Appendix C
Accounting Information Systems
Review Questions
1. What is an accounting information system (AIS)?
2. What does an effective accounting information system provide?
3. Explain the three basic components of an accounting information system.
The three basic components of an accounting information system are source documents and input
devices, processing and storage, and outputs.
4. What is a special journal?
A special journal is an accounting journal designed to record a specific type of transaction.
5. What is the purpose of a subsidiary ledger?
A subsidiary ledger holds individual accounts that support a general ledger account. The sum of the
6. What is a control account?
7. List the four special journals often used in a manual accounting information system. What types of
transactions are recorded in each of the special journals?
The four special journals often used in a manual accounting information system are:
8. Explain the posting process of the sales journal.
Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the
9. Provide some examples of transactions that would be recorded in the Other Accounts CR column of
the cash receipts journal.
The Other Accounts CR column of the cash receipts journal is used to record miscellaneous cash
10. What are the columns that are typically used in the purchases journal?
The purchases journal typically has special columns for Account Payable CR, Merchandise
11. Explain the posting process of the cash payments journal.
Entries in the cash payments journal are posted to both the accounts payable subsidiary ledger and
12. When is the general journal used in a manual accounting information system? Provide some
examples of transactions that would be recorded in the general journal.
Nonroutine transactions are recorded in the general journal. Examples include sales returns and
allowances, purchase returns and allowances, adjusting entries, and closing entries.
13. Explain the two components of a computerized accounting information system.
The two components of a computerized accounting information system are hardware and software.
14. What are two common entry-level accounting software systems used by small businesses?
15. What is an enterprise resource planning (ERP) system? What are the advantages and disadvantages
of using an ERP?
An enterprise resource planning (ERP) system integrates all of a company’s functions, departments,
16. How is QuickBooks organized?
QuickBooks is organized by function or task. A navigation panel on the left-hand side of the screen
is used to select a variety of tasks such as vendors, customers, employees, transactions, and reports.
17. How would a business record a sale of services on account in QuickBooks?
To record a sale of services on account in QuickBooks, the transaction is recorded on the customers
18. How would a business record a bill received in QuickBooks?
Short Exercises
SC-1 Evaluating features of an effective accounting information system
Learning Objective 1
In Vogue, a T-shirt business, is growing fast and needs a better accounting information system. Consider
the features of an effective system. Which features are most important? Why? Which feature must you
consider if your financial resources are limited?
SOLUTION
An effective accounting information system includes control, compatibility, flexibility, relevance, and a
SC-2 Defining components of an accounting information system
Learning Objective 1
Match each component of a computerized accounting information system with an example. Components
may be used more than once.
SOLUTION
Example
Component
1. Server
B. Processing and Storage
2. Bank checks
A. Source Documents and Input Devices
3. Reports
C. Outputs
4. Keyboard
A. Source Documents and Input Devices
5. Software
B. Processing and Storage
7. Bar code scanner
A. Source Documents and Input Devices
SC-3 Identifying special journals
Learning Objective 2
Use the following abbreviations to indicate the journal in which you would record transactions a through
n.
SOLUTION
a.
CP
b.
CR
c.
CP
e.
g.
CR
h.
CP
k.
CR
SC-4 Recording transactions in a sales journal
Learning Objective 2
Use the following sales journal to record the preceding transactions.
SOLUTION
Note: This journal shows totals and posting references that are required in Short Exercise SC–5.
Sales Journal
Page 1
Date
Invoice
No.
Customer
Account Debited
Post.
Ref.
Accounts Receivable
DR
Cost of Goods Sold
DR
Sales Revenue
CR
Merchandise
Inventory
CR
Note: Short Exercise SC-4 must be completed before attempting Short Exercise SC-5.
SC-5 Posting transactions from a sales journal to a subsidiary ledger and general ledger
Learning Objective 2
Review your results from Short Exercise SC-4.
Requirements
1. Total each column of the sales journal.
2. Open the following four-column accounts in the accounts receivable subsidiary ledger: Accounts
Receivable—Floyd; Accounts Receivable—Jackson; Accounts Receivable—Till; Accounts
Receivable—Ward. Post the transactions to the accounts receivable subsidiary ledger.
3. Open the following selected four-column accounts in the general ledger: Accounts Receivable (112);
Merchandise Inventory (118), Bal. $5,000; Sales Revenue (411); Cost of Goods Sold (511). Post the
total of each column to the general ledger.
4. Balance the total of the customer balances in the accounts receivable subsidiary ledger against
Accounts Receivable in the general ledger.
SOLUTION
Requirement 1
Requirement 2
Accounts Receivable––Floyd
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Jun. 8
S.1
2,100
2,100
Accounts Receivable––Jackson
Date
Debit
Credit
Balance
Debit
Credit
Jun. 1
S.1
1,210
1,210
Accounts Receivable––Till
Date
Debit
Credit
Balance
Debit
Credit
S.1
Accounts Receivable––Ward
Date
Debit
Credit
Balance
Debit
Credit
SC-5, cont.
