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Exam 7: Accounting Information Systems

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Question 51

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A special journal is used to record and post transactions of a similar type.

A) True
B) False

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Question 52

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Subsidiary ledgers are not needed in perpetual inventory systems because the accounting system captures sufficient details to support analyses that decision makers need.

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B) False

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Question 53

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Medco Company uses special journals to record transactions. Medco uses the perpetual inventory system. Journalize the following transactions in the appropriate special journal. All credit sales have 2/10, n/30 terms.

Discuss the differences in the special journals between a company using a perpetual inventory system and one using a periodic inventory system.

Special journals allow an efficient division of labor, which is also an effective control procedure.

The compatibility principle requires that an accounting system report useful, understandable, timely, and pertinent information for effective decision making.

The flexibility principle prescribes that an accounting information system conform with a company's activities, personnel, and structure and adapt to a company's unique characteristics.

The accounting principle that prescribes an accounting information system conform with a company's activities, personnel, and structure is the:

Internal controls include policies to direct operations toward common goals, procedures to ensure reliable financial reports, safeguards to protect company assets and methods to achieve compliance with laws and regulations.

A company borrowed $50,000 from a bank by signing a long-term note payable. Identify the journal the transaction would be recorded in.

A subsidiary ledger is a listing of individual accounts with a common characteristic.

The use of an Accounts Payable controlling account:

The Woodview Company uses a sales journal, purchases journal, cash receipts journal, cash disbursements journal, and general journal. They use the perpetual method. The following transactions occurred during the current month of December: Record the above transactions into the appropriate journals shown below.

Assume that a company uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal. A sales return for credit on account would be recorded in the:

_______________________________________ refers to the programs that help managers direct a company's vital operations.

Most companies use batch processing instead of online processing because batch processing immediately updates databases.

A sales journal is used to record cash sales.

The following information is available for Bosc, Inc. (all amounts are in millions):

______________________ provide the basic information processed by an accounting system, and can include bank statements, billings to customers, and employee earnings records.

A list of all the accounts in the accounts receivable ledger with their balances and the total is a(n) :