Name:
Class:
Date:
Indicate whether the statement is true or false.
1. Even when special journals are used, a personal withdrawal of cash is recorded in the general journal.
a.
True
b.
False
2. Systems analysis is the final phase in the creation or revision of an accounting system.
a.
True
b.
False
3. Even when special journals are used, purchases of store equipment on account are recorded in the general journal.
a.
True
b.
False
4. The use of subsidiary ledgers is limited to accounts payable and accounts receivable.
a.
True
b.
False
5. Businesses can only be segmented by type of customer.
a.
True
b.
False
6. The presence of a subsidiary ledger requires the presence of a summarizing control account in the general ledger.
a.
True
b.
False
7. Adjusting journal entries are recorded in a special journal.
a.
True
b.
False
8. In computerized accounting systems, reports may be generated at any time.
a.
True
b.
False
9. The purchase of supplies for cash would be recorded in the purchases journal.
a.
True
b.
False
10. Purchases journals will have an Other Accounts Cr. column.
a.
True
b.
False
11. Transactions must first be recorded in the general journal before they can be entered in specialized journals.
a.
True
b.
False
Name:
Class:
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12. In a computerized accounting system, all postings happen automatically at the end of the month.
a.
True
b.
False
13. Generally, subsidiary ledgers are used for general ledger accounts that consist of a large number of individual items.
a.
True
b.
False
14. Specialized journals are books of original entry.
a.
True
b.
False
15. The term B2C refers to transactions conducted between two companies.
a.
True
b.
False
16. Processing methods are the means by which the system collects, summarizes, and reports accounting information.
a.
True
b.
False
17. An accounting system design consists of internal controls and information processing methods.
a.
True
b.
False
18. The customers subsidiary ledger is controlled by the general ledger account entitled Accounts Payable.
a.
True
b.
False
19. The Other Accounts column in the cash payments journal is used for recording debits to any account for which there is
no specialized debit column.
a.
True
b.
False
20. E-commerce provides additional business opportunities but at the cost of reduced speed and efficiency.
a.
True
b.
False
21. Services provided for cash are recorded in the revenue journal.
a.
True
b.
False
22. When specialized journals are used, the general journal is not necessary.
a.
True
b.
False
23. Most accounting systems evolve as the business grows and requires changes in its methods for collecting,
Name:
Class:
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accumulating, and reporting information.
a.
True
b.
False
24. Accounting systems evolve through a three-step process: analysis, design, and feedback.
a.
True
b.
False
25. When a large number of individual accounts with a common characteristic are grouped together in a separate ledger,
the summarizing account in the general ledger is called a control account.
a.
True
b.
False
26. The principal ledger that contains all the balance sheet and income statement accounts is the general ledger.
a.
True
b.
False
27. The accounts receivable subsidiary ledger is an example of a special journal.
a.
True
b.
False
28. The columns included in special journals are standardized for all businesses.
a.
True
b.
False
29. The Post. Ref. column of the revenue journal will reference the account number of the customer.
a.
True
b.
False
30. A control account is used to record the details of the individual subsidiary accounts.
a.
True
b.
False
31. The receipt of cash for the monthly rental of unused office space would be recorded in the revenue journal.
a.
True
b.
False
32. The total of the accounts receivable subsidiary accounts and the balance of the accounts receivable control account
should equal each other at the end of the period.
a.
True
b.
False
33. Designing a system to meet user needs is the final phase in the creation or revision of an accounting system.
a.
True
b.
False
Name:
Class:
Date:
34. Using the Internet to perform business transactions is called e-commerce.
a.
True
b.
False
35. The total on the “Accounts Payable Creditor Balances” report at January 31, the end of the first month of operations,
agrees with the total of the Accounts Payable Dr. column in the cash payments journal for the same period.
a.
True
b.
False
36. Services provided on account are recorded in the revenue journal.
a.
True
b.
False
37. Even when special journals are used, closing journal entries are recorded in the general journal.
a.
True
b.
False
38. The customers ledger and the creditors ledger refer to subsidiary ledgers.
a.
True
b.
False
39. One way to report revenue earned by a company is to present it by the different segments of the business.
a.
True
b.
False
40. Once an accounting system has been implemented, feedback will be used to continuously analyze and improve the
system.
a.
True
b.
False
41. The basic procedure of posting from a revenue journal is to make all postings at the end of the month.
a.
True
b.
False
42. An account for each supplier of merchandise will appear in the accounts payable subsidiary ledger.
a.
True
b.
False
43. Computerized accounting systems prevent all journalizing errors.
a.
True
b.
False
44. The Other Accounts column in the cash receipts journal is used for recording debits to any account for which there is
no special debit column.
a.
True
b.
False
Name:
Class:
Date:
45. The methods and procedures for collecting, classifying, summarizing, and reporting a business’s financial and
operating information are called the accounting system.
a.
True
b.
False
46. The revenue journal is designed for the efficient recording of cash sales transactions.
a.
True
b.
False
47. The format and number of specialized journals that a business uses depend upon the legal organization of the business.
a.
True
b.
False
48. Posting from a revenue journal to the customer account is normally done only at the end of the month.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
49. A purchase of supplies on account is recorded in the
a.
revenue journal
b.
general journal
c.
purchases journal
d.
cash payments journal
50. Which of the following is always recorded in the general journal?
a.
services rendered for cash
b.
end-of-period adjusting entries
c.
purchases of equipment on account
d.
purchases of equipment for cash
51. The controlling account in the general ledger that summarizes the individual customer accounts in the subsidiary
ledger is entitled
a.
Purchases
b.
Accounts Payable
c.
Fees Earned
d.
