Question 1

Subsidiary ledgers do all of the following except:

Accepted Answer

Subsidiary ledgers do not eliminate the need for individual postings to the customer or supplier accounts. Instead, they facilitate the recording of these individual transactions and provide up-to-date information on the account balances.

Question 2

Alani's Hawaiian segment had revenues of $2,075 million,operating income of $1,500 million,and average assets of $1,450 million.The Hawaiian segment return on assets is:

Accepted Answer

Return on Assets (ROA) = Operating Income / Average Assets
ROA = ($1,500 million / $1,450 million) x 100%
ROA = 103.4%
Therefore, the Hawaiian segment's return on assets is 103.4%.

Question 3

When posting the sales journal's activity at the end of the month,its totals are:

Accepted Answer

The sales journal's activity represents sales made on credit, hence the accounts receivable account is debited and because the sales have been made, the sales account is credited. Therefore, the correct option is D, debited to accounts receivable and credited to sales.

Question 4

Which of the following is not true about enterprise resource planning (ERP)software:

Accepted Answer

ERP software can indeed be used to share data with customers and suppliers, so option D is not true. The other options are all true statements about ERP software.

Question 5

Doughton Furniture Company purchased merchandise on credit from Furniture Supply for $8,000.Two days later Doughton returned $2,000 of the merchandise due to damage.Doughton would record the return of merchandise in the:

Accepted Answer

The return of merchandise is recorded in the general journal because it involves a transaction that is not a cash receipt or disbursement and does not fit into the specialized journals like the purchases journal.

Question 6

Chandler Company sold merchandise on credit to Jamie Morgan for $700 and the cost of the merchandise was $290.Chandler would record this sale in the:

Accepted Answer

The sale made by Chandler Company to Jamie Morgan is on credit, not in cash. Thus, it should be recorded in the Sales journal as it involves only credit sales. The general journal and general ledger are used for all types of transactions. The cash receipts journal is used only when the company receives cash from customers. The Accounts Receivable controlling account is an account in the general ledger that summarizes all the transactions related to accounts receivable.

Question 7

An accounts receivable ledger is a:

Accepted Answer

An accounts receivable ledger is a list of separate accounts that show the balances outstanding from credit customers. This ledger is used to keep track of money owed to a company by customers who have purchased goods or services on credit. It is a subsidiary ledger within the overall accounting system.

Question 8

An accounts payable ledger:

Accepted Answer

An accounts payable ledger contains a separate account for each creditor or supplier to the company. It tracks the amounts owed to each supplier and is used for monitoring and managing the company's outstanding payables. Options A, B, C, and D do not accurately describe the purpose or content of an accounts payable ledger.

Question 9

The Accounts Payable controlling account:

Accepted Answer

The Accounts Payable controlling account is a general ledger account that keeps track of all outstanding invoices and payments to suppliers. It represents the sum of all balances owed to suppliers, hence Option D is the correct answer. Option A is incorrect as the Accounts Payable controlling account is a standard account included in the company's chart of accounts. Option B is incorrect as individual transactions related to supplies would be recorded in the Accounts Payable subsidiary ledger. Option C is incorrect as the creation of an Accounts Payable controlling account doesn't reduce the number of general journal entries required. Lastly, Option E is incorrect as the number of columns in the journals would not be affected by the creation of an Accounts Payable controlling account.

Question 10

Examples of other subsidiary ledgers besides those for accounts receivable and accounts payable may include all of the following except:

Accepted Answer

Cash is typically not maintained in a subsidiary ledger as it is a part of the general ledger. Subsidiary ledgers are used for accounts that require detailed tracking, like equipment, payroll, inventory, and investments.

Question 11

The segment return on assets:

Accepted Answer

The segment return on assets reflects on the profitability of a segment.

Question 12

Enterprise-resource planning software:

Accepted Answer

Enterprise-resource planning software is specifically designed to help manage a company's vital operations such as finance, human resources, manufacturing, supply chain, and customer relationship management. It goes beyond the functionality of spreadsheet or database programs and often includes real-time data access and processing capabilities. While the use of ERP software has evolved over time, it is still widely used by organizations of all sizes to improve efficiency and decision-making.

Question 13

A business segment is part of a company that:

Accepted Answer

A business segment is a part of a company that is separately identified by its products, services, or geographic market. It requires separate reporting, as it operates independently from other segments of the company.

Question 14

Chandler Company purchased merchandise on credit from Lighting Supply for $5,600.Chandler would record this sale in the:

Accepted Answer

Purchases made on credit are recorded in the purchases journal, which is used to track all credit purchases of merchandise for resale. The other options (A, B, C, E) are not appropriate for recording this type of transaction.

Question 15

Doughton Furniture Company purchased merchandise on credit from Furniture Supply for $8,000.Two days later Doughton returned $2,000 of the merchandise due to damage.When Doughton pays for the merchandise minus the return,it would record the payment in the:

Accepted Answer

The payment for the merchandise minus the return would be recorded in the cash disbursements journal because it represents an outgoing cash transaction. The general journal is used for adjusting entries and other miscellaneous transactions, the cash receipts journal is used for incoming cash transactions, the purchases journal is used to record purchases on credit, and the accounts payable controlling account is a subsidiary ledger used to track amounts owed to vendors.

Question 16

Assume that a company uses special journals for sales,purchases,cash receipts,and cash disbursements.A sales return for credit on account would be recorded in the:

Accepted Answer

A sales return for credit on account is not a cash transaction and does not fit into the special journals for sales, cash receipts, or cash disbursements. It is recorded in the general journal, which is used for non-routine transactions.

Question 17

A subsidiary ledger that contains a separate account for each supplier (creditor)to the company is a(n):

Accepted Answer

An accounts payable ledger is a subsidiary ledger that contains a separate account for each supplier (creditor) to the company. This ledger allows the company to keep track of its outstanding balances and payments due to its suppliers.

Question 18

A subsidiary ledger:

Accepted Answer

A subsidiary ledger is a listing of individual accounts and amounts with a common characteristic, such as accounts receivable or accounts payable. It is used to provide more detailed information than what is recorded in the general ledger. Option A is incorrect because special journals are actually used to record certain types of transactions, so a subsidiary ledger would not include those transactions. Option B is incorrect because a subsidiary ledger only contains a subset of accounts from the general ledger. Option D is incorrect because a subsidiary ledger is distinct from the general ledger. Option E is incorrect because special journals are not the same as subsidiary ledgers.

Question 19

The accounts receivable ledger:

Accepted Answer

The accounts receivable ledger stores transaction data for individual customers, which allows for tracking of amounts owed and payment history for each customer. It is not a substitute for the sales journal, cash receipts journal, or accounts payable ledger. It is also the controlling account for accounts receivable, meaning it summarizes the balance owed by all customers and is used to reconcile the subsidiary ledger with the general ledger.

Question 20

An approach that enters and processes data into the accounting system as soon as source documents are available is called:

Accepted Answer

Online processing is a real-time approach where data is entered and immediately processed into the accounting system as soon as source documents are available, without waiting for a batch of transactions to accumulate. This avoids delays and ensures timely and accurate financial information for decision-making. Date storage, computer programming, and web communications are not relevant to this approach. Batch processing involves waiting for a group of transactions to accumulate before processing them together.

Quiz 7: Accounting Information Systems