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| 1 | |
If a company only has a small number of sales returns transactions for any given year, they may enter such transactions in the General Journal. However, when the number of sales returns is large, a special journal for Sales Returns and Allowances would probably be utilized. If such a journal is established, which of the following statements is true? |
| | A) | Credits to this journal will be to the Cash account. |
| | B) | Credits to this journal will be to the Inventory account. |
| | C) | Credits to this journal will be to the Accounts Receivable account. |
| | D) | Credits to this journal will be to the Sales Revenue account. |
| | E) | None of the above is true. |
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| 2 | |
A customer always buys items on credit terms of 2/10, net 60. In order to find out if this customer has paid any particular invoice, which of the following records would have to be examined? |
| | A) | The balance sheet. |
| | B) | A listing of all of the Accounts Payable as of a specific date. |
| | C) | The Accounts Payable Subsidiary Ledger. |
| | D) | The Cash Payments Journal. |
| | E) | The Accounts Receivable Subsidiary Ledger. |
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| 3 | |
One of the special journals used by the Baxter Corporation is the Sales Journal: its set up follows the format illustrated in the textbook. When posting items from the Sales Journal to the General Ledger, which of the following statements will be true? |
| | A) | The Cash account will be debited for the total of the Cash column as found in the Sales Journal. |
| | B) | The Cash account will be credited for the total of the Cash column as found in the Sales Journal. |
| | C) | Each credit to the Sales Revenue column will be individually posted from the Sales Journal to the Sales Revenue account in the General Ledger. |
| | D) | Each debit to the Accounts Receivable account in the Sales Journal will be separately posted to the Accounts Receivable subsidiary ledger. |
| | E) | None of the above. |
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| 4 | |
Which of the following business source documents would be used to best support an entry in the Purchases Journal? |
| | A) | A cancelled checks used to pay for the acquisition of merchandise inventory on credit. |
| | B) | A bank deposit slip showing $1,000 of cash had been deposited into the business checking account. |
| | C) | An invoice sent from a regular supplier of merchandise showing the total amount owed to the supplier. |
| | D) | The merchant copy of a credit card receipt retained when a customer used his credit card to buy something. |
| | E) | None of the above. |
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| 5 | |
Which one of the following business source documents would best document an entry in the Cash Receipts Journal? |
| | A) | A cancelled check used to pay for the acquisition of merchandise inventory on credit. |
| | B) | An invoice sent from a regular supplier of merchandise showing the total amount owed to the supplier. |
| | C) | A paper cash register tape removed from the cash register at the end of the business day which summarizes both the total cash and credit sales for the day. |
| | D) | A receipt for $50 showing how much in office supplies were purchased for cash from the town's stationery store. |
| | E) | None of the above. |
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| 6 | |
Even if a company has all of the special journals described in the textbook, which one of the following sets of entries will be found solely in the General Journal? |
| | A) | The (1) purchase of inventory for cash and (2) the sale of a piece of land for cash. |
| | B) | The (1) payment of the monthly telephone bill in cash and (2) the owner of a sole proprietorship withdrawing $500 of cash for her personal use. |
| | C) | The (1) monthly adjusting entry to accrue earned but unpaid wages and (2) the owner of a sole proprietorship withdrawing one of the firm's laptop computers as an owner's withdrawal. |
| | D) | The (1) end-of-the period closing entries and (2) the purchase of office supplies for cash. |
| | E) | None of the above. |
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| 7 | |
A company is required to collect 6% state sales tax on all sales made to its customers. The company decides to add a column for Sales Tax Collected to record the sales tax charged to its customers. Into which of the following journals will the Sales Tax Collected column be added to record such transactions? |
| | A) | Cash Receipts Journal and (2) Cash Disbursements Journal. |
| | B) | Purchases Journal and (2) the Sales Journal. |
| | C) | Cash Receipts Journal and (2) Sales Journal. |
| | D) | Purchases Returns Journal and (2) Purchases Journal. |
| | E) | None of the above. |
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| 8 | |
A company purchases its entire inventory on credit. It initially records the purchase invoice at the full amount shown on the invoice. The company avails itself of all the purchase discounts that are offered by its vendors. Which journal is most likely to have a column to record the purchase discounts taken? |
| | A) | Cash Receipts Journal. |
| | B) | General Journal. |
| | C) | Cash Disbursements Journal. |
| | D) | Purchases Journal. |
| | E) | Sales Journal. |
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| 9 | |
Which of the following is not one of the five common components of either a manual or a computerized accounting system? |
| | A) | An information storage device such as a hard drive. |
| | B) | An output device such as a printer. |
| | C) | Source documents such as purchase invoices. |
| | D) | Input devices such as flatbed scanners. |
| | E) | All of the above are common components of either a manual or a computerized accounting system. |
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| 10 | |
Which of the following is not an output device in a computerized accounting system? |
| | A) | File folders stored in a metal filing cabinet. |
| | B) | A color monitor. |
| | C) | A laser printer. |
| | D) | Web pages generated by the company's web server. |
| | E) | LCD projectors. |
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| 11 | |
Office supplies were purchased for cash and the entry was recorded in the Cash Disbursements Journal. When a part of these supplies are returned to the vendor, a cash refund was received. The recording of this refund will be made in which special journal? |
| | A) | Sales Journal. |
| | B) | Cash Receipts Journal. |
| | C) | Purchases Journal. |
| | D) | Cash Disbursements Journal. |
| | E) | General Journal. |
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| 12 | |
When an accounting information system delivers useful, understandable, timely, and pertinent information for effective decision making, which accounting information system principle is being followed? |
| | A) | Cost-benefit. |
| | B) | Flexibility. |
| | C) | Compatibility. |
| | D) | Relevance. |
| | E) | Control. |
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| 13 | |
An accounting information system that has been designed and operates in conformance with a firm's activities, personnel, and structure follows which of the following principles of accounting information systems? |
| | A) | Flexibility. |
| | B) | Compatibility. |
| | C) | Consistency. |
| | D) | Control. |
| | E) | Relevance. |
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| 14 | |
Companies benefit from ERP because: |
| | A) | ERP helps the company manage its vital operations. |
| | B) | ERP can speed decision making. |
| | C) | ERP lets companies share data with customers and suppliers. |
| | D) | All of the above. |
| | E) | None of the above. |
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| 15 | |
The advantage of batch processing is: |
| | A) | It enters data as soon as source documents are available. |
| | B) | It requires only periodic updating of databases. |
| | C) | It processes data as soon as source documents are available. |
| | D) | All of the above are advantages. |
| | E) | None of the above are advantages. |
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