Accounts Receivable
52. When using a purchases journal,
a.
all cash and credit purchases are recorded in the journal
b.
posting to creditor accounts is only done at the end of the month
c.
the “Other Accounts” total is posted to Accounts Payable at month’s end
d.
there will always be an “Accounts Payable Cr.” column
Name:
Class:
Date:
53. The following is an example of
Increase (Decrease)
Segment
Current Year
Prior Year
Amount
Percent
College textbooks
$ 78,000
$ 55,000
$ 23,000
41.8%
High school textbooks
129,000
115,000
14,000
12.2
Elementary school textbooks
105,000
121,000
(16,000)
(13.2)
Total revenues
$312,000
$291,000
$ 21,000
7.2
a.
product analysis
b.
vertical analysis
c.
horizontal analysis
d.
percentage analysis
54. Which of the following statements is false?
a.
Most computerized accounting systems use principles from manual systems.
b.
Subsidiary ledgers and special journals are only useful when a business doesn’t have a large number of similar
transactions.
c.
Even small companies use computerized accounting systems.
d.
Large companies often integrate their accounting system with their automated business systems.
55. When Richard Miller purchases a fishing pole through Amazon.com, he is utilizing
a.
B1C e-commerce
b.
B2B e-commerce
c.
B2C e-commerce
d.
B1B e-commerce
56. Every controlling account must have its own
a.
revenue ledger
b.
general ledger
c.
subsidiary ledger
d.
journal
57. Month-end postings to control accounts in a computerized accounting system are not required because
a.
control accounts are not used in computerized systems
b.
transactions are posted to accounts immediately
c.
the input operator can choose to post to accounts at any time
d.
transactions are posted at the end of the financial year
58. Which of the following is not part of a three-step process that a growing business uses for the evolution of its
accounting system?
a.
analysis
b.
design
c.
implementation
d.
feedback
Name:
Class:
Date:
59. A basic manual accounting system includes all of the following except a
a.
chart of accounts
b.
two-column journal
c.
general ledger
d.
computer on which the system runs
60. Each individual entry in the revenue journal is posted to the
a.
accounts receivable controlling account
b.
accounts receivable subsidiary ledger
c.
revenue controlling account
d.
accounts receivable subsidiary ledger and the controlling account
61. An “Accounts Receivable Customer Balances” report shows
a.
revenues by customer for a specified date range
b.
customer balances owed as of a specific date
c.
cash payments to creditors for a specific date range
d.
sales by customer as of a specific date
62. An owner transfers a personal automobile to the company with a fair market value of $12,000. The entry will be made
in the
a.
purchases journal
b.
cash payments journal
c.
cash receipts journal
d.
general journal
63. Computerized accounting systems
a.
are only used by medium- and large-sized companies
b.
are generally not as accurate as manual systems
c.
record and post transactions at the same time
d.
must make use of special journals
64. Mocha Coffee Shop has asked the accountant to keep track of the purchases for beverage, food, and retail items. The
accountant has implemented a purchases journal. Which of the following columns should be included in the new
purchases journal?
a.
Accounts Payable Cr., Beverage Supplies Dr., Food Supplies Dr., Retail Items Dr., Other Accounts Dr.
b.
Accounts Payable Dr., Other Accounts Dr., Beverage Supplies Cr., Food Supplies Cr., Retail Items Cr.
c.
Beverage Supplies Dr., Food Supplies Dr., Retail Items Dr., Other Accounts Dr., Cash Cr.
d.
Beverage Supplies Dr., Food Supplies Dr., Retail Items Dr., Other Accounts Cr., Accounts Payable Dr.
65. Which of the following best describes the action necessary to record a sale on account with QuickBooks®?
a.
Open and complete a “receive payment” form.
b.
Open and complete an electronic invoice form.
c.
Open the QuickBooks revenue journal and enter the transaction.
d.
Open the QuickBooks general ledger and post the transaction directly to the affected accounts.
Name:
Class:
Date:
66. The three phases of setting up an accounting system in correct order are
a.
design, implementation, analysis
b.
analysis, design, implementation
c.
design, analysis, implementation
d.
implementation, design, analysis
67. A withdrawal of cash made by the owner will be found in the
a.
cash receipts journal
b.
cash payments journal
c.
revenue journal
d.
purchases journal
68. The following cash receipts journal headings have been suggested for Tower Tree-Trimming Service Company.
Which of the following statements is false?
Date
Account
Debited
Post.
Ref.
Accounts
Receivable Cr.
Cash
Cr.
Other Accounts
Dr.
a.
The second column should be Account Credited.
b.
The Cash column should be a debit.
c.
The Other Accounts column should be a credit.
d.
The Accounts Receivable column should be a debit.
69. The subsidiary ledger that includes customer account activity is called the
a.
asset ledger
b.
accounts payable ledger
c.
expense ledger
d.
accounts receivable ledger
70. The cash receipts journal will be used for
a.
only cash received from customers on account
b.
all cash received for any purpose
c.
cash received from customers on account and cash sales
d.
only cash received from cash sales
71. A cash purchase of supplies should be recorded in the
a.
cash receipts journal
b.
purchases journal
c.
general journal
d.
cash payments journal
72. When posting column totals in the purchases journal, a credit should be posted to
a.
Merchandise Inventory
b.
Accounts Payable
Name:
Class:
Date:
c.
Sales Returns and Allowances
d.
Cash
73. The total on the “Cash Receipts” report generated by QuickBooks® software at January 31 would be equal to the
a.
total revenue earned for the month of January
b.
total of the purchases journal on January 31
c.
total of the Cash Dr. column of the cash receipts journal in a manual system
d.
balance in Accounts Receivable at January 31
74. A cash investment made by the owner should be recorded in the
a.
cash receipts journal
b.
purchases journal
c.
cash payments journal
d.
revenue journal
75. After an accounting system has been set up, what is the next step?
a.
