ledger account.
_____ 4. A journal used to record all purchases on credit.
_____ 5. A journal used to record sales of merchandise on credit.
6. A measure of the profitability of a segment, calculated as segment operating income divided
by segment average assets.
7. A special journal used to record all payments of cash.
_____ 8. Any journal used for recording and posting transactions of a similar type.
_____ 9. A general ledger account, the balance of which, after posting, equals the sum of the
balances of the accounts in its related subsidiary ledger.
_____ 10. A list of each customer from the accounts payable ledger with their balances and the total.
130)
A company entered into the following transactions. Match each transaction with the appropriate
journal in which it should be recorded.
a. Sales journal
b. Purchases journal
c. Cash receipts journal
d. Cash disbursements journal
e. General journal
_____ 1. Borrowed $7,000 cash from the local bank.
_____ 2. A customer returned a $250 item purchased on account.
_____ 3. Purchased merchandise on account, $2,100.
_____ 4. Purchased equipment on account for $4,000.
_____ 5. Paid $15,000 cash in wages to employees.
_____ 6. Paid a telephone bill for $3,400 cash.
_____ 7. Purchased $1,150 of office supplies on account.
_____ 8. Recorded depreciation on office equipment of $2,000.
_____ 9. Returned defective inventory purchased on account, $2,550.
_____ 10. Recorded cash sales of $12,700.
131)
A company entered into the following transactions. For each transaction, indicate the appropriate
journal in which it should be recorded.
a. Sales Journal
b. Purchases Journal
c. Cash Receipts Journal
d. Cash Disbursements Journal
e. General Journal
_____ 1. Purchased merchandise on credit.
_____ 2. Sold merchandise on credit.
3. Purchased merchandise for cash.
_____ 4. Sold merchandise for cash.
_____ 5. Paid cash to settle the utility bill.
_____ 6. Owner invested more cash in the business.
_____ 7. Recorded depreciation for the period.
_____ 8. Borrowed cash from the bank.
9. Bought office supplies on credit.
10. Received cash from a customer to settle an account receivable.
132)
List the five basic principles of accounting information systems.
ESSAY QUESTIONS
133)
List the five basic components of accounting information systems and give an example of each.
134)
Explain the purposes, types, and uses of special journals.
135)
What are controlling accounts and subsidiary ledgers? What is the relationship between them?
136)
Discuss how technology based information systems affect accounting.
137)
What is the segment return on assets ratio? What is it used for?
138)
Describe the posting process for special journals.
139)
Explain how the amounts in the subsidiary ledgers are proved (or reviewed) for accuracy.
140)
Discuss the differences in the special journals between a company using a perpetual inventory
system and one using a periodic inventory system.
141)
What is footing and crossfooting of the column totals in special journals? What is the purpose?
North America
$1,494/$4,700 = 31.8%
Asia
$273/$541 = 50.5%
Central America
$1,127/$1,382 = 81.5%
142)
Alex Reagent, owner of Delectable Candy Company, understands that accounting systems are
important for success. Explain how Alex can use the accounting system to assess business
operations.
143)
The following information is available for some of Branson’s segments (all amounts are in millions):
North America
Asia
Central America
Segment sales
$5,190
$750
$2,350
Segment operating income
1,494
273
1,127
Segment average assets
4,700
541
1,382
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?
68
144)
The Stapleton Company uses special journals for sales, purchases, cash receipts, cash disbursements,
and uses a general journal. They operate with a perpetual inventory system. The following
transactions occurred during the current month of September:
Sep.
1
Paid $2,400 cash for monthly rent to Wabash Properties, Check No. 1630.
4
Purchased merchandise on credit for $1,800 from Bell Co., terms 2/10, n/30.
Invoice dated September 4.
8
Sold merchandise on credit for $4,300 to Andrews Co., Invoice No. 413. The cost
of the goods sold is $2,750.
10
Sold merchandise for $1,500 cash to Lacey Corp., Invoice No. 414. The cost of
the good sold is $720.
13
Paid amount owed to Bell Co. from September 4 purchase, Check No. 1631.
17
Collected $4,300 cash from the Andrews Co. for merchandise sold on September
8.
24
Sold merchandise on credit for $4,500 to Frasier Corp., Invoice No. 415. The cost
of goods sold is $2,600.
31
Purchased office supplies for $3,055 from Maxwell Corp., Check No. 1632.
Record the above transactions into the appropriate journals that follow.
70
145)
The Tigre Company uses special journals for sales, purchases, cash receipts, cash disbursements, and
uses a general journal. They operate with a perpetual inventory system. Record the following
transactions related to purchases and cash payments that occurred during the current month of June:
June
1
Paid $800 cash for monthly rent to Frontier Properties, Check No. 2116.
3
Purchased merchandise on credit for $2,400 from Whistle Co., terms 2/10, n/30. Invoice dated
June 3.
