59)
Which of the following accounting principles prescribes that an accounting information system
report useful, understandable, timely, and pertinent information for effective decision-making?
A)
Flexibility principle.
B)
Relevance principle.
C)
Compatibility principle.
D)
Cost-Benefit principle.
E)
Control principle.
60)
The five fundamental principles of accounting information systems are:
A)
Historical cost, relevance, compatibility, flexibility, and cost-benefit.
B)
Control, relevance, compatibility, flexibility, and safety.
C)
Historical cost, relevance, compatibility, timeliness, and cost-benefit.
D)
Control, accountability, relevance, compatibility, and flexibility.
E)
Control, relevance, compatibility, flexibility, and cost-benefit.
61)
Which of the following statements regarding accounting information systems is not true?
A)
Accounting information systems cannot improve on a company’s competitive edge.
B)
Accounting information systems are designed to capture information about a company’s
transactions.
C)
Accounting information systems are more important than ever to decision makers.
D)
Accounting information systems consist of people, records, methods, and equipment.
E)
Accounting information systems are designed to provide output including financial,
managerial, and tax reports.
62)
The basic components of an accounting information system include all of the following except:
A)
Source documents.
B)
Information storage.
C)
Warehouses.
D)
Information processors.
E)
Output devices.
63)
Source documents:
A)
Convert information to the system’s processing component.
B)
Are input devices.
C)
Cannot be electronic files or web communications.
D)
Store processed information for future use.
E)
Provide the basic information processed by an accounting system.
64)
Input devices include:
A)
Scanners.
B)
Software.
C)
Information processors.
D)
Ledgers.
E)
Printers.
65)
Information storage databases:
A)
Capture information from source documents.
B)
Are relied on by auditors of the financial statements.
C)
Need not be accessible once data is processed.
D)
Should not be cloud based.
E)
Eliminate the need for professional judgment.
66)
Which of the following is not an output device?
A)
Web communications.
B)
Printers.
C)
Bar code readers.
D)
Projectors.
E)
Monitors.
67)
Information processors are systems that:
A)
Keep data in an accessible form.
B)
Interpret, transform, and summarize information for use in analysis and reporting.
C)
Capture information from source documents.
D)
Eliminate the need for professional judgment due to their accuracy.
E)
Are the means to make information available to users.
68)
Which of the following is not a special journal:
A)
Cash disbursements journal.
B)
General journal.
C)
Purchases journal.
D)
Cash receipts journal.
E)
Sales journal.
69)
The sales journal is used for recording:
A)
Cash sales.
B)
Credit sales.
C)
Cash purchases.
D)
Credit purchases.
E)
Cash receipts.
70)
The purchases journal is used for recording:
A)
Credit sales.
B)
Cash purchases.
C)
Cash sales.
D)
Credit purchases.
E)
Cash disbursements.
71)
A journal that is used to record and post transactions of a similar type is a(n):
A)
Special journal.
B)
General journal.
C)
Perpetual journal.
D)
Columnar journal.
E)
All-purpose journal.
72)
When a company uses special journals, the general journal is used to record selected transactions
and events including:
A)
Credit purchases.
B)
Closing entries.
C)
Sales on credit.
D)
Credit sales.
E)
Cash payments.
73)
Which of the following is not a feature of special journals?
A)
They produce an efficient division of labor.
B)
They eliminate the need for a general journal.
C)
Good system design could collapse sales and cash receipts into one journal to better suit a
business.
D)
They allow posting of amounts as column totals rather than as individual amounts.
E)
They are efficient tools in helping journalize and post transactions.
74)
A record that contains detailed information on specific accounts with a common characteristic and
is support for a controlling account is a(n):
A)
All-purpose ledger.
B)
Subsidiary ledger.
C)
Special ledger.
D)
General ledger.
E)
Column balance ledger.
75)
A subsidiary ledger:
A)
Is a listing of all of the accounts of a business.
B)
Is also called a general ledger.
C)
Is a listing of individual accounts and amounts with a common characteristic.
D)
Is also called a special journal.
E)
Includes transactions not covered by special journals.
76)
A subsidiary ledger that contains a separate account for each supplier (creditor) to the company is
a(n):
A)
Controlling account.
B)
Special journal.
C)
Accounts receivable ledger.
D)
General ledger.
E)
Accounts payable ledger.
77)
An accounts receivable ledger is a:
A)
List of the separate accounts that show the balances outstanding from credit customers.
B)
Book of original entry that is designed and used for recording only sales on credit.
C)
Ledger that contains all financial statement accounts of a business.
D)
Subsidiary ledger that contains a separate account for each party that grants both short-term
and long-term credit on account to the company.
E)
Subsidiary ledger that contains an account for each supplier (creditor).
78)
Assume that a company uses special journals for sales, purchases, cash receipts, and cash
disbursements. A sales return for credit on account would be recorded in the:
A)
Direct posting journal.
B)
Cash disbursements journal.
C)
Cash receipts journal.
D)
General journal.
E)
Sales journal.
79)
An accounts payable ledger:
A)
Contains a separate account for each creditor (supplier) to the company.
B)
Is a book of original entry designed and used for recording only a specified type of
transaction.
C)
Contains the financial statement accounts of a business.
D)
Contains an account for each credit customer.
E)
Lists the balances of selected accounts that are added to show the total amount of the
significant long-term creditors outstanding.
80)
The Accounts Payable controlling account:
A)
Equals the sum of all balances of supplier accounts.
B)
Reduces the number of entries in the general journals.
