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Exam 7: Accounting Information Systems

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Question 61

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Because companies use special journals,the use of the General Journal is optional.

A) True
B) False

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Question 62

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

A) It does not include a receivable account for each customer, but includes a cumulative account for all customers.
B) It contains information about the amount each customer purchased on credit, but excludes the customer name.
C) The total of the accounts in the accounts receivable subsidiary ledger must equal the accounts receivable balance in the general ledger.
D) Companies keep an accounts payable subsidiary ledger that is entirely different from the accounts receivable subsidiary ledger.

E) A) and B)
F) All of the above

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Question 63

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An accounting information system has three basic components: source documents and input devices,processing and storage,and internal controls.

Which of the following accounting information system activities is completed when merchandise inventory is sold?

In a manual accounting information system,reports and financial statements must be created using Word documents,Excel spreadsheets,or PowerPoint.

To safeguard a business's assets and reduce the likelihood of fraud and errors,its accounting information system ________.

Adjusting entries are recorded in the ________.

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 ________.

Which of the following is NOT an example of a storage device in an accounting information system?

Copper Company had the following transactions: $\begin{array} { | l | l | } \hline \text { Mar. } 3 & \begin{array} { l } \text { Sold merchandise inventory on account to } L \text {. Navarro, issuing invoice } \\\text { no. } 501 \text { for } \$ 1,100 \text { (cost, } \$ 890 ) \text {. }\end{array} \\\hline 22 & \begin{array} { l } \text { Purchased merchandise inventory on credit terms of } 3 / 10 , n / 30 \text { from } \\\text { Circus Co., } \$ 800 .\end{array} \\\hline 27 & \begin{array} { l } \text { Returned damaged merchandise inventory to Circus Co., issuing a debit } \\\text { memo for } \$ 800 .\end{array} \\\hline 31 & \text { Recorded March depreciation of } \$ 2,400 . \\\hline\end{array}$ Journalize the above transactions that should be recorded in the general journal.If a transaction should not be recorded in the general journal,identify the special journal that should be used.Assume the company uses the perpetual inventory system.

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

If there is cash involved in a business transaction,the transaction should be recorded in either the ________.

Credit sales of assets other than merchandise inventory occur infrequently and are recorded in the ________.

What are the two basic components of a computerized accounting information system?

The Other Accounts DR columns of a purchases journal are used for recording merchandise inventory and office supplies.

The accounts payable subsidiary ledger ________.

When using a purchases journal,Accounts Payable is always credited.

An automobile parts retailer purchases merchandise inventory for cash.When using a manual accounting information system,this transaction is recorded in the ________.

A subsidiary ledger is a record of accounts that provides supporting details on individual balances,the total of which appears in a general ledger account.

An accounting information system collects,records,stores,and processes accounting data to produce information that is useful for decision makers.