Chapter 5 - Accounting Syste

Chapter 5--Accounting Systems
Student: ___________________________________________________________________________
1. Businesses must implement controls to help guide the behavior of their employees toward business
objectives.
True False
2. The methods or procedures used to record and report financial data are called the accounting system.
True False
3. Systems analysis is the final phase in the creation or revision of an accounting system.
True False
4. Processing methods are the means by which the system collects, summarizes, and reports accounting
information.
True False
5. Accounting systems evolve through a three-step process: analysis, design and feedback.
True False
6. An accounting system is the methods and procedures used to collect, classify, summarize, and report the
businesses financial information
True False
7. Most accounting systems evolve as the business grows and requires changes in their methods for collecting,
accumulating, and reporting information.
True False
8. Once an accounting system has been implemented, feedback will be used to continuously analyze and
improve the system.
True False

9. Analysis of user needs is the final phase in the creation or revision of an accounting system.
True False
10. When specialized journals are used, the general journal is not necessary.
True False
11. Specialized journals are books of original entry.

True False
12. Transactions must first be recorded into the general journal before they can be entered into specialized
journals.
True False
13. The format and number of specialized journals that a business uses depends upon the legal organization of
the business.
True False
14. The basic procedure of posting from a revenue journal is to make all postings at the end of the month.
True False
15. The principal ledger that contains all the balance sheet and income statement accounts is the general ledger.
True False
16. The presence of a subsidiary ledger requires the presence of a summarizing controlling account.
True False
17. The account for each supplier of merchandise will appear in the accounts payable subsidiary ledger.
True False
18. The customers subsidiary ledger is controlled by the general ledger account entitled Accounts Payable.
True False

19. 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 into the Revenue journal.
True False
20. Purchases of store equipment on account are recorded in the general journal.

True False
21. A controlling account is used to record the details of the individual accounts.
True False
22. A cash refund paid to a customer who overpaid an account receivable is recorded in the cash payments
journal.
True False
23. A personal withdrawal of cash is recorded in the general journal.

True False
24. Services provided for cash is recorded in the revenue journal.

True False
25. Services provided on account is recorded in the revenue journal.

True False
26. Sales of office supplies for cash, at cost, to a neighboring business as an accommodation, are recorded in the
revenue journal.
True False
27. 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.
True False

28. 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.
True False
29. Purchase journals will have an Other Accounts Cr. column.

True False
30. The use of subsidiary ledgers is limited to Accounts Payable and Accounts Receivable.
True False
31. The revenue journal is to make it more efficient to record sales transactions made for cash.
True False
32. The post reference column of the revenue journal will reference the account number of the customer.
True False
33. The total of the accounts receivable subsidiary accounts and the account receivable controlling account
should balance to each other at the end of the period.
True False
34. Adjusting journal entries are recorded in a special journal.

True False
35. Closing journal entries are recorded in the general journal.

True False
36. The accounts receivable subsidiary ledger is an example of a special journal.

True False
37. Posting from a revenue journal to the customer account is normally done only at the end of the month.
True False

38. The purchase of supplies for cash would be recorded in the purchases journal.
True False
39. When a large number of individual accounts with a common characteristic are grouped together, accounting
calls this a controlling account.
True False
40. The customers ledger and the creditors ledger refer to subsidiary ledgers.
True False
41. The total on the "Accounts Payable Creditors 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.
True False
42. The accounts included on specialized journals should not be customized for a businesses particular
activities.
True False
43. Generally, subsidiary ledgers are used for accounts that consist of a large number of individual items.
True False
44. Updating information in a computerized accounting system happens at the end of the month.
True False
45. In computerized accounting systems, reports may be generated at any time.

True False
46. Computerized accounting systems prevent all journalizing errors.

True False

47. Using the Internet to perform business transactions is called e-commerce.
True False
48. The term B2C refers to transactions conducted between two companies.

True False
49. E-commerce provides business opportunities at a higher cost.

True False
50. One way to report revenue earned by a company is to present it by the different segments of business.
True False
51. Match the transaction below with the journal or ledger in which it would be entered.
1. monthly adjustment for supplies used General journal ____

Accounts receivable
2. record payment made to vendor subsidiary ledger ____
3. record sale on account to customer Revenue journal ____
4. cash receipt posting to an individual
customer account Purchase journal ____
5. record purchase on account from
vendor Cash receipts journal ____
6. cash payment posting to an individual
vendor account Cash payments journal ____
Accounts payable subsidiary
7. record payment received from customer ledger ____

52. Match the following types of journal transactions with the journal in which it would be entered.
1. Equipment purchased on account Revenue journal ____

2. Adjusting entry Cash payments journal ____
3. Sale on account General journal ____
4. Payment for supplies bought on account Cash receipts journal ____
5. Collection on account Purchases journal ____

53. Select the correct subsidiary ledger and appropriate posting for each of the following customer and creditor
activities.
1. Accounts receivable subsidiary ledger;

Accounts receivable CR Sales on account ____
2. Accounts receivable subsidiary ledger; Collections from customers
Accounts receivable DR on account ____
3. No subsidiary ledger posting Purchases on account ____
4. Accounts payable subsidiary ledger; Payments to creditors on
Accounts payable CR account ____
5. Accounts payable subsidiary ledger; Adjusting entry for expired
Accounts payable DR insurance ____

54. 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
55. 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
56. 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
57. Which of the following is not part of a three-step process that a growing business uses for the evolution of
its accounting systems?
A. analysis
B. design
C. implementation
D. feedback
58. 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

59. The goal of systems analysis is to determine
A. when to implement a system
B. information needs
C. the size of the competitor's system
D. changes to the present system
60. 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
61. After an accounting system has been set up, what is the next step?
A. Analysis
B. Feedback
C. Implementation
D. Internal controls
62. 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
63. 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
64. The subsidiary ledger that includes customer account activity is called the
A. asset ledger
B. accounts payable ledger
C. expense ledger
D. accounts receivable ledger

65. Every controlling account must have its own
A. revenue ledger
B. general ledger
C. subsidiary ledger
D. journal
66. At the end of the month, the total of the amount column of the revenue journal is posted as a
A. debit to Accounts Receivable and a credit to Cash
B. debit to Accounts Receivable and a credit to Fees Earned
C. debit to Cash and a credit to Fees Earned
D. debit to Cash and a credit to Accounts Payable
67. The controlling account in the general ledger that summarizes the debits and credits to the individual
customers accounts in the subsidiary ledger is entitled
A. Purchases
B. Accounts Payable
C. Fees Earned
D. Accounts Receivable
68. When there are a large number of individual accounts with a common characteristic, it is common to place
them in a separate ledger called a(n)
A. General ledger
B. Income Statement Ledger
C. Group Ledger
D. Subsidiary Ledger
69. A purchase of supplies for cash is recorded in the