Create the chart of accounts.
b.
Obtain input from users to analyze and improve the system.
c.
Implement analysis and design.
d.
Set up internal controls.
76. Which of the following is not a special journal?
a.
cash receipts journal
b.
purchases journal
c.
accounts receivable journal
d.
cash payments journal
77. The primary ledger containing all of the balance sheet and income statement accounts is the
a.
general ledger
b.
creditors ledger
c.
customers ledger
d.
subsidiary ledger
78. The goal of systems design is to
a.
determine when to implement a system
b.
meet user needs
c.
determine the size of the competitor’s system
d.
make changes to the present system
79. Beachside Coffee Shop, in an effort to streamline its accounting system, has decided to utilize a cash receipts journal
in its operations. If the company records the cash sale of food for $18, which is the correct entry?
a.
Cash Cr., $18; Food Revenue Dr., $18
b.
Cash Dr., $18; Food Revenue Dr., $18
c.
Cash Dr., $18; Food Revenue Cr., $18
Name:
Class:
Date:
d.
Cash Cr., $18; Food Revenue Cr., $18
80. Computerized accounting systems
a.
provide a tedious form of record keeping
b.
improve the timeliness of reporting
c.
prevent all journalizing errors
d.
are only used in medium and large businesses
81. Which of the following journals is called an all-purpose journal?
a.
general journal
b.
purchases journal
c.
revenue journal
d.
accounting journal
82. If the individual subsidiary ledger accounts contained the following data:
Cadence Company, Vendor, $200, credit balance
Franklin Enterprises, Customer, $750, debit balance
Marcelo Construction, Client, $125, debit balance
Peyton Supplies, Supplier, $375, credit balance
The accounts receivable (A/R) control account and the accounts payable (A/P) control account balances would be
a.
A/R, $1,375; A/P, $375
b.
A/R, $525; A/P, $175
c.
A/R, $875; A/P, $575
d.
A/R, $750; A/P, $700
83. Which of the following transactions is recorded in the revenue journal?
a.
sale of excess office equipment for cash
b.
rendering services for cash
c.
rendering services on account
d.
sale of excess office equipment on account
84. Which of the following transactions is recorded in the purchases journal?
a.
purchase of store supplies on account
b.
return of damaged office equipment
c.
purchase of store supplies for cash
d.
purchase of office equipment for cash
85. A purchase of supplies for cash is recorded in the
a.
revenue journal
b.
purchases journal
c.
cash receipts journal
d.
cash payments journal
86. The means by which the accounting system collects, summarizes, and reports accounting information is called
information
Name:
Class:
Date:
a.
reporting methods
b.
accounting methods
c.
control methods
d.
processing methods
87. Some of the more common subsidiary ledgers are
a.
accounts payable, accounts receivable, and owner’s equity subsidiary ledgers
b.
accounts receivable and accounts payable subsidiary ledgers
c.
accounts receivable, accounts payable, cash, checking, petty cash, and owner’s equity subsidiary ledgers
d.
cash and owner’s equity subsidiary ledgers
88. If a company uses special journals,
a.
it must have one for cash, receivables, and payables
b.
it may have no more than four
c.
the quantity and design depend on the needs of the company
d.
the design must comply with the FASB requirements
89. In addition to B2B and B2C transactions, the Internet is commonly used in all of the following business activities
except
a.
supply chain management
b.
regulatory compliance management
c.
customer relationship management
d.
product life-cycle management
90. Which of the following is recorded in the cash receipts journal?
a.
cash withdrawn by the owner
b.
cash purchase of equipment
c.
cash received on customer’s account
d.
adjusting entry for depreciation
91. In which journal is the return of supplies purchased on account recorded?
a.
general journal
b.
cash receipts journal
c.
cash payments journal
d.
purchases journal
92. The phase of accounting system installation in which the information needs of people in the organization are taken
into account is
a.
analysis
b.
design
c.
implementation
d.
installation
93. Segment data
a.
can be used for vertical, but not horizontal analysis
Name:
Class:
Date:
b.
is gathered from invoices entered into the accounting system
c.
is only useful by product line
d.
analysis is required by GAAP
94. Which of the following is not one of the three phases needed when changing an accounting system, either in its
entirety or in part?
a.
analysis
b.
design
c.
review
d.
implementation
95. The adjustment for supplies used during the period would be recorded in the
a.
general journal
b.
purchases journal
c.
cash payments journal
d.
cash receipts journal
96. In which journal would adjusting entries be found?
a.
cash receipts journal
b.
cash payments journal
c.
general journal
d.
purchases journal
97. At the end of the month, the total of the amount column of the revenue journal is posted as a
a.
debit to Accounts Receivable and a credit to Cash
b.
debit to Accounts Receivable and a credit to Fees Earned
c.
debit to Cash and a credit to Fees Earned
d.
debit to Cash and a credit to Accounts Payable
98. Which of the following is true about the revenue journal?
a.
Cash revenues and revenues on account are recorded in the revenue journal.
b.
Only cash revenues are recorded in the revenue journal.
c.
Only revenues on account are recorded in the revenue journal.
d.
Unearned revenues are also recorded in the revenue journal.
99. The following is an example of
Current Year
Prior Year
Segment
Amount
Percent
Amount
Percent
College textbooks
$ 78,000
25.0%
$ 55,000
18.9%
High school textbooks
129,000
41.3
115,000
39.5
Elementary school textbooks
105,000
33.7
121,000
41.6
Total revenues
$312,000
100.0%
$291,000
100.0%
a.
product analysis
Name:
Class:
Date:
b.
vertical analysis
c.
horizontal analysis
d.
percentage analysis
100. Connie’s Specialties Inc. offers exclusive interior design services. The following revenue information was determined
from Connie’s records.