5
Returned defective merchandise with a cost of $300 to Whistle from the June 3 purchase.
8
Purchased equipment on credit from Jackson Co. for $6,700, terms 1/10, n/30.
13
Paid amount owed to Whistle Co. from June 3 purchase with Check No. 2117.
30
Purchased office supplies for $1,075 from Paperly Corp., Check No. 2118.
Record the above transactions into the appropriate journals shown below.
72
146)
The Saginaw Company uses special journals for sales, purchases, cash receipts, cash disbursements,
and uses a general journal. They operate with a perpetual inventory system. Record the following
transactions related to sales and cash receipts that occurred during the month of August:
Aug.
3
Sold $8,700 merchandise to Kline Co., terms 2/10, n/30, Invoice No. 826. The
cost of the goods sold was $3,900.
6
Sold merchandise on credit for $3,500 to Mentor Corp., Invoice No. 827. The cost
of the good sold is $1,750.
10
Mentor Corp. returned $750 of merchandise from the Aug. 6 sale. The cost of the
merchandise was $330. The merchandise was restored to inventory.
12
Collected amount due from the Kline Co. for merchandise sold on Aug. 3.
31
Collected on the Aug. 6 sale to Mentor Corp., net of the return.
Record the above transactions into the appropriate journals that follow.
Feb.
3
Sold merchandise for $5,000 to the North Corp. on credit, Invoice No. 785. Cost
of the goods sold is $2,900.
6
Sold a piece of land for $25,000 cash. The land was originally purchased for
147)
A company uses a sales journal, purchases journal, cash receipts journal, cash disbursements journal,
and general journal. A perpetual inventory system is used. The following transactions were completed
by the company during the current month of February:
73
74
6
Sold a piece of land for $25,000 cash. The land was originally purchased for
$25,000.
11
Purchased supplies from Office Mate for $240 Cash. Check No. 2316.
15
Issued a credit memo for $850 to North Corp. for returned merchandise. Cost of
the goods returned is $410.
21
Returned $130 of merchandise purchased from Shifton Corp. for credit on
account.
22
Paid cash to Rentals Inc. for monthly rent of $3,500. Check No. 2317.
31
Recorded depreciation on equipment of $7,000.
Record these transactions in the appropriate journals that follow.
76
148)
Salem Co. uses special journals to record its transactions. They use the perpetual inventory system.
Shown below are the purchasing and cash disbursement transactions for current month of July:
July
1
Purchased merchandise for cash from Van Co. $4,400, Check No. 1033.
2
Purchased office equipment from Bat Co. on credit, $6,700, terms n/60. Invoice
dated July 1.
6
Paid Badger, Inc., $3,900 cash for previous purchases on account, which is net of
a $100 discount, Check No. 1034.
9
Purchased merchandise from Aztec, Inc. on credit, terms 1/15, n/30, $23,600.
Invoice dated July 8.
10
Paid Bat Co. cash for May 2 purchase, Check No. 1035.
18
Purchased office supplies on credit $130, terms net EOM from Roberts, Co.,
Invoice dated July 17.
Record these transactions in the following journals.
77
149)
The following special journal is taken from a merchandising company that uses the perpetual
inventory system:
1. What is the name of the journal shown above?
2. Write an explanation for each entry in this journal.
3. What do the numbers in parentheses at the bottom of the journal indicate?
Oct.
1
Sold merchandise on credit to Lake Co. for $3,000, terms 2/15, n/30, Invoice
No. 245. Cost of the goods sold is $1,320.
5
Sold merchandise on credit to Sigma Corp. for $2,000, terms, 2/10, n/30,
Invoice No. 246. Cost of the goods sold is $740.
10
Accepted merchandise returned by Lake Co. from October 1 sale. Issued credit
memorandum for $500. Cost of the goods returned is $290.
13
Received cash payment from Lake Co. for October 1 sale.
19
Received cash payment in full from Sigma Corp. for the October 5 sale.
150)
A company records its transactions and events in four special journals and a general journal. The
company completed the following transactions a through j. Identify the journal in which each
transaction should be recorded.
a. Sold merchandise for cash. ________
b. Collected on a customer’s account. ________
c. Paid the monthly electric bill. ________
d. Purchased office supplies on credit. ________
e. Sold merchandise on credit. ________
f. Paid a creditor on account. ________
g. Received returned merchandise for credit. ________
h. Purchased merchandise on account. ________
i. Received proceeds from a note issued to the bank. ________
j. Returned damaged merchandise to the supplier. ________
Sales
151)
Gershwin Company uses four special journals: purchases, sales, cash receipts, and cash
disbursements. The following sales and cash collections transactions were incurred during October:
79
19
Received cash payment in full from Sigma Corp. for the October 5 sale.
28
Recorded cash sales for the month, $8,000. Cost of the goods sold is $4,220.
Record these transactions in the appropriate special journals below.