A. Revenue journal
B. Purchases journal
C. Cash Receipts journal
D. Cash Payments journal
70. A purchase of supplies on account is recorded in the

A. Revenue journal
B. General journal
C. Purchases journal

71. Which of the following transactions is recorded in the purchases journal?
A. purchase of store supplies on account
B. return of damaged office equipment
C. purchase of store supplies for cash
D. purchase of office equipment for cash
72. When posting a column total in the purchases journal, a credit should be posted to
A. Merchandise Inventory
B. Accounts Payable
C. Sales Returns and Allowances
D. Cash
73. In which journal would an adjustment for an overcharge by a creditor be recorded?

A. General journal
C. Cash Payments journal
D. Cash Receipts journal
74. Which of the following transactions is recorded in the revenue journal?

A. sale of excess office equipment for cash
B. rendering services for cash
C. rendering services on account
D. sale of excess office equipment on account
75. Each individual entry in the Revenue Journal is posted to

A. the Accounts Receivable controlling account
B. the accounts receivable subsidiary ledger
C. the Revenue controlling account
D. the accounts receivable subsidiary ledger and the controlling account
76. Which of the following is always recorded in the general journal?

A. services rendered for cash
B. correction of error in billing client
C. purchases of equipment on account
D. purchases of equipment for cash

A. rendering services for cash
B. purchases of supplies on account
D. closing entries
78. Which of the following is recorded in the cash receipts journal?

A. cash withdrawn by the owner
B. cash purchase of equipment
C. cash received on customer's account
D. adjusting entry for depreciation
79. Services performed for cash should be recorded in the

A. Revenue journal
80. Which of the following is recorded in the cash payments journal?

A. adjusting entry for accrued salaries
B. receipt of cash on supplies returned
C. receipt of cash from services rendered
D. payment of employees' salaries
81. A Cash Payments journal would not include a

A. Cash credit column
B. Sales Discounts credit column
C. Accounts Payable debit column
D. Other Accounts debit column
82. In which journal is the return of supplies purchased on account recorded?

A. General journal
B. Cash Receipts journal
D. Purchases journal

83. A cash purchase of supplies should be recorded in the
A. Cash Receipts journal
B. Purchase journal
C. General journal
84. When posting the column totals of a cash payments journal, a debit should be posted to
A. Cash
B. Accounts Payable
C. Sales Discounts
D. Unearned Revenue
85. In which journal is the receipt of a promissory note from a customer on account recorded?
A. Revenue journal
C. General journal
86. Subsidiary ledgers
A. are used only for Accounts Payable and Accounts Receivable
B. may be used for various ledger accounts
C. may be used for only for the Cash account
D. are never used for more than four accounts
87. Some of the more common subsidiary ledgers are:

A. Accounts Payable, Accounts Receivable, and Owner’s Equity subsidiary ledgers.
B. Accounts Receivable and Accounts Payable subsidiary ledgers.
C. Accounts Receivable, Accounts Payable, Cash, Checking, Petty Cash, and Owner’s Equity subsidiary
ledgers.
D. Cash and Owner’s Equity subsidiary ledgers.

88. If the individual subsidiary ledger accounts of Accounts Receivable and Accounts Payable contained the
following data:
Cadence Company - Vendor - $250 credit balance
Franklin Enterprises - Customer - $750 debit balance
Marcelo Construction - Client - $125 - debit balance
Peyton Supplies - Supplier - $375 - credit balance
The Accounts Receivable (A/R) controlling account and the Accounts Payable (A/P) controlling account
balances would be:
A. A/R - $1,000, A/P - $500
B. A/R - $625, A/P - $875
C. A/R - $875, A/P - $625
D. A/R - $750, A/P - $750
89. Which of the following is not considered a special journal?

A. purchases journal
B. cash receipts journal
C. general journal
D. cash payments journal
90. Which of the following journals is called an all-purpose journal?

A. General journal
C. Revenue journal
D. Accounting journal
91. Which of the following is true about the revenue journal?

A. cash revenues and revenues on account are recorded in the revenue journal
B. only cash revenues are recorded in the revenue journal
C. only revenues on account are recorded in the revenue journal
D. unearned revenues are also recorded in the revenue journal
92. The cash receipts journal will be used for

A. only cash received from customers on account.
B. all cash received.
C. cash received from customers on account and cash sales.
D. only cash received from cash sales.

93. An “Accounts Receivable Subsidiary Ledger” report shows
A. revenues by customer for a specified date range.
B. cash receipts by customer for a specified date range.
C. cash payments to creditors for a specific date range.
D. sales by customer as of a specific date.
94. A cash investment made by the owner should be recorded on the

A. cash receipts journal
B. purchases journal
C. cash payments journal
D. revenue journal
95. A withdrawal of cash made by the owner will be found in the

B. cash payments journal
C. revenue journal
D. purchases journal
96. An owner transfers a personal automobile to the company with a fair market value of $12,000. The entry
will be made in the
C. cash receipts journal
D. general journal
97. In which journal would adjusting entries be found?

C. general journal
98. In which journal would you find cash revenues recorded?

A. cash payments journal
B. general journal
C. revenues journal
D. cash receipts journal

99. In which journal would the payment of salaries be posted?
B. special journal
D. expense journal
100.
The following cash receipts headings have been suggested for Tower Tree-Trimming Service Company. Which
of the following statements is false?
Date Account Debited Post. Accounts Receivable Cr. Cash Other Accounts Dr.
Ref. Cr.

A. The second column should be Account Credited.
B. The Cash column should be a debit.
C. The Other Accounts column should be a credit.
D. The Accounts Receivable column should be a debit.

101. Which of the following is NOT a special journal?

A. cash receipts
B. purchases
C. accounts receivable
D. cash payments
102. Which of the following accounts normally has a subsidiary ledger?

A. capital stock
B. retained earnings
C. supplies
D. accounts payable
103. Which transaction is normally recorded in a special journal?