Current Year
Prior Year
Consultation services
$1,000,000
$ 800,000
Design services
1,800,000
1,500,000
Using a horizontal analysis, which is correct?
a.
Consultation services showed an increase in revenue of 25%.
b.
Consultation services showed a decrease in revenue of 25%.
c.
Design services showed an increase in revenue of 25%.
d.
Design services showed a decrease in revenue of 25%.
101. When posting the column totals of a cash payments journal, a debit should be posted to
a.
Cash
b.
Accounts Payable
c.
Sales Discounts
d.
Unearned Revenue
102. Which of the following is recorded in the cash payments journal?
a.
adjusting entry for accrued salaries
b.
receipt of cash on supplies returned
c.
receipt of cash from services rendered
d.
payment of employees’ salaries
103. Snelling Company does business in two regional segments: North and South. The following annual revenue
information was determined from the accounting system’s invoice data:
Segment
Current Year
Prior Year
North
$ 75,000
$100,000
South
260,000
220,000
Total revenues
$335,000
$320,000
Using horizontal analysis, determine the percentage change in revenues for the South region.
Round to one decimal place.
a.
18.2%
b.
84.6%
c.
(18.2)%
d.
15.4%
104. E-commerce
a.
accounts for less than 1% of all retail sales
b.
only relates to transactions between a company and a consumer
Name:
Class:
Date:
c.
can improve the speed and efficiency of transactions
d.
increases paperwork
105. Which of the following general ledger accounts normally has a subsidiary ledger?
a.
Owner’s Capital
b.
Drawing
c.
Supplies
d.
Accounts Payable
106. A computerized accounting system will not allow which of the following types of journalizing errors?
a.
entering an amount in an incorrect account
b.
reversing the debit and credit accounts in a transaction
c.
processing a transaction that has unequal debits and credits
d.
entering a transaction with an incorrect date
107. Which of the following is not an advantage of a computerized system over a manual system?
a.
Transactions are recorded and posted at the same time.
b.
Accuracy is usually better with a computerized system.
c.
Current account balances are always available.
d.
Internal controls are optional to the computerized system.
108. Which of the following is not an area where the Internet is used for business purposes?
a.
business cycle management
b.
customer relationship management
c.
supply chain management
d.
product life-cycle management
109. In which journal would you find cash revenues recorded?
a.
cash payments journal
b.
general journal
c.
revenues journal
d.
cash receipts journal
110. Services performed for cash should be recorded in the
a.
revenue journal
b.
purchases journal
c.
cash receipts journal
d.
cash payments journal
111. When there are a large number of individual accounts with a common characteristic, it is common to place them in a
separate ledger called a(n)
a.
general ledger
b.
income statement ledger
c.
group ledger
Name:
Class:
Date:
d.
subsidiary ledger
112. Which of the following is not considered a special journal?
a.
purchases journal
b.
cash receipts journal
c.
general journal
d.
cash payments journal
113. Which of the following is always recorded in the general journal?
a.
rendering services for cash
b.
purchases of supplies on account
c.
rendering services on account
d.
closing entries
114. When using a revenue journal,
a.
separate “Fees Earned” and “Accounts Receivable” columns are included
b.
both cash sales and sales on account are recorded in the journal
c.
revenues are normally recorded when the company sends customer invoices
d.
postings to customer accounts are done at month’s end
115. Business may be segmented by all of the following except
a.
region
b.
product line
c.
customer type
d.
time period
116. What is meant by the term B2C?
a.
balance to cash
b.
business to cash
c.
book to capital
d.
business to consumer
117. A cash payments journal would not include a(n)
a.
Cash Cr. column
b.
Sales Discounts Cr. column
c.
Accounts Payable Dr. column
d.
Other Accounts Dr. column
118. Processing methods
a.
are the policies and procedures that protect assets from misuse
b.
must be computerized
c.
are the means by which the accounting system collects, summarizes, and reports accounting information
d.
ensure that business laws and regulations are followed
Name:
Class:
Date:
119. A(n) ____ system is the methods and procedures for collecting, classifying, summarizing, and reporting a business’s
financial and operating information.
a.
accounting
b.
fiduciary
c.
operations
d.
auditing
120. Subsidiary ledgers
a.
are used only for accounts payable and accounts receivable
b.
may be used for various general ledger accounts
c.
may be used only for the cash account
d.
are never used for more than four accounts
121. Waller Company does business in two regional segments: North and South. The following annual revenue
information was determined from the accounting system’s invoice data:
Segment
Current Year
Prior Year
North
$ 80,000
$100,000
South
260,000
200,000
Total revenues
$340,000
$300,000
Using horizontal analysis, determine the percentage change in revenues for the North region.
Round to one decimal place.
a.
22.4%
b.
(20.0)%
c.
20.0%
d.
(22.4)%
122. In which journal would the payment of salaries be posted?
a.
cash receipts journal
b.
special journal
c.
cash payments journal
d.
expense journal
The following transactions were completed by Franklin Company during January, its first month of operations. Assume
that Franklin Company uses the following journals: cash receipts (CR), cash payments (CP), revenue (R), purchases (P),
and general (G). Assume that it uses accounts receivable (AR) and accounts payable (AP) subsidiary ledgers as well as a
general ledger. Match each of the following transactions to the journal entry and subsidiary ledger posting (a through k)
that best applies.
a.
CR, no subsidiary posting
b.
CP, no subsidiary posting
c.
R, no subsidiary posting
d.
P, no subsidiary posting
e.
G, no subsidiary posting
f.
CR, AR
Name:
Class:
Date:
g.
CP, AP
h.
R, AR
i.
P, AP
j.
G, AR
k.
G, AP
123. Issued check for rent
124. Purchased equipment on account
125. Issued an invoice to a customer
126. Received a check from a customer for payment on account
127. Issued check for advertising expense
128. Issued check for a payment on account
129. Issued check for purchase of supplies
130. Issued check for salary
131. Received cash for a sale
132. Purchased supplies on account
133. Purchased a computer for cash
134. Paid for the equipment purchased on account
135. Journalized the adjusting entry for supplies used during the month
Match each of the following transactions to the journal (a through e) in which it would be entered.
a.
Revenue journal
b.
Cash receipts journal
c.
Purchases journal
d.
Cash payments journal
e.
General journal
136. Recorded adjusting journal entry for accrued interest
137. Performed advising services on account
138. Purchased office supplies on account
139. Borrowed money for expansion project
140. Received payment from customer on account
Name:
Class:
Date:
141. Withdrew cash for personal use (by owner)
142. Paid monthly rent
143. Paid creditor on account
Match each of the following transactions to the journal (a through c) in which it would be entered.
a.
Revenue journal
b.
Cash receipts journal
c.
General journal
144. Invested additional cash in the business
145. Rendered services for cash
146. Rendered services on account
147. Received cash on account from a customer
148. Journalized the adjusting entry for supplies used
149. Closed the drawing account at the end of the period
Match each of the following transactions to the journal (a through e) in which it would be entered.
a.
Revenue journal
b.
Cash receipts journal
c.
Purchases journal
d.
Cash payments journal
e.
General journal
150. Withdrew supplies from the business for personal use (by owner)
151. Rendered services on account
152. Paid vendor on account
153. Received payment from customer on account
154. Purchased supplies on account
155. Journalized the adjusting entry for supplies used during the period
156. Withdrew cash for personal use (by owner)
157. Received cash from the bank in exchange for a note payable
158. Recognized depreciation on the building
159. Closed the revenue account at the end of the period
Name:
Class:
Date:
Match each of the following transactions to the journal (a through c) in which it would be entered.
a.
Purchases journal
b.
Cash payments journal
c.
General journal
160. Paid rent
161. Purchased supplies on account
162. Purchased computer on account
163. Purchased supplies for cash
164. Paid the premium in advance for a one-year fire insurance policy on the office
165. Journalized the adjusting entry for accrued salaries at month’s end
166. Recognized depreciation on equipment
167. Paid the balance on an account payable
Match each of the following general and subsidiary ledger postings to the description (a through e) that best applies.
a.
Purchase on account
b.
Collection from customer on account
c.
Adjustment for expired insurance
d.
Payment to creditor on account
e.
Sale on account
168. Accounts receivable subsidiary ledger/Accounts Receivable Dr.
169. Accounts receivable subsidiary ledger/Accounts Receivable Cr.
170. Accounts payable subsidiary ledger/Accounts Payable Cr.
171. Accounts payable subsidiary ledger/Accounts Payable Dr.
172. No subsidiary ledger posting
Match each of the following transactions to the journal (a through e) in which it would be entered.
a.
Cash receipts journal
b.
Cash payments journal
c.
Revenue journal
d.
Purchases journal
e.
General journal
173. Sold services on account
174. Paid for supplies previously purchased on account
Name:
Class:
Date:
175. Journalized the adjusting entry for accrued fees earned
176. Received payment from a customer on account
177. Purchased equipment on account
Match each of the following transactions to the journal or ledger (a through g) in which it would be entered.
a.
Purchases journal
b.
Revenue journal
c.
Cash receipts journal
d.
Cash payments journal
e.
Accounts receivable subsidiary ledger
f.
Accounts payable subsidiary ledger
g.
General journal
178. Monthly adjustment for supplies used
179. Cash receipt posting to an individual customer account
180. Record sale on account to customer
181. Record purchase on account from vendor
182. Record payment received from customer
183. Record payment made to vendor
184. Cash payment posting to an individual vendor account
185. The posting references in the following purchases journal are indicated by letters. Identify each posting reference [(a)
through (i)] as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3)
that no posting is required.
PURCHASES JOURNAL Page 1
Date
Account
Credited
Post.
Ref.
Accounts
Payable
Cr.
Office
Supplies
Dr.
Store
Supplies
Dr.
July 3
Morton Company
(a)
1,150
1,150
7
Jackson Co.
(b)
4,800
4,800
14
Fallon Inc.
(c)
7,000
7,000
26
Simpson Bros.
(d)
2,350
31
15,300
11,800
1,150
(e)
(f)
(g)
Account
Other
Accounts
Post
Ref.
Amount
Name:
Class:
Date:
Equipment
(h)
1,950
1,950
(i)
186. Journalize the following five transactions of Porshe Creations, using a revenue journal:
(a)
On March 20, Porshe sold 25 cell phone covers to Xtreme at $4.50 per cover on
Invoice No. 887.
(b)
On March 21, Porshe sold 5 cell phone covers to Sidekick for $7.50 per cover on
Invoice No. 908.
(c)
On March 22, Porshe sold 18 cell phone covers to Rock-On at $4.25 per cover on
Invoice No. 938.
(d)
On March 26, Porshe sold 200 cell phone covers to Micro at $3.75 each on Invoice
No. 959.
(e)
On March 29, Porshe sold 6 cell phone covers to Charmers for $8.35 each on
Invoice No. 997.
Revenue Journal Page 15
Date
Invoice
No.
Account Debited
Post.
Ref.
Accts. Rec.
Dr.
Sales Rev.
Cr.
187. Minnie Co. does business in three segments: Theme Parks, Movie Production, and Merchandise. The following
information from the current year is available:
Segment
Current Year
(in thousands)
Prior Year
(in thousands)
Theme Parks
$ 776,000
$ 664,000
Movie Production
824,000
596,000
Merchandise
495,000
325,000
Total revenues
$2,095,000
$1,585,000
Prepare a vertical analysis of the segment data. Round percentages to two decimal places.
