Question 1

The accounts receivable ledger:

Accepted Answer

A)   Is for recording credit sales
B)   Is for storing transactions data for individual customers
C)   Is for storing transactions data for individual creditors
D)   Is for recording cash receipts from customers
E)   Is also the controlling accountF) C) and D)
G) A) and D)

Question 2

The five fundamental principles of accounting information systems are:

Accepted Answer

A)   Control, accountability, relevance, compatibility and flexibility
B)   Control, relevance, compatibility, flexibility and cost-benefit
C)   Control, relevance, compatibility, flexibility and safety
D)   Control, relevance, compatibility, timeliness and cost-benefit
E)   Historical cost, relevance, compatibility, flexibility and cost-benefitF) None of the above
G) B) and E)

Question 3

Assume that a company using a purchases journal made an error in totaling the journal's columns. The error should be discovered:

Accepted Answer

A)   When the purchases journal is posted to the general ledger
B)   When the trial balance is prepared
C)   When the total of the schedule of accounts payable is compared with the balance of the Accounts Payable account
D)   When the creditors receive their payments
E)   When the financial statements are preparedF) B) and C)
G) A) and C)

Question 4

When the sales journal's column for accounts receivable and sales is totaled at the end of the month, its total is:

Accepted Answer

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

Question 5

A company returned merchandise to a supplier because it did not meet their specifications. This transaction would be recorded in which of the following journals?

Accepted Answer

A)   Sales journal.
B)   Purchases journal.
C)   Cash disbursements journal.
D)   Cash receipts journal.
E)   General journal.F) A) and B)
G) A) and D)

Question 6

Explain how the amounts in the subsidiary ledgers are tested for accuracy.

Accepted Answer

The two-step procedure begins after the ...

Question 7

The Mid-west segment of a domestic company had a segment return on assets of 13%. If the revenues and operating income of this segment were $4 million and $1 million, respectively, what is the segment's average total assets amount?

Accepted Answer

A)   $130,000
B)   $52,000
C)   $30,769,230
D)   $7,692,308
E)   $23,076,923F) B) and E)
G) A) and E)

Question 8

The Accounts Payable account in the general ledger is:

Accepted Answer

A)   A controlling account for the subsidiary accounts payable ledger
B)   The account that controls the purchases journal
C)   The subsidiary account to the purchases journal
D)   Part of a special journal
E)   Part of a subsidiary ledgerF) A) and D)
G) C) and D)

Question 9

In a typical purchases journal, you would expect to see the following columns:

Accepted Answer

A)   Accounts payable dr.
B)   Purchase discounts cr.
C)   Accounts receivable cr.
D)   Inventory dr. (if perpetual method used) 
E)   Cost of Goods Sold dr. (if perpetual method used) F) B) and E)
G) C) and D)

Question 10

A customer who had purchased $75,000 worth of merchandise on account returns 5% of this order to the seller because he is not satisfied with the quality of the goods. This transaction would be recorded in which journal if historically the seller has had very few returns of this nature?

Accepted Answer

A)   Sales journal.
B)   Purchases journal.
C)   Cash disbursements journal.
D)   Cash receipts journal.
E)   General journal.F) None of the above
G) C) and D)

Question 11

The __________________ principle requires that an accounting information system must be able to adapt to changes in the company, business environment and needs of decision makers.

Accepted Answer

The answer of The __________________ principle requires that an accounting...

Question 12

Three transactions that would be recorded in the sales journal are: (1) recording sales taxes (2) recording sales returns and allowances and (3) recording purchases discounts.

Accepted Answer

A) True 
 B)False

Question 13

The flexibility principle requires that an accounting information system conform with a company's activities, personnel and structure and adapt to a company's unique characteristics.

Accepted Answer

A) True 
 B)False

Question 14

A company's Southwest segment had revenues of $12 million, operating income of $2 million and average total assets of $3 million. The Southwest segment return on assets is:

Accepted Answer

A)   42.85%
B)   41.67%
C)   25.00%
D)   16.67%
E)   66.67%F) C) and D)
G) B) and E)

Question 15

A __________________ journal is used to record and post transactions of similar type.