A. sales returns
B. depreciation expense
C. purchases on account
D. issued stock dividend

104. An adjustment resulting from a creditor charging too much for merchandise would be recorded in the:
A. general journal
105. The total on the "Cash Receipts" report at January 31 should equal

A. the total revenue earned for the month of January.
B. the total of the purchases journal on January 31.
C. the total of the Cash Debit column of the cash receipts journal.
D. the balance in Accounts Receivable at January 31.
106. Processing methods:
A. are the policy and procedures that protect assets from misuse.
B. must be computerized.
C. are the means by which the accounting system reports information.
D. ensure that business laws and regulations are followed.
107. If a company uses special journals

A. it must have one for cash, receivables, and payables
B. it may have no more than four
C. the quantity and design depend on the needs of the company
D. the design must comply with the FASB requirements
108. Computerized accounting systems

A. are only used by medium and large sized companies
B. are generally not as accurate as manual systems
C. record and post transactions at the same time
D. must make use of special journals
109. Mocha Coffee Shop has asked the accountant to keep track of the purchases for beverage, food, and retail
items. The accountant has implemented a purchases journal. Which of the following columns should be
included in the new purchases journal?
A. Accounts Payable - Cr., Beverage Supplies - Dr, Food Supplies - Dr, Retail Items Supplies - Dr, Other - Dr.
B. Accounts Payable - Dr, Other - Dr, Beverage Supplies - Cr, Food Supplies -Cr, Retain Items Supplies - Cr.
C. Beverage Supplies - Dr, Food Supplies - Dr, Retail Items Supplies - Dr, Other - Dr, Cash - Cr.
D. Beverage Supplies - Dr, Food Supplies - Dr, Retail Items Supplies - Dr, Other - Cr, Accounts Payable - Dr.

110. Beachside Coffee Shop, in an effort to stream line its accounting system, has decided to utilize a Cash
Receipts Journal in its operation. If the company is to record the cash sale of food for $18 which is the correct
entry?
A. Cash Cr. $18, Food Revenue Dr. $18,
B. Cash Dr. $18, Food Revenue Dr. $18
C. Cash Dr. $18, Food Revenue Cr. $18
D. Cash Cr. $18, Food Revenue Cr. $18
Receipts Journal in its operation. What will be recorded on the post ref column of this transaction?
Cash Receipts Journal

Date Account Post Ref Cash Bev Food Retail
Credited Dr Revenue Revenue Revenue
Cr Cr Cr
3/17/14 Cash Sale $35 $35

General Ledger Acct: Customer Acct

Cash 10 CCC 345
Acct Receivable 12 FFF 367
Retail Supplies 15
Beverage Revenue 41
Food Revenue 42
Retail Revenue 43

A. 10
B. 15
C. 42
D. Ö

112. A computerized accounting system will not allow which of the following type of journalizing error?
A. Entering an amount in an incorrect account
B. Reversing the debit and credit account in a transaction
C. Processing a transaction that has unequal debits and credits.
D. Entering a transaction with an incorrect date.

113. Which of the following is not an advantage of a computerized system over a manual system?
A. transactions are recorded and posted at the same time
B. accuracy is usually better with a computerized system
C. current balances are always available
D. internal controls are optional to the computerized system
114. In addition to B2B and B2C transactions, e-commerce is commonly used in all of the following business
activities except:
A. supply chain management
B. regulatory compliance management
C. customer relationship management
D. product life cycle management
115. Month-end posting to controlling accounts in a computerized accounting system is not required because
A. controlling accounts are not used in computerized systems.
B. transactions are posted to accounts immediately.
C. the input operator can choose to post to accounts at any time.
D. computerized accounting posts entry at the end of the financial year.

A. is a tedious form of recordkeeping process.
B. improve the timeliness of reporting.
C. prevent all journalizing errors.
D. are only used in medium and large businesses.
117. Which of the following statements is false?

A. Most computerized accounting systems use principles from manual systems.
B. Subsidiary ledgers and special journals are only useful when a business doesn’t have a large number of
similar transactions.
C. Even small companies use computerized accounting systems.
D. Large companies often integrate their accounting system with their automated business systems.
118. What is meant by the term B2C?

A. Balance to cash
B. Business to cash
C. Book to capital
D. Business to consumer

119. E-commerce
A. accounts for less than 1% of all retail sales.
B. only relates to transactions between a company and a consumer
C. can improve the speed and efficiency of transactions.
D. increases paperwork.
120. When using a purchases journal

A. all cash and credit purchases are recorded in the journal.
B. posting to creditor accounts is only done at the end of the month.
C. the “Other Accounts” total is posted to Accounts Payable at month’s end.
D. there will always be an “Accounts Payable Cr.” column.
121. Which of the following could not be considered a business segment?

A. Region
B. Product
C. Customer Type
D. All of these could be considered business segments.
122. Segment data:
A. can be used for vertical, but not horizontal analysis.
B. is gathered from invoice data.
C. is only useful by product line.
D. analysis is required by GAAP.
123. When using a revenue journal:

A. both a “Fees Earned” and an “Accounts Receivable” column are included.
B. both cash sales and sales on account are posted to the journal.
C. revenues are normally recorded when the company sends customer invoices.
D. postings to customer accounts are done at month end.
124. Waller Company does business in two regional segments: North and South. The following annual revenue
information was determined from the accounting system’s invoice information:
Segment 2014 2013

North $ 75,000 $100,000
South 260,000 200,000
Total revenues $335,000 $300,000
Using horizontal analysis, determine the percentage change in revenues for the North region.
Round to one decimal place.
A. 22.4%
B. (25.0%)
C. 25.0%
D. (22.4%)

Segment 2014 2013

North $ 75,000 $100,000
South 260,000 200,000
Using horizontal analysis, determine the percentage change in revenues for the South region.
A. 30.0%
B. 77.6%
C. (30.0%)
D. (77.6%)

126. The following is an example of:
Segment 2014 2013 Amount Percent

College textbooks $78,000 $55,000 $23,000 41.8%
High school textbooks 129,000 115,000 14,000 12.2%
Elementary school textbooks 105,000 121,000 (16,000) (13.2%)
Total textbook revenue $312,000 $291,000 $21,000 7.2%

A. product analysis
B. vertical analysis
C. horizontal analysis
D. percentage analysis

Segment 2014 Percent 2013 Percent

College textbooks $78,000 25.0% $55,000 18.9%
High school textbooks 129,000 41.3% 115,000 39.5%
Elementary school textbooks 105,000 33.7% 121,000 41.6%
Total textbook revenue $312,000 100% $291,000 100%

A. product analysis

128. Briefly describe the three-step process of accounting system development.

129. Define and describe an accounting system.

130. Utilizing the Revenue Journal, below, journalize the following five transactions of Porshe Creations:
(a) On March 20th Porshe sells 25 cell phone covers to Xtreme at $4.50 per cover on invoice 887.
(b) On March 21st Porshe sells 5 cell phone covers to Sidekick for $7.50 per cover on invoice 908.
(c) On March 22nd Porshe sells 18 cell phone covers to Rock-On at $4.25 per cover on invoice 938.
(d) On March 26th Porshe sells 200 cell phone covers to Micro at $3.75 each on invoice 959.
(e) On March 29th Porshe sells 6 cell phone covers to Charmers for $8.35 each on invoice 997.
Pg 15
Revenue Journal
Invoice Post A/R Dr.
Date: No. Account Debited Ref. Sales Rev Cr.