188. Mickey Co. does business in three regional segments: West, East, and Central. The following information is
available:
Segment
Current Year
(in thousands)
Prior Year
(in thousands)
East
$ 776,000
$ 664,000
Name:
Class:
Date:
West
824,000
596,000
Central
495,000
325,000
Total revenues
$2,095,000
$1,585,000
Prepare a horizontal analysis of the segment data. Round percentages to two decimal places.
189. Davidson, Inc., incurred the following transactions during the month of January. Record the appropriate ones in the
cash receipts journal. If a transaction should not be recorded in the cash receipts journal, indicate in which journal it
should be entered.
(a)
On January 3, Davidson, Inc., purchased a one-year insurance policy for $2,400.
The account number for Prepaid Insurance is 16.
(b)
On January 5, Davidson, Inc., received a payment on account from Pasher
Industries of $625.
(c)
On January 12, Davidson, Inc., made sales on account of $3,500 and sales for cash
of $2,300. The account number for Fees Earned is 41.
(d)
On January 26, Davidson, Inc., received $1,250 in rent revenue from a tenant who
leases a portion of its building. The account number for Rent Revenue is 44.
(e)
On January 29, Davidson, Inc., received a payment on account from Gooden, Inc.
for $2,000.
Cash Receipts Journal
Date
Account
Credited
Post.
Ref.
Other
Accounts
Cr.
Accounts
Receivable
Cr.
Cash
Dr.
190. Define and describe an accounting system.
191. Connie and Jill operate Reardon’s Bakery which has the following segment revenues for the most recent two fiscal
years. Prepare a vertical analysis. Round percentages to two decimal places.
Segment
Current Year
(in thousands)
Prior Year
(in thousands)
Cakes
$ 691,000
$ 662,000
Cupcakes
512,000
550,000
Desserts
417,000
468,000
Beverages
875,000
815,000
Total revenues
$2,495,000
$2,495,000
192. Explain what subsidiary ledgers are and give examples of three types of subsidiary ledgers that a business might use.
193. For each of the following businesses, explain how a purchases journal might be modified for the specific business.
1. North County Medical Center
2. Tri-County Farms, Inc.
Name:
Class:
Date:
3. Prescott’s Quick Lube and Tire Store
194. Two transactions were posted to the following creditor’s account:
NAME Windsurf, Inc.
ADDRESS 343 Coastline Road
Date
Item
Post. Ref.
Debit
Credit
Balance
Aug. 1
Balance
1,210
8
Invoice No. 333
CP38
1,210
—
15
Invoice No. 567
P11
735
735
Describe each transaction and the source of each posting.
195. Voyager Electronic Services has three customers in its accounts receivable subsidiary ledger with beginning balances
as follows:
Fred Yao Ming, $1,150.00
Kohl Townson, $850.00
Chandra Jahi, $1,075.00
Journalize the following transactions, using a general journal. Then post to the accounts receivable account in the general
ledger and to the customer accounts in the accounts receivable subsidiary ledger.
June 3 Kohl Townson paid $325.00 on account.
10 Chandra Jahi purchased $475.00 on account.
15 Fred Yao Ming paid $395.00 on account.
16 Fred Yao Ming purchased $685.00 on account.
23 Kohl Townson purchased $155.00 on account.
General Journal
Page 41
Date
Description
Post.
Ref.
Debit
Credit
Name:
Class:
Date:
GENERAL LEDGER
Account Accounts Receivable Account No. 12
Date
Item
Post.
Ref.
Debit
Credit
Balance
Debit Credit
June 1
Beg. balance
√
3,075.00
ACCOUNTS RECEIVABLE SUBSIDARY LEDGER
Fred Yao Ming
Date
Item
Post.
Ref.
Debit
Credit
Balance
June 1
Beg. balance
√
1,150.00
Kohl Townson
Date
Item
Post.
Ref.
Debit
Credit
Balance
June 1
Beg. balance
√
850.00
Chandra Jahi
Date
Item
Post.
Ref.
Debit
Credit
Balance
June 1
Beg. balance
√
1,075.00
196. The posting references in the following revenue journal are indicated by letters. Identify each posting reference [(a)
through (h)] as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3)
that no posting is required.
Name:
Class:
Date:
REVENUE JOURNAL Page 25
Post
Acct. Rec. Dr.
Date
Invoice No.
Account Debited
Ref.
Fees Earned Cr.
Apr. 3
190
Hill Company
(a)
4,750
8
191
North Supply
(b)
5,025
13
192
Macon Inc.
(c)
2,100
17
193
White Products
(d)
6,000
25
194
Easton Supply
(e)
2,250
30
195
Karson Enterprises
(f)
3,750
30
23,875
(g) (h)
197. Explain whether each of the following would usually be used in a computerized accounting system and why or why
not.
1. Special journals
2. Accounts receivable control accounts
3. Electronic invoice form
4. Month-end postings to the general ledger
198. Two transactions were posted to the following supplier’s (creditor’s) account:
NAME: Xample, Inc.
Address: 567 Harrison Blvd.
Date
Item
Post. Ref.
Debit
Credit
Balance
Nov. 1
Balance
√
125
9
Invoice No. 564
CP45
55
70
18
Invoice No. 574
P28
75
145
Describe each transaction and the source of each posting.
199. Describe and discuss e-commerce.
200. The following are selected transactions related to purchases on account and cash payments completed during April of
the current year.
Apr. 1
Issued Check No. 60 in payment of rent for month, $2,400.
5
Purchased office supplies from Clauson Co., $850.
9
Issued Check No. 61 to Dame Co. for $9,750 for cash purchase of equipment.
10
Purchased store supplies from Ewing Co., $425.
