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Exam 7: Accounting Information Systems

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Question 91

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A company purchased equipment costing $32,000 on credit. Identify the journal the transaction would be recorded in.

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

F) B) and D)
G) D) and E)

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Question 92

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

A) True
B) False

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Question 93

Multiple Choice

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

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

Philip Company uses special journals to record transactions. Below are the sales journal and cash receipts journal for Philip. Prepare the following: a. Open an accounts receivable subsidiary ledger having a T-account for each customer. Post the invoices to the subsidiary ledger. b. Open an Accounts Receivable controlling T-Account. Post the end-of the month totals that affect the Accounts Receivable account only. c. Prepare a schedule of accounts receivable and prove that its total equals the Accounts Receivable controlling account balance.

The sales journal is used for recording:

A company uses four special journals: purchases, sales, cash receipts, and cash disbursements. The following transactions were incurred during August: Record these transactions in the appropriate special journals below.

The control principle for accounting information systems requires that the:

Argon Sales uses special journals to record business transactions. Argon sells construction equipment. Argon completed the following transactions a through j. Identify the journal in which each transaction should be recorded.

The Woodview Company uses a sales journal, purchases journal, cash receipts journal, cash disbursements journal, and general journal. They use the periodic inventory method. The following transactions occurred during the month of December:

The Sun Company completed the following sales and cash receipts transactions during the first week of December. The Sun Company uses the perpetual inventory system.

A company records its transactions and events in four special journals and a general journal. The company completed the following transactions a through j. Identify the journal in which each transaction should be recorded.

The following information is available for some of Kalo's segments (all amounts are in millions) a. Determine the segment return on assets for each geographic segment. b. Comment on the results. How do the segments compare with respect to profitability?

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

_____________________ are systems that interpret, transform, and summarize information for use in analysis and reporting.

The basic components of an accounting information system include all of the following except: