29) Cash disbursement journals also are known as ________.
A) sales journals
B) purchases journals
C) cash receipts journals
D) cash payments journals
30) In a perpetual inventory system, which of the following are debit columns in a typical cash payments
journal?
A) Merchandise Inventory column and Cash column
B) Other Accounts column and Accounts Payable column
C) Merchandise Inventory column and Accounts Payable column
D) Other Accounts column and Cash column
31) In a perpetual inventory system, the credit columns of a typical cash payments journal are ________.
A) Merchandise Inventory column and Cash column
B) Other Accounts column and Accounts Payable column
C) Merchandise Inventory column and Accounts Payable column
D) Other Accounts column and Cash column
32) On May 31, a retail firm pays rent of $2700 for the month of May. When this transaction is recorded in
the cash payments journal, ________.
A) assets and equity will increase by $2700
B) assets and liabilities will decrease by $2700
C) assets and equity will decrease by $2700
D) liabilities and equity will increase by $2700
33) Which of the following is true of posting entries from a cash payments journal?
A) Entries in the cash payments journal are posted monthly to the accounts payable subsidiary ledger
and daily to the general ledger.
B) The postings of accounts payable are credits and increase the balance in the individual accounts
payable account.
C) After posting the payment of accounts payable, a check mark is entered in the cash payments journal
and the posting reference is printed in the subsidiary ledger.
D) At the end of the month, each column is totaled and the totals, including the Other Accounts DR
column, are posted to the specific general ledger accounts.
34) Describe the transactions recorded in the cash payments journal.
35) Silver Corporation had the following transactions:
Jan 4
Issued check no. 430 to purchase equipment for cash, $2,200.
9
Purchased merchandise inventory for cash, $400, issuing check no. 431.
19
Paid Kale Co. amount owed, $1,025, less $60 discount. Issued check no. 432.
27
Issued check no. 433 to pay utilities, $210. The bill was just received, and there is no
liability recorded.
Use the following cash payments journal to record the preceding transactions. The company uses the
perpetual inventory system.
Cash Payments Journal Page 8
Date
Ck.
No.
Account
Debited
Post.
Ref.
Other
Accounts
DR
Accounts
Payable
DR
Merchandise
Inventory CR
Cash CR
Date
Ck.
No.
Account Debited
Post.
Ref.
Other
Accounts
DR
Accounts
Payable
DR
Merchandise
Inventory CR
Cash CR
Jan. 4
430
Equipment
2,200
2,200
9
431
Merchandise Inventory
400
400
19
432
Kale Co.
1,025
60
965
27
433
Utilities Expense
210
210
Diff: 3
LO: APP. B-3
AACSB: Application of knowledge
AICPA Functional: Measurement
PE Question Type: Application
H2: The Cash Payments Journal
36) All transactions are recorded in either one of the special journals or in the general journal, but not
both.
37) Because companies use special journals, the use of the General Journal is optional.
38) Which of the following will be recorded in the general journal when using a manual accounting
information system?
A) adjusting and closing entries
B) payment of accounts payable
C) purchase of merchandise inventory on account
D) sale of merchandise inventory on account
39) Which of the following is true of the general journal?
A) All transactions recorded in one of the special journals are also recorded in the general journal.
B) Manual accounting information systems do not need the general journal.
C) The adjusting entries and the closing entries are recorded in the general journal.
D) Non-routine transactions are generally not recorded in the general journal.
40) If there is no cash involved in a business transaction, the transaction should be recorded in ________.
A) either the cash receipts journal or general journal
B) either the sales journal or purchases journal
C) the general journal only
D) sales journal, purchases journal, or general journal
41) If there is cash involved in a business transaction, the transaction should be recorded in either the
________.
A) cash payments journal or cash receipts journal
B) cash payments journal or general journal
C) cash payments journal or cash receipts journal and in general journal
D) sales journal or purchases journal
42) Copper Corporation had the following transactions:
Mar. 3
Sold merchandise inventory on account to L. Navarro, issuing invoice no. 501 for $1,100
(cost, $890).
22
Purchased merchandise inventory on credit terms of 3/10, n/30 from Circus Co., $800.
27
31
Returned damaged merchandise inventory to Circus Co., issuing a debit memo for $800.
Recorded March depreciation of $2,400.
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.
Accounts Payable—Circus Company
Merchandise Inventory
Mar 31
Depreciation Expense
43) Rockville Corporation makes a $1,200 purchase of merchandise inventory on account. This transaction
will be recorded in the ________.
A) cash payments journal
B) sales journal
C) cash receipts journal
D) purchases journal
44) St. Petersburg Corporation makes a $1,200 purchase of merchandise inventory for cash. This
transaction will be recorded in the ________.
A) cash payments journal
B) general journal
C) cash receipts journal
D) purchase journal
45) For each of the following transactions, state which special journal should be used to record the
transaction. In addition, state which columns will be used.
Transaction 1: Freeworld Co. paid $1,500 for monthly utilities, on the date the bill was received.
Which special journal?
Which columns are used to record the transaction?
Transaction 2: Wideworld Co. purchased office supplies on account.
Which special journal?
Which columns are used to record the transaction?
Transaction 3: Wonderworld Co. sold $5,000 of merchandise inventory to A. Allen, on account. The cost
of the merchandise inventory was $3,200. The company uses a perpetual inventory system.
Which special journal?
Which columns are used to record the transaction?
Transaction 4: Oneworld Co. borrowed $10,000 from World National Bank.
Which special journal?
Which columns are used to record the transaction?
Learning Objective APP. B-4
1) Hardware is electronic equipment that includes computers, monitors, printers, and the network that
connects them.
2) In a networked system, the server stores the program and the data.
3) What are the two basic components of a computerized accounting information system?
A) sales journal and purchase journal
B) hardware and software
C) cash payments journal and cash receipts journal
D) network and cloud computing
4) Which of the following is true of a network?
A) It connects a computer‘s hardware to the software.
B) It does not link computers.
C) It is the same as software.
D) It allows different computers to share the same information.