15
Issued Check No. 62 to Clauson Co. in payment of April 5 invoice.
17
Purchased store supplies from Patton Co., $7,500.
20
Issued Check No. 63 to Ewing Co. in payment of April 10 invoice of $425.
25
Purchased equipment from Sloan Co., $7,750.
27
Issued Check No. 64 to Patton Co. for partial payment of the April 17 invoice, $4,000.
30
Purchased office supplies from Winthrop Co., $400.
(a)
Journalize the transactions, using a purchases journal and a cash payments journal.
(b)
Total and rule the purchases and cash payments journals as of April 30.
(c)
Indicate the method of posting the individual items and the totals of the purchases and cash
payments journals in the following manner:
(1)
For individual items and totals to be posted to the subsidiary ledger or not to be
posted, insert a check mark in the Post. Ref. column or under the totals.
Name:
Class:
Date:
(2)
For individual items and totals to be posted to the general ledger, insert the letter “G”
(as a substitute for specific account numbers) in the Post. Ref. column or under the
totals.
CASH PAYMENTS JOURNAL Page 11
Other
Accounts
Ck.
Account
Post.
Accounts
Payable
Cash
Date
No.
Debited
Ref.
Dr.
Dr.
Cr.
PURCHASES JOURNAL Page 22
Accounts
Store
Account
Post.
Payable
Supplies
Date
Credited
Ref.
Cr.
Dr.
Office
Other
Supplies
Accounts
Post.
Dr.
Dr.
Ref.
Amount
201. The following cash receipts journal headings have been suggested for Tower Tree-Trimming Service Company.
What problems do you see with these headings?
Date
Account
Credited
Post.
Ref.
Fees Earned
Cr.
Accounts
Receivable Cr.
Cash
Cr.
Other Accounts
Dr.
202. The discovery and correction of errors is important in a computerized system. What kinds of errors might occur in
these systems? What type(s) of errors will be prevented in a computerized system?
203. List the four most common special journals used in accounting and describe the transactions recorded in each
Name:
Class:
Date:
journal.
204. The following selected transactions were completed by Ridge Company during March of the current year:
Mar. 5
Rendered services on account to Quinton Co., Invoice No. 92, $3,250.
10
Rendered services on account to Martin Inc., Invoice No. 93, $4,500.
13
Received $5,000 in payment of monthly rent, which was due on March 1.
15
Received payment from Quinton Co. for invoice of March 5.
19
Received payment from Martin Inc. for balance due on invoice of March 10.
20
Received amount due from Thomas Co. on sale made in February, $5,200.
31
Rendered services for cash during the month, $15,750.
(a)
Journalize the transactions, using a revenue journal and a cash receipts journal.
(b)
Total and rule the revenue and cash receipts journals.
(c)
Indicate the method of posting the individual items and the columnar totals of the revenue
and cash receipts journals in the following manner:
(1)
For individual items and totals to be posted to the subsidiary ledger or not to be
posted, insert a check mark in the Post. Ref. column or under the totals.
(2)
For individual items and totals to be posted to the general ledger, insert the letter “G”
(as a substitute for specific account numbers) in the Post. Ref. column or under the
totals.
REVENUE JOURNAL Page 10
Post.
Accts. Rec. Dr.
Date
Invoice No.
Account Debited
Ref.
Fees Earned Cr.
CASH RECEIPTS JOURNAL Page 23
Other
Accounts
Account
Post.
Accounts
Receivable
Cash
Date
Credited
Ref.
Cr.
Cr.
Dr.
205. Payton Company has the following segment revenues for the two most recent fiscal years.
Segment
Current Year
(in millions)
Prior Year
(in millions)
China
$ 775.00
$ 650.00
Canada
325.50
245.50
Other countries
215.50
168.50
Total revenues
$1,316.00
$1,064.00
Prepare a vertical analysis of the segment data. Round to one decimal place.
Name:
Class:
Date:
206. The following purchases journal headings have been suggested for Tower Tree-Trimming Service Company. What
problems do you see with these headings?
Date
Account
Credited
Post.
Ref.
Accounts
Payable Dr.
Accounts
Receivable
Cr.
Cash
Cr.
Other
Accounts
Dr.
207. The following purchase transactions occurred during August for Backcountry Kayak Excursions.
Aug. 1
Purchased Kevlar kayaks (equipment) for $5,600 on account from Gear Inc.
6
Purchased kayak paddles (supplies) for $3,250 on account from Southland Co.
14
Purchased life vests (supplies) for $2,500 on account from Gear Inc.
Journalize these transactions, using a purchases journal.
Purchases Journal Page 1
Date
Account
Credited
Post.
Ref.
Accounts
Payable
Cr.
Supplies
Dr.
Other
Accounts
Dr.
Post.
Ref.
Amount
208. Eastwood Publishing reports the following segment data regarding its textbook sales:
Segment
Current Year
Prior Year
College textbooks
$ 78,000
$ 55,000
High school textbooks
129,000
115,000
Elementary school textbooks
105,000
121,000
Total revenues
$312,000
$291,000
Perform a horizontal analysis and a vertical analysis for Eastwood Publishing. Round to one decimal place.
209. Two transactions were posted to the following customer account:
NAME: Roswell Communications, Inc.
Address: 345 Alien Way
Date
Item
Post. Ref.
Debit
Credit
Balance
May 1
Balance
√
750
14
Invoice No. 522
CR230
625
125
25
Invoice No. 545
R115
3,500
3,625
Name:
Class:
Date:
Describe each transaction and the source of each posting.
210. Two transactions were posted to the following supplier’s (creditor’s) account:
NAME: Banner Computer Services, Inc.
Address: 890 Novice Lane
Date
Item
Post. Ref.