Requirement 3
Accounts Receivable
No. 112
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Jun. 30
S.1
4,580
4,580
Merchandise Inventory
No. 118
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
5,000
Sales Revenue
No. 411
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Jun. 30
S.1
4,580
4,580
Cost of Goods Sold
No. 511
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Jun. 30
S.1
3,440
3,440
Requirement 4
Customer
Balance
Floyd
$ 2,100
Jackson
1,210
Till
Ward
Total
$ 4,580
SC-6 Recording transactions in a cash receipts journal
Learning Objective 2
Use the following cash receipts journal to record the preceding transactions.
SOLUTION
Requirement 1
Note: This journal shows totals and posting references that are required in Short Exercise SC–7.
Note: Short Exercise SC-6 must be completed before attempting Short Exercise SC-7.
SC-7 Posting transactions from a cash receipts journal to a subsidiary ledger and general ledger
Learning Objective 2
Review your results from Short Exercise SC-6.
Requirements
1. Total each column of the cash receipts journal.
2. Open the following four-column accounts in the accounts receivable subsidiary ledger: Accounts
Receivable—Dexter, Bal. $5,475; Accounts Receivable—Nord, Bal. $1,100. Post the transactions to
the accounts receivable subsidiary ledger.
3. Open the following selected four-column accounts in the general ledger: Cash (111), Bal. $5,000;
Accounts Receivable (112), Bal. $6,575; Merchandise Inventory (118), Bal. $3,000; Sales Revenue
(411), Bal. $23,000; Sales Discounts (412); Interest Revenue (419); Cost of Goods Sold (511), Bal.
$13,800. Post the total of each column to the general ledger. Also, post the Other Accounts to the
general ledger.
4. Balance the total of the customer balances in the accounts receivable subsidiary ledger against
Accounts Receivable in the general ledger.
SOLUTION
Requirement 1
See cash receipts journal in Short Exercise SC-6.
Requirement 2
Accounts Receivable––Dexter
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Bal.
5,475
Jul. 29
CR.3
5,475
0
Accounts Receivable––Nord
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Bal.
1,100
Jul. 18
CR.3
1,100
0
Cash
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Bal.
5,000
Jul. 31
CR.3
Accounts Receivable
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Bal.
6,575
Jul. 31
CR.3
6,575
0
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Bal.
3,000
Jul. 31
CR.3
2,100
SC–7, cont.
Requirement 3, cont.
Sales Revenue
No. 411
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Bal.
23,000
Jul. 31
CR.3
2,200
25,200
Sales Discounts
No. 412
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Interest Revenue
No. 419
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Jul. 12
CR.3
2,350
2,350
Cost of Goods Sold
No. 511
Date
Debit
Credit
Balance
Debit
Credit
Bal.
13,800
Jul. 31
CR.3
2,100
15,900
Requirement 4
Customer
Balance
Dexter
$ 0
Nord
Total
$ 0
SC-8 Recording transactions in a purchases journal
Learning Objective 3
Use the following purchases journal to record the preceding transactions.
SOLUTION
Note: This journal shows totals and posting references that are required in Short Exercise SC–9.
Note: Short Exercise SC-8 must be completed before attempting Short Exercise SC-9.
SC-9 Posting transactions from a purchases journal to a subsidiary ledger and general ledger
Learning Objective 3
Review your results from Short Exercise SC-8.
Requirements
1. Total each column of the purchases journal.
2. Open the following four-column accounts in the accounts payable subsidiary ledger: Accounts
Payable—Borris Co.; Accounts Payable—Milk Co.; Accounts Payable—Slip Co. Post the
transactions to the accounts payable subsidiary ledger.
3. Open the following selected four-column accounts in the general ledger: Merchandise Inventory
(115); Office Supplies (116); Furniture (151); Accounts Payable (211). Post the total of each column
to the general ledger. Also, post the Other Accounts to the general ledger.
4. Balance the total of the vendor balances in the accounts payable subsidiary ledger against Accounts
Payable in the general ledger.
SOLUTION
Requirement 1
See purchases journal in Short Exercise SC–8.
Requirement 2
Accounts Payable––Borris Co.
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Oct. 11
P.6
Accounts Payable––Milk Co.
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Oct. 1
P.6
2,100
2,100
Accounts Payable––Slip Co.
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Oct. 24
P.6
1,700
1,700
Requirement 3
Merchandise Inventory
No. 115
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Oct. 31
P.6
2,100
2,100
Office Supplies
No. 116
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
Oct. 31
P.6
Furniture
No. 151
Date
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
P.6
1,700
1,700
SC–9, cont.
Requirement 3, cont.
Accounts Payable
No. 211
Post.
Balance
Requirement 4
SC-10 Recording transactions in a cash payments journal
Learning Objective 3
Use the following cash payments journal to record the preceding transactions.
SOLUTION
Note: This journal shows totals and posting references that are required in Short Exercise
SC–11.
Cash Payments Journal
Page 8
Date
Ck.
No.
Account Debited
Post.
Ref.
Other
Accounts
DR
Accounts
Payable
DR
Merchandise
Inventory
CR
Cash
CR
2016