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Chapter 7: Accounting Information Systems

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Chapter 7: Accounting Information Systems

27 problems · 0 figures

Multiple Choice 7.1 §7.1 source ↗

So far, computer systems cannot yet ________.
  1. a.
    receive data and instructions from input devices such as a scanner.
  2. b.
    decide how to record a business transaction.
  3. c.
    communicate with other computers electronically.
  4. d.
    recognize that you made a mistake entering $100 when you meant to enter $101.

Answer

D. recognize that you made a mistake entering $100 when you meant to enter $101.

Multiple Choice 7.3 §7.1 source ↗

Source documents ________.
  1. a.
    are input devices
  2. b.
    are output devices
  3. c.
    do not have to be on paper
  4. d.
    cannot be electronic files

Answer

C. do not have to be on paper

Multiple Choice 7.5 §7.1 source ↗

A document that asks you to return an identifying part of it with your payment is a(n) ________.
  1. a.
    source document
  2. b.
    cloud document
  3. c.
    point-of-sale document
  4. d.
    turn-around document

Answer

D. turn-around document

Multiple Choice 7.7 §7.2 source ↗

An unhappy customer just returned $50 of the items he purchased yesterday when he charged the goods to the company’s store credit card. Which special journal would the company use to record this transaction?
  1. a.
    sales journal
  2. b.
    purchases journal
  3. c.
    cash receipts journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

E. general journal

Multiple Choice 7.9 §7.2 source ↗

A customer just charged $150 of merchandise using MasterCard. Which special journal would the company use to record this transaction?
  1. a.
    sales journal
  2. b.
    purchases journal
  3. c.
    cash receipts journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

C. cash receipts journal

Multiple Choice 7.11 §7.2 source ↗

Your company paid rent of $1,000 for the month with check number 1245. Which journal would the company use to record this?
  1. a.
    sales journal
  2. b.
    purchases journal
  3. c.
    cash receipts journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

D. cash disbursements journal

Multiple Choice 7.13 §7.2 source ↗

Received a check for $72 from a customer, Mr. White. Mr. White owed you $124. Which journal would the company use to record this transaction?
  1. a.
    sales journal
  2. b.
    purchases journal
  3. c.
    cash receipts journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

C. cash receipts journal

Multiple Choice 7.15 §7.2 source ↗

Sold goods for $650 cash. Which journal would the company use to record this transaction?
  1. a.
    sales journal
  2. b.
    purchases journal
  3. c.
    cash receipts journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

C. cash receipts journal

Multiple Choice 7.17 §7.3 source ↗

Sold goods for $650, credit terms net 30 days. Which journal would the company use to record this transaction?
  1. a.
    sales journal
  2. b.
    purchases journal
  3. c.
    cash receipts journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

A. sales journal

Multiple Choice 7.19 §7.3 source ↗

The sum of all the accounts in the accounts receivable subsidiary ledger should ________.
  1. a.
    equal the accounts receivable account balance in the general ledger before posting any amounts
  2. b.
    equal the accounts payable account balance in the general ledger before posting any amounts
  3. c.
    equal the accounts receivable account balance in the general ledger after posting all amounts
  4. d.
    equal the cash account balance in the general ledger after posting all amounts

Answer

C. equal the accounts receivable account balance in the general ledger after posting all amounts

Multiple Choice 7.21 §7.3 source ↗

You just posted a debit to ABC Co. in the accounts receivable subsidiary ledger. Which special journal did it come from?
  1. a.
    sales journal
  2. b.
    cash receipts journal
  3. c.
    purchases journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

A. sales journal

Multiple Choice 7.23 §7.3 source ↗

You just posted a debit to Cash in the general ledger. Which special journal did it come from?
  1. a.
    sales journal
  2. b.
    cash receipts journal
  3. c.
    purchases journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

B. cash receipts journal

Multiple Choice 7.25 §7.3 source ↗

You just posted a credit to Sales and a debit to Cash. Which special journal did it come from?
  1. a.
    sales journal
  2. b.
    cash receipts journal
  3. c.
    purchases journal
  4. d.
    cash disbursements journal
  5. e.
    general journal

Answer

B. cash receipts journal

Multiple Choice 7.27 §7.5 source ↗

Which of the following is not a way to prevent your computer from being attacked by ransomware?
  1. a.
    making sure your antivirus security programs are up to date
  2. b.
    opening all attachments from emails from unknown senders
  3. c.
    using secure (password protected) networks and backing up your files regularly
  4. d.
    not using open Wi-Fi (nonpassword, nonencrypted) in public locations

