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Chapter 7
Accounting Information Systems
QUESTIONS
1. The five components of an accounting system are: source documents, input
2. Source documents contain data about business transactions or events that are put
3. The five fundamental principles of accounting information systems are: (a) control
4. An input device is used to transfer data from source documents to the information
7. Four types of transactions usually recorded in special journals are: (a) sales on
credit, (b) purchases on credit, (c) cash receipts, and (d) cash disbursements.
8. The (a) initial and (b) page number of the journal from which the amount is posted is
entered in the Posting Reference column of the ledger account.
9. The double posting does not cause the trial balance to be out of balance because
10. When copies of the sales invoices are used as a sales journal, each invoice total is
posted to the proper customer account in the subsidiary Accounts Receivable
7-1
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
11. Both kinds of credits must not be placed in the same column because the sum of the
12. Immediate recording and posting of credit sales and cash receipts from customers
13. In its note 11 (Segment Information and Geographic Data), Apple discusses its
reportable segments; the Company manages its business primarily on a geographic
14. In its note 15 (Information about Segments and Geographic Areas), Google
15.
Segment
Operating
Income Net Sales
Operating Income /
Net Sales
Americas............................... $22,817 $62,739 36.4%
Europe................................... 13,025 37,883 34.4%
Apple’s Japan segment is the most profitable reportable segments as it has the
highest operating margin of 50.7%. Its retail segment is the least profitable
7-2
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
QUICK STUDIES
Quick Study 7-1 (15 minutes)
1. B 5. C 8. A
Quick Study 7-2 (10 minutes)
1. A 4. E
Quick Study 7-3 (10 minutes)
a. Sales Journal
b. Purchases Journal
c. Cash Disbursements Journal
Quick Study 7-4 (15 minutes)
General Journal
Nov. 2 [In Purchases Journal]
Nov. 12 Automobiles........................................................... 17,000
T. Biloxi, Capital............................................... 17,000
Owner contributed an auto to the business.
7-3
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Quick Study 7-5 (15 minutes)
a) Accounts Receivable Ledger
ACCOUNTS RECEIVABLE LEDGER
Stern Company
Date Explanation PR Debit Credit Balance
Diaz Brothers
Date Explanation PR Debit Credit Balance
Rex Company
Date Explanation PR Debit Credit Balance
b) General Ledger
GENERAL LEDGER
Accounts Receivable
Date Explanation PR Debit Credit Balance
Quick Study 7-6 (20 minutes)
PURCHASES JOURNAL
Date Account
Date
of
Invoice Terms PR
Account
s
Payable
Cr.
Inventory
Dr.
Office
Supplies
Dr.
Other
Accounts
Dr.
May 1 Krause, Inc..................
5/01 n/30 10,100 10,100
7-4
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Quick Study 7-7 (10 minutes)
May 1 Purchases Journal
8 Sales Journal
Quick Study 7-8 (30 minutes)
Part 1
ACCOUNTS RECEIVABLE LEDGER
Eric Horner Hong Jiang
Mary Mack Troy Wilson
Part 2
GENERAL LEDGER
Accounts Receivable Sales
Part 3
WARTON COMPANY
Schedule of Accounts Receivable
July 30
7-5
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
7-6
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Quick Study 7-9 (15 minutes)
Product Product Sales Percent of Total Sales
iPhone........................................... $ 91,279 53.4%
iPad............................................... 31,980 18.7
Interpretation: Sales of Apple’s iPhone make up its largest percentage of
total individual product sales, which makeup 53.4% of all net sales. The
iPods and the Accessories segments make up the two smallest percentage
of total product sales segments.
Quick Study 7-10 (15 minutes)
General Journal
1. [In Purchases Journal]
7-7
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
EXERCISES
Exercise 7-1 (15 minutes)
SALES JOURNAL
Date Account Debited
Invoice
Number PR
Accounts
Receivable Dr.
Sales Cr.
Cost of Goods
Sold Dr.
Inventory Cr.
May 7 J. Dryer.....................................5704 1,250 800
Exercise 7-2 (10 minutes)
May 2 Cash Receipts Journal
5 Purchases Journal
7 Sales Journal
7-8
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Exercise 7-3 (20 minutes)
CASH RECEIPTS JOURNAL
Date
Account
Credited Explanation PR
Cash
Dr.
Sales
Discount
Dr.
Accounts
Recble.
Cr.
Sales
Cr.
Other
Accounts
Cr.
Cost of
Goods
Sold Dr.
Inventory Cr.
Nov. 9 Notes Payable.............Note to bank 3,750 3,750
13 J. Ali, Capital..............Contribution 5,000 5,000
Exercise 7-4 (10 minutes)
November 3 Purchases Journal
7Sales Journal
9Cash Receipts Journal
7-9
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Exercise 7-5 (15 minutes)
a) Accounts Payable Ledger
ACCOUNTS PAYABLE LEDGER
Bailey Company
Date Explanation PR Debit Credit Balance
Johnson Brothers
Date Explanation PR Debit Credit Balance
Preston Company
Date Explanation PR Debit Credit Balance
b) General Journal
GENERAL JOURNAL
Accounts Payable
Date Explanation PR Debit Credit Balance
Exercise 7-6 (25 minutes)
CASH DISBURSEMENTS JOURNAL
Date
Ck.
No. Payee
Account
Debited PR
Cash
Cr.
Inventory
Cr.
Other
Accounts
Dr.
Accounts
Payable
Dr.
Apr.
9
210 Kitt Corp...........................Store Supplies.............................................
650 650
7-10
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Exercise 7-7 (10 minutes)
April 3 Purchases Journal
9 Cash Disbursements Journal
12 Sales Journal
Exercise 7-8 (10 minutes)
1. B When crossfooting the Purchases Journal.
2. A When preparing the schedule of accounts payable.
Exercise 7-9 (10 minutes)
a. (i) The June 5 purchase would be recorded in the Purchases Journal.
b. The error in journalizing the June 14 transaction should be discovered
in the process of crossfooting the Cash Disbursements Journal.
7-11
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Education.