131. Discuss the process of posting from a revenue journal to the subsidiary ledger and to the general ledger.

132. The debits and credits from two transactions are presented in the following customer account:
NAME: Boogie Board Water Wear

ADDRESS: 2340 Xtreme Surf
Date Item Post Ref Debit Credit Balance

July 1 Balance 805
July 6 Invoice 406 R42 645 1,450
July 24 Invoice 456 CR56 710 740

Describe each transaction and the source of each posting.

133. The following purchase transactions occurred during August for Backcountry Kayak Company.
Aug 1 Purchased kevlar kayaks for $5,600 on account from Gear Inc.
Aug 6 Purchased kevlar kayaks for $3,250 on account from Southland Company.
Aug 14 Purchased kayak paddles for $2,500 on account from Gear Inc.
Record these transactions in a purchase journal.
Purchases Journal
Date Acct Cr Post Ref Acct Pay Cr Kevlar Other Accts Post Ref Amount
KayaksDr Dr

134. The debits and credits from two transactions are presented in the following creditor’s account:
NAME Windsurf, Inc.

ADDRESS 343 Coastline Road

Aug 1 Balance 1,210
8 Invoice 333 CP38 1,210 0
15 Invoice 567 P11 735 735


135. Define the meaning of B2C and B2B.

136. The discovery and correction of errors is important in a computerized system. What kind of error(s) might
occur in these systems? What type of error(s) will be prevented in a computerized system?

137. Describe and discuss e-commerce.

138. The Internet creates opportunities for improving the speed and efficiency of transactions. Name and
describe three key areas besides e-commerce where the Internet is being used for business purposes.

139. Morgan Company has the following segment revenues for fiscal 2014 and 2013.
2014 2013
(in millions) (in millions)
U.S. $825.0 $600.00
Canada 325.5 345.5
Other countries 215.5 168.5
Total Revenues 1,366.0 1,114.0
Prepare a horizontal analysis of the segment data using 2013 as the base year.

2011 2010
U.S. $775.0 $650.00
Canada 325.5 245.5
Prepare a vertical analysis of the segment data.

141. Johnson Corporation provided revenue disclosures for 2009 by its major product segments in the notes to
its financial statements as follows:
Major Product Segments Fiscal Year 2009 (in millions)

Petroleum-based products $10,450
Industrial chemicals 9,460
Refined chemical products 8,575
Food additives 7,325
Emulsifiers 6,900
Pesticides 5,870
Salts 4,545
Wetting agents 3,215
Total Revenues $56,340
Prepare a vertical analysis.

142. Explain whether each of the following would usually be used in a computerized accounting system and
why.
1. Special journals
2. Accounts receivable control accounts
3. Electronic invoice form
4. Month-end postings to the general ledger

143. For each of the following businesses, explain how a purchase journal might be modified for the specific
business.
1. North County Medical Center
2. Tri-County Farms, Inc.
3. Prescott’s Quick Lube and Tire Store

144. For each of the following business, explain how a revenue journal might be modified for the specific
business.
1. Jon’s Auto Repair Business
2. Esquire Movie Theater
3. Beach Hut Snack Bar, Restaurant, and Lounge

145. Explain what subsidiary ledgers are and give examples of three types of subsidiary ledgers that a business
might use.

146. Mobile Service Corp. has the following debits and credits from two transactions presented in the a
customer account:
NAME: Gen-X Products, Inc.

Address: 123 My Way
Date Item Post. Ref. Debit Credit Balance

Mar.1 Balance Ö 1,150
Mar. 10 Invoice 987 R45 990 2,140
Mar. 19 Invoice 995 CR78 825 1,315

147. Vision Service Company has the following debits and credits from two transactions presented in a
customer account:
NAME: Roswell Communications, Inc.

Address: 345 Alien Way

May 1 Balance Ö 750
May 14 Invoice 522 CR 230 625 125
May 25 Invoice 545 R115 3,500 3,625

148. The debits and credits from two transactions are presented in the following supplier’s (creditor’s) account:
NAME: Xample, Inc.

Address: 567 Harrison Blvd.

Nov 1 Balance Ö 125
Nov 9 Invoice 564 CP 45 55 70
Nov 18 Invoice 574 P28 75 145

NAME: Banner Computer Services, Inc.

Address: 890 Novice Lane

July 1 Balance Ö 5,645
July 19 Invoice 45 P16 1,755 7,400
July 26 Invoice 39 CP36 3,500 3,900

150. The following cash receipts journal heading have been suggested for Tower Tree-Trimming Service
Company. What problems do you see with these headings?
Date Account Credited Post. Fees Earned Accounts Receivable Cr. Cash Other Accounts Dr.
Ref. Cr. Cr.

151. Davidson, Inc. incurred the following transactions during the month of January. Record the appropriate
ones in the Cash receipts journal. If a transaction should not be recorded in the Cash receipts journal, indicate
where it should be posted.
(a) On January 3rd a one-year insurance policy was purchased for $2,400. The account number for Prepaid Insurance is 16.
(b) On January 5th Davidson received a payment on account from Pasher Industries of $625.
(c) On January 12th Davidson made sales on account of $3,500 and sales for cash of $2,300. The Fees Earned account
number is 41.
(d) On January 26th Davidson received $1,250 in rent revenue from a tenant who leases a portion of their building. The Rent
Revenue account number is 44.
(e) On January 29th Davidson received a payment on account from Gooden, Inc. for $2,000.
Other Account Accounts

Account Credited Post. Cr. Receivable Cr. Cash
Date Ref. Dr.