Answer

B. opening all attachments from emails from unknown senders

Multiple Choice 7.29 §7.5 source ↗

Artificial intelligence refers to ________.
  1. a.
    tutorials that can make humans smarter than they naturally are
  2. b.
    programming computers to mimic human reasoning and perform tasks previously performed by humans
  3. c.
    humans that do not possess reasonably high IQs
  4. d.
    a concept that exists only in science fiction but has not yet been achieved today

Answer

B. programming computers to mimic human reasoning and perform tasks previously performed by humans

Multiple Choice 7.31 §7.5 source ↗

Which of the following is not true about cybercurrency?
  1. a.
    Bitcoin is one of several cybercurrencies.
  2. b.
    It is an alternate currency that does not go through the banking system.
  3. c.
    It does not involve the actual exchange of physical currency.
  4. d.
    All of these statements regarding Bitcoin are correct.

Answer

D. All of these statements regarding Bitcoin are correct.

Question 7.1 §7.1 source ↗

Why does a student need to understand how to use a manual, paper-based accounting information system since everyone uses computerized systems?

Answer

A computerized accounting information system performs the same steps in the accounting cycle as a manual accounting system. Therefore, understanding how a manual system works helps us understand what a computerized system does. We cannot take a computer apart and show how the accounting information fits together, but we can show the different pieces in a paper-based system. We want an accounting information system to be more than just a black box.

Question 7.3 §7.1 source ↗

Why are scanners better than keyboards?

Answer

Scanners can input data faster and typically would produce fewer input errors.

Question 7.5 §7.1 source ↗

Which area of accounting needs a computerized accounting information system the most—payroll, tax, or preparing financial statements?

Answer

All of these areas need an accounting information system. Keeping up with all of the data for an entire year without it would be difficult. Some companies have their own accounting information to process all of their transactions except for payroll. They sometimes use a payroll processing company that specializes in processing payroll transactions for many companies. However, that payroll company also uses computers.

Question 7.7 §7.4 source ↗

Which special journals also require an entry to a subsidiary ledger?

Answer

Any special journal can require an entry to the subsidiary ledger if the entry involves accounts receivable or accounts payable.

Question 7.9 §7.4 source ↗

How often do we post the cash column in the cash receipts journal to the subsidiary ledger?

Answer

The cash column is not posted to the subsidiary ledger. Only the accounts receivable and accounts payable columns are posted to the subsidiary ledgers.

Question 7.11 §7.4 source ↗

Which amounts do we post daily and which do we post monthly?

Answer

Any amounts posted to Accounts Receivable or Accounts Payable should be posted daily (to the subsidiary ledger), and the account totals should be posted monthly. We also post the accounts in the Other Accounts column individually and may post daily or at the end of the month. We post all other total column amounts monthly.

Question 7.13 §7.4 source ↗

Name the four main special journals.

Answer

The four main special journals are sales journal, purchases journal, cash receipts journal, and cash disbursements journal.

Question 7.15 §7.4 source ↗

The purchase of equipment for cash would be recorded in which special journal?

Answer

We would record the purchase of equipment for cash in the cash disbursements journal.

Question 7.17 §7.4 source ↗

When should entries from the sales journal be posted?

Answer

We post entries from the sales journal daily to the accounts receivable subsidiary ledger but monthly to Sales and to the Accounts Receivable general ledger account.

Question 7.19 §7.4 source ↗

We record purchases of inventory for cash in which journal(s)?

Answer

We record purchases of inventory for cash in the cash disbursements journal.

Question 7.21 §7.5 source ↗

Forensic means “suitable for use in a court of law.” How does that have anything to do with accounting?

Answer

Forensic accountants analyze a company’s transactions to determine if a crime has been committed. If they find evidence, they can testify in court as to their findings.

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Problems and answers are adapted from Principles of Accounting, Volume 1: Financial Accounting by Mitchell Franklin, Patty Graybeal and Dixon Cooper, OpenStax, and are used under the CC BY-NC-SA 4.0 licence. Access for free at https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters. Illustrations: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license. This adaptation is released under the same licence, is non-commercial, and is neither affiliated with nor endorsed by OpenStax or Rice University.