving cash receipts.

Question 17

Sales on account are recorded in a cash receipts journal.

Accepted Answer

Sales on account are recorded in a sales journal.

Question 18

Dakota Company has four customers: A,B,C,and D.The accounts receivable balance in the general ledger is $9,083 and the accounts receivable subsidiary ledger of customers A,C,and D have $1,746,$3,296,and $3,940,respectively.Calculate the amount in the accounts receivable subsidiary ledger account of customer B.

Accepted Answer

D) The accounts receivable balance of $9,083 in the general ledger equals the sum of the accounts in the accounts receivable subsidiary ledger ($1,746 + $3,296 + ? + $3,940). Therefore, the amount in the accounts receivable subsidiary ledger account of customer B = $9,083 - ($1,746 + $3,296 + $3,940) = $101

Question 19

Northern Company sold goods to Eastern Enterprises for $1,000 on account.Cost of goods sold was $745.Northern uses a perpetual inventory system and special journals.The cost of goods sold is recorded in the ________ column of the sales journal.

Accepted Answer

In the perpetual inventory system, the cost of goods sold is recorded in the Cost of Goods Sold DR (Debit) and Merchandise Inventory CR (Credit) accounts. Therefore, the cost of goods sold will be recorded in the Cost of Goods Sold column of the sales journal, which is option C. The other options do not reflect the correct accounts or system for recording cost of goods sold.

Question 20

If a business uses the periodic inventory system,the sales journal will ________.

Accepted Answer

In a periodic inventory system, the Cost of Goods Sold (COGS) and Merchandise Inventory are not updated at the time of each sale. Instead, these accounts are adjusted at the end of the accounting period through a physical inventory count. Therefore, the sales journal, which records sales transactions, would exclude the COGS DR and Merchandise Inventory CR entries, as these are only calculated and recorded at the end of the period when inventory is physically counted.

Quiz 7: Accounting Information Systems