152. Anderson, Inc. incurred the following transactions during the month of February, 2010. Record the
appropriate ones in the Cash payments journal. If a transaction should not be recorded in the Cash payments
journal, indicate where it should be posted.
(a) On February 3rd the company purchased $650 worth of supplies on account. The Supplies account number is 15.
(b) On February 5th Anderson made a payment on account to Sanders Industries in the amount of $1,125 - check number
2004.
(c) On February 14th Anderson bought a one-year insurance policy for $1,500. The Prepaid Insurance account number is 14
- check number 2005
(d) On February 22nd Anderson paid monthly rent of $2,000. The Rent Expense account number is 63 - check number 2006.
(e) On February 26th Anderson purchased equipment making a down payment of $3,000 (check number 2007) and agreeing
to pay the $4,000 balance in 30 days. The Equipment account number is 18.
Other Account Accounts Payable

Check Number Post. Dr. Dr. Cash
Date Account Debited Ref. Cr.

153. The following purchases journal headings have been suggested for Tower Tree-Trimming Service
Accounts Receivable Cr. Other Accounts Dr.

Account Credited Post. Accounts Payable Dr. Cash
Date Ref. Cr.

154. List the 4 most common special journals used in accounting and describe the transaction recorded in each
journal.

155. Westsouth Publishing reports the following segment data regarding its textbook sales:
Segment 2014 2013

College textbooks $78,000 $55,000
High school textbooks 129,000 115,000
Elementary school textbooks 105,000 121,000
Total textbook revenue $312,000 $291,000
Perform a horizontal analysis and a vertical analysis for Westsouth Publishing Company. Round to one decimal place.

156. Identify the three main advantages of a computerized accounting system over a manual accounting
system.

157. What is a business segment? How can business segments be analyzed?

158. If a two-column (all-purpose) general journal, a revenue journal, and a cash receipts journal are used,
indicate the journal in which each of the following transactions should be recorded:
(a) Investment of additional cash in the business by the owner.

(b) Rendering of services for cash.
(c) Rendering of services on account.
(d) Receipt of cash on account from a customer.
(e) Sale of office supplies for cash, at cost, to a neighboring business.
(f) Adjustment to record supplies used at the end of the year.
(g) Closing of drawing account at the end of the year.

159. If a two-column (all-purpose) general journal, a purchases journal, and a cash payments journal are used,
(a) Payment of rent.

(b) Purchase of supplies on account.
(c) Purchase of computer on account.
(d) Purchase of supplies for cash.
(e) Advance payment of a one-year fire insurance policy on the office.
(f) Adjustment to record accrued salaries at the end of the period.
(g) Adjustment to record depreciation at the end of the month.
(h) Payment of an account payable.

160. The posting references in the following purchases journal are indicated by letters. Identify each posting
reference [(a) through (i)] as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary
ledger account, or (3) that no posting is required.
PURCHASES JOURNAL )
Accounts Office Store )
Account Post. Payable Supplies Supplies )
Credited Ref. Cr. Dr. Dr. )
Date
July )
3 Morton Company (a) 1,150 ..... 1,150 )
7 Jackson Co. (b) 4,800 4,800 ..... )
14 Fallon Inc. (c) 7,000 7,000 ..... )
26 Simpson Bros. (d) 2,350 ..... ..... )
31 15,300 11,800 1,150 )
(e) (f) (g) )
(
(
( Other Accounts Dr.
( Post.
( Account Ref. Amount
(
( ...... ... ......
( ...... ... ......
( ...... ... ......
( ...... ... ......
( Equipment (h) 1,950
( 1,950
( (i)

161. The posting references in the following revenue journal are indicated by letters. Identify each posting
reference [(a) through (h)] as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary
REVENUE JOURNAL
Post Acct. Rec. Dr.
Date Invoice No. Account Debited Ref. Fees Earned Cr.
April 3 190 Hill Company (a) 4,750
8 191 North Supply (b) 5,025
13 192 Macon Inc. (c) 2,100
17 193 White Products (d) 6,000
25 194 Easton Supply (e) 2,250
30 195 Karson Enterprises (f) 3,750
30 23,875
(g) (h)

162. The following are selected transactions related to purchases on account and cash payments completed
during April of the current year.
Apr 1 Issued Check No. 60 in payment of rent for month, $2,400.

5 Purchased office supplies from Clauson Co., $850.
9 Issued Check No. 61 to Dame Co. for $9,750 for cash purchase of equipment.
10 Purchased store supplies from Ewing Co., $425.
15 Issued Check No. 62 to Clauson Co. in payment of April 5 invoice.
17 Purchased store supplies from Patton Co., $7,500.
20 Issued Check No. 63 to Ewing Co. in payment of April 10 invoice of $425.
25 Purchased equipment from Sloan Co., $7,750.
27 Issued Check No. 64 to Patton Co.for partial payment of the April 17 invoice, $4,000.
30 Purchased office supplies from Winthrop Co., $400.
(a) Record the transactions, using the accompanying journals.

(b) Total and rule the purchases and cash payments journals as of April
30.
(c) Indicate the method of posting the individual items and the totals of
the purchases and cash payments journals in the following manner:
(1) For individual items and totals to be posted to the subsidiary ledger or not to be posted, insert a check mark in the Posting
Reference column or below the totals.
(2) For individual items and totals to be posted to the general ledger, insert the letter "G" (as a substitute for specific account
numbers) in the Posting Reference column or below the totals.
CASH PAYMENTS JOURNAL

Other Accounts
Check Account Post. Accounts Payable Cash
Date No. Debited Ref. Dr. Dr. Cr.

PURCHASES JOURNAL )
Accounts Store )
Account Post. Payable Supplies )
Date Credited Ref. Cr. Dr. )

(
Office
( Post.
Suppli
es
Dr.

163. Listed below are selected transactions completed by Ridge Company during March of the current year.
Mar 5 Rendered services on account to Quinton Co., Invoice No. 92, $3,250.
10 Rendered services on account to Martin Inc., Invoice No. 93, $4,500.
13 Received $5,000 in payment of monthly rent, which was due on March 1.
15 Received payment from Quinton Co. for invoice of March 5.
19 Received payment from Martin Inc. for balance due on invoice of March 10.
20 Received amount due from Thomas Co. on sale made in February, $5,200.
31 Recorded cash from services rendered for cash during the month, $15,750.
(a) Record the transactions, using the accompanying revenue journal
and cash receipts journal.
(b) Total and rule the revenue and cash receipts journals.
(c) Indicate the method of posting the individual items and the
columnar totals of the revenue and cash receipts journals in the
following manner:
REVENUE JOURNAL
Post. Accts. Rec. Dr.
Date Invoice No. Account Debited Ref. Services Revenue Cr.

