Q&A Hero

Q: Subsidiary ledgers provide all the following benefits except: A. Remove excessive detail from the general ledger. B. Provide up-to-date information on customer or other specific account balances. C. Aid in error identification for individual accounts. D. Help with division of labor (recordkeeping tasks). E. Allow users to record any transactions.

Q: The use of an Accounts Payable controlling account: A. Reduces the number of accounts in the subsidiary ledger. B. Reduces the total number of accounts maintained. C. Reduces the number of entries in the general journals. D. Reduces the number of accounts in the general ledger. E. Increases the number of columns in the journals.

Q: An accounts receivable ledger is: A. A subsidiary ledger that contains an account for each credit customer. B. A list of the balances of selected accounts in the accounts receivable ledger that is added to show the total amount of the significant accounts receivable outstanding. C. A book of original entry that is designed and used for recording only a specified type of transaction. D. The ledger that contains the financial statement accounts of a business. E. A subsidiary ledger that contains a separate account for each creditor (supplier) to the company.

Q: Assume that a company uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal. A sales return for credit on account would be recorded in the: A. Sales journal B. General journal C. Cash receipts journal D. Accounts receivable ledger E. Cash disbursements journal

Q: An accounts payable ledger is: A. A subsidiary ledger that contains an account for each of the companys suppliers. B. A list of the balances of all the accounts in the accounts receivable ledger that is added to show the total amount of accounts receivable outstanding. C. A book of original entry that is designed and used for recording only a specific type of transaction. D. The ledger that contains the financial statement accounts of a business. E. A subsidiary ledger that contains a separate account for each party that grants both short-term and long-term credit on account to the company.

Q: A subsidiary ledger that contains a separate account for each supplier of the company is a(n): A. Controlling account B. Accounts receivable ledger C. Accounts payable ledger D. General ledger E. Special journal

Q: A subsidiary ledger: A. Includes transactions not covered by special journals. B. Is a listing of all of the accounts of a business. C. Is a listing of individual accounts with a common characteristic. D. Is also called a general ledger. E. Is also called a special journal.

Q: The ledger that contains the financial statement accounts of a company is the: A. General ledger B. General journal C. Special ledger D. Special journal E. Column balance ledger

Q: When a company uses special journals, the general journal is used for selected transactions and events including: A. Recording adjusting transactions. B. Posting transactions to special journals. C. Accumulating debits and credits. D. Collecting detailed listings of amounts. E. Recording cash receipts.

Q: A book of original entry that is used to record and post transactions of a similar type is a: A. Schedule B. Columnar ledger C. Special journal D. General journal E. Subsidiary ledger

Q: The purchases journal is used for recording: A. Credit purchases B. Credit sales C. Cash sales D. Cash purchases E. Cash disbursements

Q: The sales journal is used for recording: A. Credit purchases B. Credit sales C. Cash sales D. Cash purchases E. All Sales

Q: The special journals of many accounting systems include all the following except: A. Sales journal B. General ledger C. Purchases journal D. Cash receipts journal E. Cash disbursements journal

Q: Information processors: A. Include information storage. B. Interpret, transform, and summarize information for use in analysis and reporting. C. Are components of an accounting system that keep data in accessible form. D. Are the means to take information out of an accounting system and make it available to users. E. Include scanners.

Q: Output devices include all of the following except: A. Printers B. Monitors C. LCD projectors D. Web communication E. General journals

Q: Information storage: A. Eliminates the need for professional judgment. B. Keeps data in a form accessible to information processors. C. Provides the basic information processed by an accounting system. D. Captures information from source documents. E. Is always in electronic format.

Q: Input devices include: A. Bar-code readers B. Printers C. Software D. Ledgers E. Database files

Q: Source documents: A. Are input devices. B. Provide the basic information processed by an accounting system. C. Cannot be electronic files. D. Store processed information for future use. E. Provide systems that interpret, transform and summarize data.

Q: The basic components of an accounting information system include all but which of the following? A. Source documents B. Input devices C. Cell phones D. Information processors E. Information storage

Q: The five fundamental principles of accounting information systems are: 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-benefit.

Q: The accounting principle that requires an accounting information system to report useful, understandable, timely, and pertinent information for effective decision-making is the: A. Control principle B. Compatibility principle C. Relevance principle D. Flexibility principle E. Cost-benefit principle

Q: The flexibility principle of accounting information systems requires that the: A. Benefits from an activity outweigh the costs of the activity. B. System report useful, understandable, timely, and pertinent information for effective decision making. C. System aid managers in controlling and monitoring business activities. D. System adapt to changes in the company, business environment, and needs of decision makers. E. System conform with a company's activities, personnel, and structure.

Q: The control principle for accounting information systems requires that the: A. Benefits from an activity outweigh the costs of the activity. B. System report useful, understandable, timely, and pertinent information for effective decision making. C. System aid managers in controlling and monitoring business activities. D. System adapt to changes in the company, business environment, and needs of decision makers. E. System conform with a company's activities, personnel, and structure.

Q: Internal control procedures do not include: A. Procedures to ensure reliable financial reports. B. Safeguards to protect company assets. C. Methods to achieve compliance with laws and regulation. D. Procedures to guarantee against fraud. E. Policies to direct operations toward common goals.