C)
Increases the number of columns in the journals.
D)
Stores the transaction data of individual supplies.
E)
Is not included in a company’s chart of accounts.
81)
Subsidiary ledgers do all of the following except:
A)
Help with division of labor (recordkeeping tasks).
B)
Aid in error identification for individual accounts.
C)
Eliminate the need for individual postings to the customer or supplier accounts.
D)
Remove excessive detail from the general ledger.
E)
Provide up-to-date information on customer or other specific account balances.
82)
The accounts receivable ledger:
A)
Is also the controlling account.
B)
Stores transaction data for individual creditors.
C)
Is a substitute for the sales journal.
D)
Is a substitute for the cash receipts journal.
E)
Stores transaction data for individual customers.
83)
Examples of other subsidiary ledgers besides those for accounts receivable and accounts payable
may include all of the following except:
A)
Inventory.
B)
Equipment.
C)
Payroll.
D)
Investments.
E)
Cash.
84)
Chandler Company sold merchandise on credit to Jamie Morgan for $700 and the cost of the
merchandise was $290. Chandler would record this sale in the:
A)
General journal.
B)
Accounts Receivable controlling account.
C)
General ledger.
D)
Sales journal.
E)
Cash receipts journal.
85)
Chandler Company purchased merchandise on credit from Lighting Supply for $5,600. Chandler
would record this sale in the:
A)
Purchases journal.
B)
Cash receipts journal.
C)
General journal.
D)
Cash disbursements journal.
E)
Accounts Payable controlling account.
86)
Doughton Furniture Company purchased merchandise on credit from Furniture Supply for $8,000.
Two days later Doughton returned $2,000 of the merchandise due to damage. Doughton would
record the return of merchandise in the:
A)
Cash disbursements journal.
B)
General journal.
C)
Purchases journal.
D)
Accounts Payable controlling account.
E)
Cash receipts journal.
87)
Doughton Furniture Company purchased merchandise on credit from Furniture Supply for $8,000.
Two days later Doughton returned $2,000 of the merchandise due to damage. When Doughton
pays for the merchandise minus the return, it would record the payment in the:
A)
General journal.
B)
Purchases journal.
C)
Cash disbursements journal.
D)
Cash receipts journal.
E)
Accounts Payable controlling account.
88)
Enterprise-resource planning software:
A)
Uses batch processing of business information.
B)
Is another name for spreadsheet programs.
C)
Refers to programs that help manage a company’s vital operations.
D)
Is substantially declining in use.
E)
Is another name for database programs.
89)
An approach that enters and processes data into the accounting system as soon as source
documents are available is called:
A)
Batch processing.
B)
Web communications.
C)
Computer programming.
D)
Online processing.
E)
Date storage.
90)
Which of the following is not true about enterprise resource planning (ERP) software:
A)
ERP can be designed to link every part of a company’s operations.
B)
ERP cannot be used to share data with customers and suppliers.
C)
ERP can include programs that extend from order taking to manufacturing to accounting.
D)
ERP can speed up business decision making and help reduce costs.
E)
ERP refers to programs that help manage a company’s vital operations.
91)
A business segment is part of a company that:
A)
Requires subsidiary ledgers.
B)
Cannot report its results separately.
C)
Requires only internal reporting.
D)
Requires special journals.
E)
Is separately identified by its products, services, or geographic market.
92)
Alani’s Hawaiian segment had revenues of $2,075 million, operating income of $1,500 million, and
average assets of $1,450 million. The Hawaiian segment return on assets is:
A) 138.3% B) 69.9% C) 96.7% D) 72.3% E) 103.4%
93)
The segment return on assets:
A)
Reflects on the profitability of a segment.
B)
Is difficult to calculate because companies with traded stock are not required to report
segment information.
C)
Is applicable whether segments earn profits or losses.
D)
Is calculated as segment sales divided by segment average assets.
E)
Is calculated as segment average assets divided by segment operating income.
94)
When posting the sales journal’s activity at the end of the month, its totals are:
A)
Debited to Sales and credited to Accounts Receivable.
B)
Debited to Accounts Receivable and credited to Sales.
C)
Debited to Accounts Receivable and credited to Cash.
D)
Debited to Cash and credited to Accounts Receivable.
E)
Debited to Cash and credited to Sales.
95)
A list of all the accounts in the accounts receivable ledger with their balances and the total is a:
A)
Schedule of accounts receivable.
B)
Controlling account.
C)
Subsidiary ledger.
D)
Special journal.
E)
Schedule of accounts.
96)
The Accounts Payable account in the general ledger is:
A)
The subsidiary account to the purchases journal.
B)
A controlling account for the subsidiary accounts payable ledger.
C)
Part of a special journal.
D)
The account that controls the purchases journal.
E)
Part of a subsidiary ledger.
97)
After posting is completed, there may be an error if:
A)
The sum of the supplier account balances does not equal the general ledger Accounts Payable
controlling account balance.
B)
The sum of the accounts receivable ledger does not equal the balance in the sales journal.
C)
The sum of the accounts receivable ledger does not equal the balance in the Sales account.
D)
The sum of the supplier account balances does not equal the total in the purchases journal.
E)
The balance in the sales journal does not equal the Accounts Receivable account balance.
98)
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 creditors receive their payments.
B)
When the sum of the vendor accounts does not equal the balance in the Purchases journal.
C)
When the purchases journal is posted to the general ledger.
D)
When the financial statements are prepared.
E)
When the total of the schedule of accounts payable is compared with the balance of the
Accounts Payable account.