CASH RECEIPTS JOURNAL

Other Accts.
Account Post. Accounts Rec. Cash
Date Credited Ref. Cr. Cr. Dr.

164. Down-Under, an aquatic supply store, makes the following five payments during August. Journalize them
in the Cash Payments Journal as appropriate.
(a) On August 2nd, Down-Under paid Pondmaster, Inc with check 6420 for 6 pumps at $435.00 each. The pumps had been purchased
in July on account.
(b) On August 10th, Down-Under purchased $785.00 of office supplies from Business Systems with check 6421.
(c) On August 15th, Down-Under pays Aqua Magic $215.00 on account with check 6422.
(d) On August 27th, Down-Under pays an invoice for merchandise received earlier from Spindrifter, Inc. for eight drains at $73.50
each. They wrote check 6423.
(e) On August 31st, Down-Under purchased $65.00 of Koi clay from The Natural Wonder Company by writing check 6424. (Utilize
Pond Supplies Expense).
Cash Pg 17
Payments Journal
Date: Check Account Debited Post Other Accounts Cash
Number Ref. Acct Payable: Cr:
Dr:

GJ Page 41
165. Voya
ger
Electronic
Services
has three
customers
in its
Accounts
Receivable
Subsidiary
Ledger
with the
following
detail:
Fred Yao
Ming –
Beginning
balance
$1,150.00
Kohl
Townson –
Beginning
balance
$850.00
Chandra
Jahi –
Beginning
balance
$1,075.00
Accounts
Receivable
controlling
Account
balance
$3,075.00
Journalize
then post
the
following
five
transaction
s to the
General
Journal.
Then post
the journal
entries to
the
Accounts
Receivable
Subsidiary
Ledger.
Update the
balance of
the
Accounts
Receivable
controlling
Account
balance.
On June
3rd, Kohl
Townson
pays
$325.00
on
account.
On June
10th,
Chandra
Jahi
purchases
$475.00
on
account.
On June
15th, Fred
Yao Ming
pays
$395.00
on
account.
On June
16th, Fred
Yao Ming
purchases
$685.00
on
account.
On June
23rd, Kohl
Townson
purchases
$155.00
on
account.

General
Journal
Date: Account Title Post Debit: Credit:

Ref:

Accounts Receivable -
controlling Account
Date: Item: Post Ref: Debit: Credit: Balance:
BB 3,075.00

Accounts
Receivabl
e - Fred
Yao Ming
BB 1,150.00

Accounts
Receivabl
e - Kohl
Townson
BB 850.00

Accounts
Receivabl
e-
Chandra
Jahi
BB 1,075.00

166. Sunrise Coffee Shop, in an effort to stream line their accounting system, has decided to utilize a Cash
Receipts Journal in its operation. Record the following transactions to the Cash Receipts Journal for the first
two weeks in March, add the columns, and include the Post Reference information from the accounts given.
Are there any additional columns you would add to this journal?

Date Account Post Ref Cash Bev Food Other
Credited Dr Revenue Revenue Cr
Cr Cr

Mar 1 Cash received for beverages $375
Mar 1 Cash received for food $250
Mar 1 Cash received for customer sales of Sunrise’s signature coffee mugs $130
Mar 10 Cash received on Account from Central.com $900
General ledger Acct: Customer Acct

Cash 10 Central.com 245
Retail Supplies 15
Beverage Revenue 41
Food Revenue 42
Retail Revenue 43

167. Read each transaction and identify the appropriate journal that it should be recorded in;
1. Owner withdrew supplies

2. Sale made on account
3. Payment to vendor on account
4. Payment received from customer on account
5. Purchases on account
6. Adjusting journal entry for supplies used
7. Owner withdrew cash
8. Company borrows money from bank
9. Record monthly depreciation
10. Close revenue accounts at month end

Chapter 5--Accounting Systems Key

1. Businesses must implement controls to help guide the behavior of their employees toward business
objectives.
TRUE
2. The methods or procedures used to record and report financial data are called the accounting system.
TRUE
3. Systems analysis is the final phase in the creation or revision of an accounting system.
FALSE
4. Processing methods are the means by which the system collects, summarizes, and reports accounting
information.
TRUE
5. Accounting systems evolve through a three-step process: analysis, design and feedback.
FALSE
6. An accounting system is the methods and procedures used to collect, classify, summarize, and report the
businesses financial information
TRUE
7. Most accounting systems evolve as the business grows and requires changes in their methods for collecting,
accumulating, and reporting information.
TRUE
8. Once an accounting system has been implemented, feedback will be used to continuously analyze and
improve the system.
TRUE

9. Analysis of user needs is the final phase in the creation or revision of an accounting system.
FALSE
10. When specialized journals are used, the general journal is not necessary.
FALSE
11. Specialized journals are books of original entry.

TRUE
12. Transactions must first be recorded into the general journal before they can be entered into specialized
journals.
FALSE
13. The format and number of specialized journals that a business uses depends upon the legal organization of
the business.
FALSE
14. The basic procedure of posting from a revenue journal is to make all postings at the end of the month.
FALSE
15. The principal ledger that contains all the balance sheet and income statement accounts is the general ledger.
TRUE
16. The presence of a subsidiary ledger requires the presence of a summarizing controlling account.
TRUE
17. The account for each supplier of merchandise will appear in the accounts payable subsidiary ledger.
TRUE
18. The customers subsidiary ledger is controlled by the general ledger account entitled Accounts Payable.
FALSE

19. 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 into the Revenue journal.
TRUE
20. Purchases of store equipment on account are recorded in the general journal.

FALSE
21. A controlling account is used to record the details of the individual accounts.
FALSE
22. A cash refund paid to a customer who overpaid an account receivable is recorded in the cash payments
journal.
TRUE
23. A personal withdrawal of cash is recorded in the general journal.

FALSE
24. Services provided for cash is recorded in the revenue journal.

FALSE
25. Services provided on account is recorded in the revenue journal.

TRUE
26. Sales of office supplies for cash, at cost, to a neighboring business as an accommodation, are recorded in the
revenue journal.
FALSE
27. 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.
FALSE

28. 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.
TRUE
29. Purchase journals will have an Other Accounts Cr. column.