Q: Effective accounting information systems will do all of the following except: A. Collect data from transactions and events. B. Organize data in useful forms. C. Communicate information to business decision makers. D. Process data from transactions and events. E. Eliminate all errors.

Q: The difference in the sales journal between the perpetual and periodic inventory systems is that a column is used to record cost of goods sold and inventory amounts for each sale under the perpetual system but not the periodic system.

Q: The purchases journal is identical under both the periodic and the perpetual inventory systems.

Q: A company using the periodic inventory system does not record the increase in cost of goods sold and decrease in inventory at the time of each sale in the sales journal.

Q: To check for accuracy after posting: first a trial balance is completed, then the subsidiary ledgers are tested by preparing a schedule of the controlling account.

Q: If the total balance of the accounts receivable ledger equals the total of the controlling Accounts Receivable account, then the accounts are presumed to be correct.

Q: A schedule of accounts receivable is a listing of all creditor accounts and account balances.

Q: Account balances in the general ledger and the subsidiary ledgers should be proved for accuracy after posting is complete.

Q: A procedure called direct posting of sales invoices can substitute for the special sales journal.

Q: 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.

Q: Each transaction recorded in the sales journal yields a debit to Accounts Receivable and a credit to Sales.

Q: Individual transactions in the sales journal are regularly posted to customer accounts in the accounts payable ledger.

Q: Segment information is often useful to investors for evaluating a company's profitability, risk, and growth.

Q: External users of financial statements are generally uninterested in segment information to understand a company's business activities.

Q: Segment return on assets is segment operating income divided by segment average assets.

Q: A business segment is a part of a company that is separately identified by its products or services or by the geographic market it serves.

Q: The SAP enterprise resource planning software is already being used to help direct the operations of many of the world's largest companies.

Q: Most companies use batch processing instead of online processing because batch processing requires continual updating of databases.

Q: Computer networks are links among computers giving different users and different computers access to common databases and programs.

Q: Enterprise resource planning software packages include the programs that manage a company's vital operations.

Q: Off-the-shelf accounting software is not adequate to meet the needs of small businesses.

Q: An advantage of online processing is up-to-date databases.

Q: Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

Q: Equipment, inventory, and investments can each have its own subsidiary ledger.

Q: The accounts payable ledger has a controlling account in the general ledger and a separate subsidiary account for each creditor in the accounts payable ledger.

Q: The accounts payable ledger is used for storing transactions data regarding individual customers.

Q: A subsidiary ledger is a listing of individual accounts with a common characteristic.

Q: Special journals are designed in a manner that is best suited for each business, so good systems design for a business could include collapsing the sales and cash receipts journal into one journal.

Q: Most transactions for merchandising businesses fall into four groups: sales on credit, purchases on credit, cash receipts, and cash disbursements.

Q: When posting from special journals, each debit and credit entry is entered as a separate amount.

Q: The general journal is used for transactions not covered by special journals and for regular, adjusting, closing, and correcting entries.

Q: The purchases journal is used to record cash purchases of merchandise.

Q: A typical sales journal is used to record cash sales.

Q: A special journal is used to record and post transactions of a similar type.

Q: Input devices include journal entries, keyboards, scanners, and modems.

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

Q: Auditors rely on accounting system databases when they audit financial statements and a company's controls.

Q: Accounting information processes are structured to eliminate the need for professional judgment.

Q: With online systems, all information storage should be off-line to protect the data.

Q: With advanced technology there is no need to trace to its source information that has been entered into an accounting information system.

Q: Accurate source documents are crucial to accounting systems to limit the possibility of entering faulty data into the system.

Q: Due to electronic files and web communication, source documents are no longer required.

Q: Accounting information systems are designed to capture information about a company's transactions and events and to provide output including financial, managerial, and tax reports.

Q: The compatibility principle requires that an accounting system report useful, understandable, timely, and pertinent information for effective decision making.

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

Q: Internal controls include policies to direct operations toward common goals, procedures to ensure reliable financial reports, safeguards to protect company assets, and methods to achieve compliance with laws and regulations.

Q: The five basic principles of accounting information systems are control, competency, compatibility, flexibility, and cost-benefit.

Q: Accounting information systems are so accurate that decision makers in practice do not need a basic knowledge of how the systems work.

Q: Accounting information systems collect and process data from transactions and events, organize them in useful forms and communicate results to decision makers.

Q: The difference in the sales journal between the perpetual and periodic inventory systems is a column to record ___________________________ and __________________ for each sale that is used in the perpetual system but not in the periodic.

Q: A _______________________________________ is a listing of accounts from the accounts payable ledger with their balances and the sum of all balances.

Q: Individual transactions in the sales journal are posted regularly to customers' accounts in the ________________________________________.

Q: The _______________________ ratio is a measure of a segment's profitability and is calculated as segment operating income divided by segment average assets.

Q: A ____________________ is a part of a company that is separately identified by its products or services or by the geographic market it serves.

Q: _______________________ are links among computers giving different users and different computers access to common databases and programs.

Q: __________________ processing accumulates source documents for a period of time and then processes them all at once such as daily, weekly, or monthly.