Accepted Answer

The answer of A __________________ journal is used to record...

Question 16

Posting debits from the Sales journal to Accounts Receivable twice - once to the general ledger account Accounts Receivable and once to the customer's subsidiary account - violates the accounting equation of debits equal credits.

Accepted Answer

A) True 
 B)False

Question 17

Enterprise resource planning software is primarily used for recording journal entries.

Accepted Answer

A) True 
 B)False

Question 18

The basic components of an accounting information system include all but which of the following?

Accepted Answer

A)   Source documents.
B)   Input devices.
C)   Cell phones.
D)   Information processors.
E)   Information storage.F) C) and D)
G) A) and B)

Question 19

The segment return on assets:

Accepted Answer

A)   Can only be determined for international companies
B)   Reflects the profitability of a segment
C)   Is difficult to calculate because companies with traded stock are not required to report segment information
D)   Is calculated as segment average assets divided by segment operating income
E)   Is calculated as segment sales divided by segment average assetsF) C) and D)
G) A) and B)

Question 20

Input devices are the means to make accounting information available to users.

Accepted Answer

A) True 
 B)False

Exam 27 Appendix : Accounting With Special Journals

Three transactions that would be recorded in the sales journal are: (1) recording sales taxes (2) recording sales returns and allowances and (3) recording purchases discounts.

Correct AnswerverifiedShow Answer

A company's Southwest segment had revenues of $12 million, operating income of $2 million and average total assets of $3 million. The Southwest segment return on assets is:

Correct AnswerverifiedShow Answer

The Mid-west segment of a domestic company had a segment return on assets of 13%. If the revenues and operating income of this segment were $4 million and $1 million, respectively, what is the segment's average total assets amount?

Correct AnswerverifiedShow Answer

A __________________ journal is used to record and post transactions of similar type.

Correct AnswerverifiedShow Answer

The basic components of an accounting information system include all but which of the following?

Correct AnswerverifiedShow Answer

Input devices are the means to make accounting information available to users.

Correct AnswerverifiedShow Answer

In a typical purchases journal, you would expect to see the following columns:

Correct AnswerverifiedShow Answer

The __________________ principle requires that an accounting information system must be able to adapt to changes in the company, business environment and needs of decision makers.

Correct AnswerverifiedShow Answer

Posting debits from the Sales journal to Accounts Receivable twice - once to the general ledger account Accounts Receivable and once to the customer's subsidiary account - violates the accounting equation of debits equal credits.

Correct AnswerverifiedShow Answer

The Accounts Payable account in the general ledger is:

Correct AnswerverifiedShow Answer

When the sales journal's column for accounts receivable and sales is totaled at the end of the month, its total is:

Correct AnswerverifiedShow Answer

Explain how the amounts in the subsidiary ledgers are tested for accuracy.

Correct AnswerverifiedThe two-step procedure begins after the ...View AnswerShow Answer

A customer who had purchased $75,000 worth of merchandise on account returns 5% of this order to the seller because he is not satisfied with the quality of the goods. This transaction would be recorded in which journal if historically the seller has had very few returns of this nature?

Correct AnswerverifiedShow Answer

A company returned merchandise to a supplier because it did not meet their specifications. This transaction would be recorded in which of the following journals?

Correct AnswerverifiedShow Answer

Assume that a company using a purchases journal made an error in totaling the journal's columns. The error should be discovered:

Correct AnswerverifiedShow Answer

The segment return on assets:

Correct AnswerverifiedShow Answer

Enterprise resource planning software is primarily used for recording journal entries.

Correct AnswerverifiedShow Answer

The accounts receivable ledger:

Correct AnswerverifiedShow Answer

The five fundamental principles of accounting information systems are:

Correct AnswerverifiedShow Answer

The flexibility principle requires that an accounting information system conform with a company's activities, personnel and structure and adapt to a company's unique characteristics.

Correct AnswerverifiedShow Answer

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The two-step procedure begins after the ...
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