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66. Output devices include all of the following except:
A. Printers.
B. Monitors.
C. LCD projectors.
D. Web communications.
E. Bar code readers.
67. 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.
68. Which of the following is not a special journal:
A. Sales journal.
B. Purchases journal.
C. Cash receipts journal.
D. Cash disbursements journal.
E. General journal.
69. The sales journal is used for recording:
A. Credit purchases.
B. Credit sales.
C. Cash sales.
D. Cash purchases.
E. Cash receipts.
70. The purchases journal is used for recording:
A. Credit purchases.
B. Credit sales.
C. Cash sales.
D. Cash purchases.
E. Cash disbursements.
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71. A log 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.
72. 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.
73. A record that contains all accounts (with amounts) of a company is the:
A. General ledger.
B. General journal.
C. Special ledger.
D. Special journal.
E. Column balance ledger.
74. 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 and amounts with a common characteristic.
D. Is also called a general ledger.
E. Is also called a special journal.
75. A subsidiary ledger that contains a separate account for each supplier (creditor) to the
company is a(n):
A. Controlling account.
B. Accounts receivable ledger.
C. Accounts payable ledger.
D. General ledger.
E. Special journal.
76. An accounts payable ledger is:
A. A subsidiary ledger that contains an account for each supplier (creditor).
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.
77. 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.
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78. 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.
79. 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.
80. Subsidiary ledgers do all of the following 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. Eliminate the need for individual postings to the customer or supplier accounts.
81. The accounts receivable ledger:
A. Is for storing transaction data for customers.
B. Is for storing transaction data for individual customers.
C. Is for storing transaction data for individual creditors.
D. Is for storing transaction date for creditors.
E. Is also the controlling account.
82. Enterprise-resource planning software:
A. Refers to programs that help manage a company’s vital operations.
B. Is another name for spreadsheet programs.
C. Uses batch processing of business information.
D. Is substantially declining in use.
E. Is another name for database programs.
83. An approach that enters and processes data as soon as source documents are available is
called:
A. Date storage.
B. Batch processing.
C. Online processing.
D. Computer programming
E. Web communications.
84. Which of the following does not apply to enterprise resource planning (ERP) software:
A. ERP refers to programs that help manage a company’s vital operations.
B. ERP can include programs that extend from order taking to manufacturing to accounting.
C. ERP can speed up business decision making and help reduce costs.
D. ERP cannot be used to share data with customers and suppliers.
E. ERP can be designed to link every part of a company’s operations.
85. A business segment:
A. Requires only internal reporting.
B. Is a part of a company that is separately identified by its products, services, or geographic
market.
C. Requires special journals.
D. Requires subsidiary ledgers.
E. Cannot report its results separately.
86. Kala’s Latin American segment had revenues of $2,089 million, operating income of
$1,033 million, and average assets of $1,443 million. The Latin American segment return on
assets is:
A. 49.4%
B. 69.0%
C. 71.6%
D. 139.7%
E. 144.8%
87. The segment return on assets:
A. Can only be determined for international companies.
B. Reflects the profitability of a segment.
C. Is difficult to calculate because companies with traded stock are not required to report
segment information.
D. Is calculated as segment average assets divided by segment operating income.
E. Is calculated as segment sales divided by segment average assets.
88. When the sales journal’s column for accounts receivable and sales is totaled at the end of
the month, its total is:
A. Debited to Sales and credited to Accounts Receivable.
B. Debited to Accounts Receivable and credited to Cash.
C. Debited to Cash and credited to Accounts Receivable.
D. Debited to Accounts Receivable and credited to Sales.
E. Debited to Cash and credited to Sales.
89. A list of all the accounts in the accounts receivable ledger with their balances and the total
is a(n):
A. Schedule of accounts.
B. Controlling account.
C. Schedule of accounts receivable.
D. Subsidiary ledger.
E. Special journal.
90. The Accounts Payable account in the general ledger is:
A. A controlling account for the subsidiary accounts payable ledger.
B. The account that controls the purchases journal.
C. The subsidiary account to the purchases journal.
D. Part of a special journal.
E. Part of a subsidiary ledger.
91. After posting is completed, there may be an error if:
A. The sum of the customer account balances does not equal the total in the sales journal.
B. The sum of the accounts receivable ledger does not equal the balance in the Sales account.
C. The sum of the customer account balances does not equal the general ledger Accounts
Receivable controlling account balance.
D. The balance in the sales journal does not equal the Accounts Receivable account balance.
E. The sum of the accounts receivable ledger does not equal the balance in the sales journal.
92. Assume that a company using a purchases journal made an error in totaling the journal’s
accounts payable column. The error should be discovered:
A. When the purchases journal is posted to the general ledger.
B. When the sum of the vendor accounts does not equal the balance in the Purchases journal.
C. When the total of the schedule of accounts payable is compared with the balance of the
Accounts Payable account.
D. When the creditors receive their payments.
E. When the financial statements are prepared.
93. The main difference in the sales journal under the perpetual and periodic inventory system
is:
A. The column to record cost of goods sold and inventory amounts sold that is used under the
perpetual system but not the periodic.
B. The sales tax receivable column that is used under the perpetual system but not the
periodic.
C. The sales tax payable column that is used under the perpetual system but not the periodic.
D. The accounts receivable column that is used under the perpetual system but not the
periodic.
E. The column for recording cash that is used under the perpetual system but not the periodic.
94. The accounting principle that prescribes an accounting information system conform with a
company’s activities, personnel, and structure is the:
A. Control principle.
B. Compatibility principle.
C. Relevance principle.
D. Flexibility principle.
E. Cost-Benefit principle.
95. All of the following statements regarding source documents are true except:
A. Source documents provide the basic information processed by an accounting system.
B. Source documents include bank statements, cash register files, and employee earnings
records.
C. Source documents are insignificant and play a minor role in the reliability of the
information system.
D. Source documents can be paper or electronic files.
E. Source documents can include Web communications.
96. All of the following statements regarding input devices are true except:
A. Input devices capture information from source documents and enable its transfer to the
system’s information processing component.
B. Input devices convert data on source documents from written form to a form usable for the
system.
C. Input devices include keyboards, scanners, and modems.
D. Input devices include journal entries.
E. Input devices are always reliable and no controls are needed to verify accuracy of input.
97. For a retailer required to collect sales taxes from customers, all of the following
adaptations would be made to the sales journal except:
A. Column totals would continue to be posted as usual.
B. A Sales Taxes Payable credit column would be added.
C. There would be a separate Accounts Receivable debit column.
D. A Sales Taxes Payable debit column would be added.
E. There would be a separate Sales credit column.
98. To be sure that total debits and credits in a columnar journal are equal, before posting we
should:
A. Crossfoot.
B. Foot.
C. Journalize.
D. Post.
E. Reconcile.
99. A company borrowed $50,000 from a bank by signing a long-term note payable. 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.
100. A company had cash sales of $24,000 (cost is $13,000). Identify the journal the
transaction would be recorded in.
A. Cash disbursements journal.
B. Sales journal.
C. Cash receipts journal.
D. Purchase journal.
E. General journal.
101. A company sold merchandise on credit for $5,000 (cost is $2,400). 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.
102. A company purchased $11,200 of merchandise 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.
103. A company received payment of $9,800 from a customer within the discount period.
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.
104. A company issued a check for $7,900 in payment of merchandise. 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.
105. 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.
106. A company issued a check for $7,900 in payment of the salaries expense for the last half
of the month. 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.
107. A company had average total assets of $982,450 and net income of $190,700, and reports
various segment information. Segment A had average total assets of $437,800 and segment
operating income of $98,230. Segment B had average assets of $151,200 and segment
operating income of $16,190. Calculate the segment return on assets for Segment A.
A. 19.4%.
B. 22.4%.
C. 26.1%.
D. 10.7%.
E. 20.2%.
108. A company had average total assets of $982,450 and net income of $190,700, and reports
various segment information. Segment A had average total assets of $437,800 and segment
operating income of $98,230. Segment B had average assets of $151,200 and segment
operating income of $16,190. Calculate the segment return on assets for Segment B.
A. 19.4%.
B. 22.4%.
C. 26.1%.
D. 10.7%.
E. 20.2%.
109. Identify the accounting information system principle below that applies to each of these
situations.
a. Control
b. Compatibility
c. Relevance
d. Flexibility
e. Cost-benefit
_____ 1. Global Company has designed their accounting information system to be adaptable
to changes in technology, the business environment, and the needs of decision makers.
_____ 2. Global Company has world-wide operations that must handle several thousand
different products, so the accounting information system is fairly complex, encompassing
marketing and manufacturing.
_____ 3. Global Company’s accounting information system has policies to ensure that
financial statements will be reliable, assets are protected, and relevant laws and regulations
are complied with.
_____ 4. Global Company’s accounting information system can be improved markedly for a
cost of about $30,000,000. However, the incremental benefits from such improvements are
not expected to outweigh this cost.
_____ 5. Global Company has designed their accounting information system so that key
managers can obtain the information they need to make decisions relating to new products,
sales, and controlling costs.