FALSE
30. The use of subsidiary ledgers is limited to Accounts Payable and Accounts Receivable.
FALSE
31. The revenue journal is to make it more efficient to record sales transactions made for cash.
FALSE
32. The post reference column of the revenue journal will reference the account number of the customer.
FALSE
33. The total of the accounts receivable subsidiary accounts and the account receivable controlling account
should balance to each other at the end of the period.
TRUE
34. Adjusting journal entries are recorded in a special journal.

FALSE
35. Closing journal entries are recorded in the general journal.

TRUE
36. The accounts receivable subsidiary ledger is an example of a special journal.

FALSE
37. Posting from a revenue journal to the customer account is normally done only at the end of the month.
FALSE

38. The purchase of supplies for cash would be recorded in the purchases journal.
FALSE
39. When a large number of individual accounts with a common characteristic are grouped together, accounting
calls this a controlling account.
TRUE
40. The customers ledger and the creditors ledger refer to subsidiary ledgers.
TRUE
41. The total on the "Accounts Payable Creditors 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.
FALSE
42. The accounts included on specialized journals should not be customized for a businesses particular
activities.
FALSE
43. Generally, subsidiary ledgers are used for accounts that consist of a large number of individual items.
TRUE
44. Updating information in a computerized accounting system happens at the end of the month.
FALSE
45. In computerized accounting systems, reports may be generated at any time.

TRUE
46. Computerized accounting systems prevent all journalizing errors.

FALSE

47. Using the Internet to perform business transactions is called e-commerce.
TRUE
48. The term B2C refers to transactions conducted between two companies.

FALSE
49. E-commerce provides business opportunities at a higher cost.

FALSE
50. One way to report revenue earned by a company is to present it by the different segments of business.
TRUE
51. Match the transaction below with the journal or ledger in which it would be entered.
1. monthly adjustment for supplies used General journal 1

Accounts receivable subsidiary
2. record payment made to vendor ledger 4
3. record sale on account to customer Revenue journal 3
4. cash receipt posting to an individual
customer account Purchase journal 5
5. record purchase on account from vendor Cash receipts journal 7
6. cash payment posting to an individual
vendor account Cash payments journal 2
Accounts payable subsidiary
7. record payment received from customer ledger 6

52. Match the following types of journal transactions with the journal in which it would be entered.
1. Equipment purchased on account Revenue journal 3

2. Adjusting entry Cash payments journal 4
3. Sale on account General journal 2
4. Payment for supplies bought on account Cash receipts journal 5
5. Collection on account Purchases journal 1

53. Select the correct subsidiary ledger and appropriate posting for each of the following customer and creditor
activities.
1. Accounts receivable subsidiary ledger;

Accounts receivable CR Sales on account 2
2. Accounts receivable subsidiary ledger; Collections from customers
Accounts receivable DR on account 1
3. No subsidiary ledger posting Purchases on account 4
4. Accounts payable subsidiary ledger; Payments to creditors on
Accounts payable CR account 5
5. Accounts payable subsidiary ledger; Adjusting entry for expired
Accounts payable DR insurance 3

54. 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
55. 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
56. 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
57. Which of the following is not part of a three-step process that a growing business uses for the evolution of
its accounting systems?
A. analysis
B. design
C. implementation
D. feedback
58. 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

59. The goal of systems analysis is to determine
A. when to implement a system
B. information needs
C. the size of the competitor's system
D. changes to the present system
60. 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
61. After an accounting system has been set up, what is the next step?
A. Analysis
B. Feedback
C. Implementation
D. Internal controls
62. 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
63. 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
64. The subsidiary ledger that includes customer account activity is called the
A. asset ledger
B. accounts payable ledger
C. expense ledger
D. accounts receivable ledger

65. Every controlling account must have its own
A. revenue ledger
B. general ledger
C. subsidiary ledger
D. journal
66. At the end of the month, the total of the amount column of the revenue journal is posted as a
A. debit to Accounts Receivable and a credit to Cash
B. debit to Accounts Receivable and a credit to Fees Earned
C. debit to Cash and a credit to Fees Earned
D. debit to Cash and a credit to Accounts Payable
67. The controlling account in the general ledger that summarizes the debits and credits to the individual
customers accounts in the subsidiary ledger is entitled
A. Purchases
B. Accounts Payable
C. Fees Earned
D. Accounts Receivable
68. When there are a large number of individual accounts with a common characteristic, it is common to place
them in a separate ledger called a(n)
A. General ledger
B. Income Statement Ledger
C. Group Ledger
D. Subsidiary Ledger
69. A purchase of supplies for cash is recorded in the

A. Revenue journal
70. A purchase of supplies on account is recorded in the

A. Revenue journal
B. General journal
C. Purchases journal

71. Which of the following transactions is recorded in the purchases journal?
A. purchase of store supplies on account
B. return of damaged office equipment
C. purchase of store supplies for cash
D. purchase of office equipment for cash
72. When posting a column total in the purchases journal, a credit should be posted to
A. Merchandise Inventory
B. Accounts Payable
C. Sales Returns and Allowances
D. Cash
73. In which journal would an adjustment for an overcharge by a creditor be recorded?

A. General journal
D. Cash Receipts journal
74. Which of the following transactions is recorded in the revenue journal?

A. sale of excess office equipment for cash
B. rendering services for cash
D. sale of excess office equipment on account
75. Each individual entry in the Revenue Journal is posted to

A. the Accounts Receivable controlling account
B. the accounts receivable subsidiary ledger
C. the Revenue controlling account
D. the accounts receivable subsidiary ledger and the controlling account

A. services rendered for cash
B. correction of error in billing client
C. purchases of equipment on account
D. purchases of equipment for cash

A. rendering services for cash
B. purchases of supplies on account
D. closing entries
78. Which of the following is recorded in the cash receipts journal?

A. cash withdrawn by the owner
B. cash purchase of equipment
C. cash received on customer's account
D. adjusting entry for depreciation
79. Services performed for cash should be recorded in the

A. Revenue journal
80. Which of the following is recorded in the cash payments journal?

A. adjusting entry for accrued salaries
B. receipt of cash on supplies returned
C. receipt of cash from services rendered
D. payment of employees' salaries
81. A Cash Payments journal would not include a

A. Cash credit column
B. Sales Discounts credit column
C. Accounts Payable debit column
D. Other Accounts debit column
82. In which journal is the return of supplies purchased on account recorded?

