CHAPTER 5: ACCOUNTING SYSTEMS
1.
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
2.
Systems analysis is the final phase in the creation or revision of an accounting system.
a.
True
b.
False
3.
Processing methods are the means by which the system collects, summarizes, and reports accounting information.
a.
True
b.
False
Chapter 5: Accounting Systems
4.
Accounting systems evolve through a three-step process: analysis, design, and feedback.
a.
True
b.
False
5.
An accounting system design consists of internal controls and information processing methods.
a.
True
b.
False
6.
Most accounting systems evolve as the business grows and requires changes in its methods for
collecting,
accumulating, and reporting information.
a.
True
b.
False
Chapter 5: Accounting Systems
7.
Once an accounting system has been implemented, feedback will be used to continuously analyze and improve
the
system.
a.
True
b.
False
8.
Designing a system to meet user needs is the final phase in the creation or revision of an accounting system.
a.
True
b.
False
9.
When specialized journals are used, the general journal is not necessary.
a.
True
b.
False
Chapter 5: Accounting Systems
10.
Specialized journals are books of original entry.
a.
True
b.
False
11.
Transactions must first be recorded into the general journal before they can be entered into specialized journals.
a.
True
b.
False
12.
The format and number of specialized journals that a business uses depends upon the legal organization of
the
business.
a.
True
b.
False
Chapter 5: Accounting Systems
13.
The basic procedure of posting from a revenue journal is to make all postings at the end of the month.
a.
True
b.
False
14.
The principal ledger that contains all the balance sheet and income statement accounts is the general ledger.
a.
True
b.
False
15.
The presence of a subsidiary ledger requires the presence of a summarizing control account in the general ledger.
a.
True
b.
False
Chapter 5: Accounting Systems
16.
An account for each supplier of merchandise will appear in the accounts payable subsidiary ledger.
a.
True
b.
False
17.
The customers subsidiary ledger is controlled by the general ledger account entitled Accounts Payable.
a.
True
b.
False
18.
When a sale for $1,350 takes place with a $250 deposit having been received in advance, only the $1,100
on
account is recorded in the revenue journal.
a.
True
b.
False
Chapter 5: Accounting Systems
19.
Even when special journals are used, purchases of store equipment on account are recorded in the general journal.
a.
True
b.
False
20.
A control account is used to record the details of the individual subsidiary accounts.
a.
True
b.
False
21.
A cash refund paid to a customer who overpaid an account receivable is recorded in the cash payments journal.
a.
True
b.
False
Chapter 5: Accounting Systems
22.
Even when special journals are used, a personal withdrawal of cash is recorded in the general journal.
a.
True
b.
False
23.
Services provided for cash are recorded in the revenue journal.
a.
True
b.
False
24.
Services provided on account are recorded in the revenue journal.
a.
True
b.
False
Chapter 5: Accounting Systems
25.
Sales of office supplies for cash, at cost, to a neighboring business as an accommodation are recorded in
the
revenue journal.
a.
True
b.
False
26.
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
27.
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
Chapter 5: Accounting Systems
28.
Purchases journals will have an Other Accounts Cr. column.
a.
True
b.
False
29.
The use of subsidiary ledgers is limited to Accounts Payable and Accounts Receivable.
a.
True
b.
False
30.
The revenue journal is designed for the efficient recording of cash sales transactions.
a.
True
b.
False
Chapter 5: Accounting Systems
31.
The Post. Ref. column of the revenue journal will reference the account number of the customer.
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.
Adjusting journal entries are recorded in a special journal.
a.
True
b.
False
Chapter 5: Accounting Systems
34.
Even when special journals are used, closing journal entries are recorded in the general journal.
a.
True
b.
False
35.
The accounts receivable subsidiary ledger is an example of a special journal.
a.
True
b.
False
36.
Posting from a revenue journal to the customer account is normally done only at the end of the month.
a.
True
b.
False
Chapter 5: Accounting Systems
37.
The purchase of supplies for cash would be recorded in the purchases journal.
a.
True
b.
False
38.
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
39.
The customers ledger and the creditors ledger refer to subsidiary ledgers.
a.
True
b.
False
Chapter 5: Accounting Systems
40.
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 debit column in the cash payments journal for the
same
period.
a.
True
b.
False
41.
The columns included in special journals are standardized for all businesses.
a.
True
b.
False
42.
Generally, subsidiary ledgers are used for general ledger accounts that consist of a large number of individual items.
a.
True
b.
False
Chapter 5: Accounting Systems
43.
In a computerized accounting system, all postings happen automatically at the end of the month.
a.
True
b.
False
44.
In computerized accounting systems, reports may be generated at any time.
a.
True
b.
False
45.
Computerized accounting systems prevent all journalizing errors.
a.
True
b.
False
Chapter 5: Accounting Systems
46.
Using the Internet to perform business transactions is called e-commerce.
a.
True
b.
False
47.
The term B2C refers to transactions conducted between two companies.
a.
True
b.
False
48.
E-commerce provides additional business opportunities but at the cost of reduced speed and efficiency.
a.
True
b.
False
Chapter 5: Accounting Systems
49.
One way to report revenue earned by a company is to present it by the different segments of business.
a.
True
b.
False
50.
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
51.
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
Chapter 5: Accounting Systems
52.
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
53.
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
54.
The three phases of setting up an accounting system are, in order
a.
design, implementation, analysis
b.
analysis, design, implementation
c.
design, analysis, implementation
d.
implementation, design, analysis
Chapter 5: Accounting Systems
55.
The goal of systems design is to meet
a.
when to implement a system
b.
user needs
c.
the size of the competitor’s system
d.
changes to the present system
56.
Which of the following is not an element of internal controls?
a.
to protect assets from misuse
b.
ensure the accuracy of business information
c.
ensure that laws and regulations are followed
d.
ensure that company policies are in place to maximize profits
57.
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
Chapter 5: Accounting Systems
58.
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
59.
The means by which the accounting system collects, summarizes, and reports accounting information is
called
information
a.
reporting methods
b.
accounting methods
c.
control methods
d.
processing methods
60.
The primary ledger containing all the balance sheet and income statement accounts is the
a.
general ledger
b.
creditors ledger
c.
customers ledger
d.
subsidiary ledger