Debit
Credit
Balance
July 1
Balance
√
5,645
19
Invoice No. 45
P16
1,755
7,400
26
Invoice No. 39
CP36
3,500
3,900
Describe each transaction and the source of each posting.
211. Payton Company has the following segment revenues for the two most recent years.
Segment
Current Year
(in millions)
Prior Year
(in millions)
United States
$ 825.00
$ 600.00
Canada
325.50
345.50
Other countries
215.50
168.50
Total revenues
$1,366.00
$1,114.00
Prepare a horizontal analysis of the segment data. Round to one decimal place.
212. The Internet creates opportunities for improving the speed and efficiency of transactions. Name and describe three
key areas besides e-commerce where the Internet is being used for business purposes.
213. Define the meaning of the terms B2C and B2B as they relate to e-commerce.
214. 123 Kids TV operates in five major international segments.
Segment
Current Year
(in millions)
Prior Year
(in millions)
United States
$ 9,132
$ 8,528
Canada
8,248
6,391
England
4,734
4,141
China
11,700
13,299
Brazil
5,645
6,391
Total revenues
$39,459
$38,750
Prepare a horizontal analysis of the segment data. Round percentages to two decimal places.
215. Briefly describe the three-step process of accounting system development.
216. Maximilian Corporation provided revenue disclosures for the current year by its major product segments in the notes
to its financial statements as follows:
Major Product Segments
Current Year
(in millions)
Name:
Class:
Date:
Petroleum-based products
$10,450
Industrial chemicals
9,460
Refined chemical products
8,575
Food additives
7,325
Emulsifiers
6,900
Pesticides
5,870
Salts
4,545
Wetting agents
3,215
Total revenues
$56,340
Prepare a vertical analysis. Round to one decimal place.
217. What is a business segment? How can business segments be analyzed?
218. Identify the three main advantages of a computerized accounting system over a manual accounting system.
219. Two transactions were posted to the following customer account:
NAME: Gen-X Products, Inc.
Address: 123 My Way
Date
Item
Post. Ref.
Debit
Credit
Balance
Mar. 1
Balance
√
1,150
10
Invoice No. 987
R45
990
2,140
19
Invoice No. 995
CR78
825
1,315
Describe each transaction and the source of each posting.
220. Sunrise Coffee Shop, in an effort to streamline its accounting system, has decided to utilize a cash receipts journal.
Journalize the following selected summary transactions for March, total the columns, and include the posting references
that would be inserted when posting the entries/totals to the ledger accounts. A partial chart of accounts follows. After
recording the transactions, indicate if there are any additional columns you would add to this journal
Cash Receipts Journal
Date
Account
Credited
Post.
Ref.
Other
Accounts
Cr.
Beverage
Revenue
Cr.
Food
Revenue
Cr.
Cash
Cr.
Mar. 1
Received cash for beverage sales, $375.
1
Received cash for food sales, $250.
1
Received cash for customer sales of Sunrise’s signature
coffee mugs, $130.
7
Received cash for beverage sales, $480.
7
Received cash for food sales, $325.
Name:
Class:
Date:
7
Received cash for customer sales of Sunrise’s signature
coffee mugs, $115.
10
Received cash on account from Central.com, $900.
Chart of Accounts (Partial)
10 Cash
41 Beverage Revenue
12 Accounts Receivable
42 Food Revenue
15 Retail Items
43 Retail Revenue
221. Harris, Inc., incurred the following transactions during the month of February. Record the appropriate ones in the
cash payments journal. Include posting references. If a transaction should not be recorded in the cash payments journal,
indicate in which journal it should be entered.
(a)
On February 3, the company purchased $650 worth of supplies on account. The
supplies account number is 15.
(b)
On February 5, Harris, Inc. made a payment on account to Sanders Industries in
the amount of $1,215 (Check No. 2214).
(c)
On February 14, Harris, Inc. bought a one-year insurance policy for $1,500. The
prepaid insurance account number is 14 (Check No. 2215).
(d)
On February 22, Harris, Inc. paid monthly rent of $2,000. The rent expense
account number is 63 (Check No. 2216).
(e)
On February 26, Harris, Inc. purchased equipment, paying cash of $7,000 (Check
No. 2217). The equipment account number is 18.
Date
Ck.
No.
Account Debited
Post.
Ref.
Other
Accounts
Dr.
Accounts
Payable Dr.
Cash
Cr.
222. Down-Under, an aquatic supply store, makes the following five payments during August. Journalize them in the cash
payments journal as appropriate.
(a)
On August 2, Down-Under paid Pondmaster, Inc. with Check No. 6420 for 6 pumps at
$435.00 each. The pumps had been purchased in July on account.
(b)
On August 10, Down-Under purchased $785.00 of office supplies from Business
Systems with Check No. 6421.
(c)
On August 15, Down-Under paid Aqua Magic $215.00 on account with Check No.
6422.
(d)
On August 27, Down-Under paid an invoice for merchandise received earlier from
Spindrifter, Inc. for 8 drains at $73.50 each with Check No. 6423.
(e)
On August 31, Down-Under purchased $65.00 of koi clay from The Natural Wonder
Company by writing Check No. 6424. (Record in Pond Supplies Expense.)
Cash Payments Journal
Page 17
Date
Ck.
No.
Account Debited
Post.
Ref.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Cash
Cr.
Name:
Class:
Date:
223. Discuss the process of posting from a revenue journal to the subsidiary ledger and to the general ledger.
224. Two transactions were posted to the following customer account.
NAME: Boogie Board Water Wear
ADDRESS: 2340 Xtreme Surf
Date
Item
Post. Ref.
Debit
Credit
Balance
July 1
Balance
805
6
Invoice No. 406
R42
645
1,450
24
Invoice No. 456
CR56
710
740
Describe each transaction and the source of each posting.
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date:
Name:
Class:
Date: