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140. 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.
a. Borrowed cash from the bank.
b. Purchased equipment inventory on credit.
c. Paid cash to a creditor.
d. Sold equipment to a customer on credit.
e. Sold equipment to a customer for cash.
f. Paid employees' salaries in cash.
g. Received payment from a customer on account.
h. Purchased office supplies on account.
i. Returned inventory to creditor before payment.
j. Sold equipment on account.
141. Lester Company uses special journals to record transactions. All of the companies listed
below supply inventory to Lester except Harry Co. that supplies equipment. Use the purchases
journal given below to answer the following questions:
a. Foot and crossfoot the journal for accuracy.
Purchases Journal
Date Account Date of
Invoice Terms PR Accounts
Payable
Cr. Inventory
Dr. Office
Supplies
Dr. Other
Accounts
Dr.
5/3 James Co. 5/2 2/10, n/30 20,000 20,000
5/5 Stacy Co. 5/4 2/10, n/30 18,000 18,000
5/7 Harry Co./Equip. 5/6 n/60 36,000 36,000
5/8 Steve Co. 5/7 2/10, n/30 10,000
5/9 Alex Co. 5/8 2/10, n/30 12,000 12,000
b. Identify the error and indicate how to correct the error.
c. When Lester compares the general ledger Accounts Payable account to the Accounts
Payable ledger, it notices that the general ledger control account is $10,000 more that the
schedule of Accounts Payable. What is the most likely cause and how should it be corrected?
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142. 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.
Sales Journal
Date Account Debited Invoice
Number PR Accounts Receivable Dr.
Sales Cr. Cost of Goods Sold Dr.
Inventory Cr.
12/1 Yazoo Co. 1200 6,900 3,500
12/1 Barge Co. 1201 3,400 1,800
12/3 Amper Co. 1202 7,200 4,000
12/6 Jason Co. 1203 3,000 1,500
Totals 20,500 10,800
Cash Receipts Journal
Date Account Credited Explanation PR Cash
Dr. Sales
Discount
Dr. Accounts
Receivable
Cr.
7-80
143. Medco Company uses special journals to record transactions. Medco uses the perpetual
inventory system. Journalize the following transactions in the appropriate special journal. All
credit sales have 2/10, n/30 terms.
Nov. 3The company purchased $5,500 of merchandise on credit from Hastings, terms 2/10,
n/30.
5The company sold merchandise costing $5,250 to Harve Company for $8,900, invoice no.
278.
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7The owner, L. Jackson, contributed $15,000 cash to the company.
8The company purchased $7,200 of merchandise on credit from Lace Company, terms 1/15,
n/30.
10The company sold merchandise costing $4,630 to Jones Company for $8,250, invoice no.
279.
14The company received payment from Harve Company for the November 5 sale within the
discount period.
15Medco paid salaries of $5,560 for the first half of the month, check no. 214.
16Medco returned $1,200 of the merchandise purchased on November 8 to Lace Company.
20Medco paid Lace for the purchase on November 8 within the discount period, check no.
215.
22Medco purchased office equipment from Yale Co. costing $12,000 on credit, terms n/30.
Sales Journal
Date
Account Debited Invoice Number
PR Accounts Receivable Dr. Sales Cr. Cost of Goods Sold Dr.
Inventory Cr.
Purchases Journal
Date
Account
Date of Invoice
Terms
PR Accounts Payable Cr.
Inventory Dr. Office Supplies Dr. Other Accounts Dr.
Cash Receipts Journal
Date
Account Credited
Explanation
PR
Cash Dr. Sales Discount Dr. Accounts Receivable Cr.
Sales Cr. Other Accounts Cr. Cost of Goods Sold Dr.
Inventory Cr.
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Cash Disbursements Journal
Date
Ck. No.
Payee
Account Debited
PR
Cash Cr.
Inventory Cr. Other Accounts Dr. Accounts Payable Dr.
General Journal
Answer:
7-83
144. The following information is available for Bosc, Inc. (all amounts are in millions):
N. America S. America Europe
Segment sales $7,945 $8,940 $4,780
Segment operating income 2,320 2,455 595
Segment average assets 6,590 7,750 2,480
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?
Fill in the Blank Questions
145. The __________________ principle requires that the benefits from an activity in an
accounting information system outweigh the costs of that activity.
146. The _____________________ principle requires that an accounting information system
aid managers in controlling and monitoring business activities.
147. _____________________________________ consist of people, records, methods, and
equipment that collect and process data from transactions and events, organize them in useful
reports and communicate results to decision makers.
148. The _________________ principle requires that an accounting information system report
useful, understandable, timely, and pertinent information for effective decision making.
149. The __________________ principle requires that an accounting information system
conform with a company's activities, personnel, and structure, and must adapt to a company's
unique characteristics.
150. The ___________ principle requires that an accounting information system must be able
to adapt to changes in the company, business environment, and needs of decision makers.
151. __________________ provide the basic information processed by an accounting system,
and can include bank statements, billings to customers, and employee earnings records.
152. ______________________ capture information from source documents and enable its
transfer to the system's information processing component.
153. _____________________ are systems that interpret, transform, and summarize
information for use in analysis and reporting.
154. ____________________ is the accounting system component that keeps data in a form
accessible to information processors.
155. ____________________ are the means to take information out of an accounting system
and make it available to users.
156. A __________________ journal is used to record and post transactions of similar type.
157. A __________________ is an all-purpose journal that can record any transaction.
158. Using _______________ ledgers removes unnecessary details from the general ledger.
159. ________________________ refers to the programs that help managers direct a
company's vital operations.
160. ___________________ processing enters and processes data as soon as source
documents are available.
161. __________________ processing accumulates source documents for a period of time
and then processes them all at once such as daily, weekly, or monthly.
162. _______________________ are links among computers giving different users and
different computers access to common databases and programs.
163. A ____________________ is a part of a company that is separately identified by its
products, or services, or by the geographic market it serves.
164. The _______________________ ratio is a measure of a segment's profitability and is
calculated as segment operating income divided by segment average assets.
165. Individual transactions in the sales journal are posted regularly to customers' accounts in
the ___________________________.
166. A _______________________________________ is a listing of accounts from the
accounts payable ledger with their balances and the sum of all balances.
167. The difference in the sales journal between the perpetual and periodic inventory systems
is a column to record _________________________ and __________________ for each sale.
This column is used in the perpetual system but not in the periodic.