A. General journal

83. A cash purchase of supplies should be recorded in the
A. Cash Receipts journal
B. Purchase journal
C. General journal
84. When posting the column totals of a cash payments journal, a debit should be posted to
A. Cash
B. Accounts Payable
C. Sales Discounts
D. Unearned Revenue
85. In which journal is the receipt of a promissory note from a customer on account recorded?
A. Revenue journal
C. General journal
86. Subsidiary ledgers
A. are used only for Accounts Payable and Accounts Receivable
B. may be used for various ledger accounts
C. may be used for only for the Cash account
D. are never used for more than four accounts
87. Some of the more common subsidiary ledgers are:

A. Accounts Payable, Accounts Receivable, and Owner’s Equity subsidiary ledgers.
B. Accounts Receivable and Accounts Payable subsidiary ledgers.
C. Accounts Receivable, Accounts Payable, Cash, Checking, Petty Cash, and Owner’s Equity subsidiary
ledgers.
D. Cash and Owner’s Equity subsidiary ledgers.

88. If the individual subsidiary ledger accounts of Accounts Receivable and Accounts Payable contained the
following data:
Cadence Company - Vendor - $250 credit balance
Franklin Enterprises - Customer - $750 debit balance
Marcelo Construction - Client - $125 - debit balance
Peyton Supplies - Supplier - $375 - credit balance
The Accounts Receivable (A/R) controlling account and the Accounts Payable (A/P) controlling account
balances would be:
A. A/R - $1,000, A/P - $500
B. A/R - $625, A/P - $875
C. A/R - $875, A/P - $625
D. A/R - $750, A/P - $750
89. Which of the following is not considered a special journal?

B. cash receipts journal
C. general journal
D. cash payments journal
90. Which of the following journals is called an all-purpose journal?

A. General journal
C. Revenue journal
D. Accounting journal
91. Which of the following is true about the revenue journal?

A. cash revenues and revenues on account are recorded in the revenue journal
B. only cash revenues are recorded in the revenue journal
C. only revenues on account are recorded in the revenue journal
D. unearned revenues are also recorded in the revenue journal
92. The cash receipts journal will be used for

A. only cash received from customers on account.
B. all cash received.
C. cash received from customers on account and cash sales.
D. only cash received from cash sales.

93. An “Accounts Receivable Subsidiary Ledger” report shows
A. revenues by customer for a specified date range.
B. cash receipts by customer for a specified date range.
C. cash payments to creditors for a specific date range.
D. sales by customer as of a specific date.
94. A cash investment made by the owner should be recorded on the

D. revenue journal
95. A withdrawal of cash made by the owner will be found in the

C. revenue journal
96. An owner transfers a personal automobile to the company with a fair market value of $12,000. The entry
will be made in the
C. cash receipts journal
D. general journal
97. In which journal would adjusting entries be found?

C. general journal
98. In which journal would you find cash revenues recorded?

A. cash payments journal
B. general journal
C. revenues journal

99. In which journal would the payment of salaries be posted?
B. special journal
D. expense journal
100.
The following cash receipts headings have been suggested for Tower Tree-Trimming Service Company. Which
of the following statements is false?
Date Account Debited Post. Accounts Receivable Cr. Cash Other Accounts Dr.
Ref. Cr.

A. The second column should be Account Credited.
B. The Cash column should be a debit.
C. The Other Accounts column should be a credit.
D. The Accounts Receivable column should be a debit.

101. Which of the following is NOT a special journal?

A. cash receipts
B. purchases
C. accounts receivable
D. cash payments
102. Which of the following accounts normally has a subsidiary ledger?

A. capital stock
B. retained earnings
C. supplies
D. accounts payable
103. Which transaction is normally recorded in a special journal?

A. sales returns
B. depreciation expense
C. purchases on account
D. issued stock dividend

104. An adjustment resulting from a creditor charging too much for merchandise would be recorded in the:
A. general journal
105. The total on the "Cash Receipts" report at January 31 should equal

A. the total revenue earned for the month of January.
B. the total of the purchases journal on January 31.
C. the total of the Cash Debit column of the cash receipts journal.
D. the balance in Accounts Receivable at January 31.
106. Processing methods:
A. are the policy and procedures that protect assets from misuse.
B. must be computerized.
C. are the means by which the accounting system reports information.
D. ensure that business laws and regulations are followed.
107. If a company uses special journals

A. it must have one for cash, receivables, and payables
B. it may have no more than four
C. the quantity and design depend on the needs of the company
D. the design must comply with the FASB requirements

A. are only used by medium and large sized companies
B. are generally not as accurate as manual systems
C. record and post transactions at the same time
D. must make use of special journals
109. Mocha Coffee Shop has asked the accountant to keep track of the purchases for beverage, food, and retail
items. The accountant has implemented a purchases journal. Which of the following columns should be
included in the new purchases journal?
A. Accounts Payable - Cr., Beverage Supplies - Dr, Food Supplies - Dr, Retail Items Supplies - Dr, Other - Dr.
B. Accounts Payable - Dr, Other - Dr, Beverage Supplies - Cr, Food Supplies -Cr, Retain Items Supplies - Cr.
C. Beverage Supplies - Dr, Food Supplies - Dr, Retail Items Supplies - Dr, Other - Dr, Cash - Cr.
D. Beverage Supplies - Dr, Food Supplies - Dr, Retail Items Supplies - Dr, Other - Cr, Accounts Payable - Dr.

Receipts Journal in its operation. If the company is to record the cash sale of food for $18 which is the correct
entry?
A. Cash Cr. $18, Food Revenue Dr. $18,
B. Cash Dr. $18, Food Revenue Dr. $18
C. Cash Dr. $18, Food Revenue Cr. $18
D. Cash Cr. $18, Food Revenue Cr. $18
Receipts Journal in its operation. What will be recorded on the post ref column of this transaction?

Date Account Post Ref Cash Bev Food Retail
Credited Dr Revenue Revenue Revenue
Cr Cr Cr
3/17/14 Cash Sale $35 $35

General Ledger Acct: Customer Acct

Cash 10 CCC 345
Retail Supplies 15
Beverage Revenue 41
Food Revenue 42
Retail Revenue 43

A. 10
B. 15
C. 42
D. Ö

112. A computerized accounting system will not allow which of the following type of journalizing error?
A. Entering an amount in an incorrect account
B. Reversing the debit and credit account in a transaction
C. Processing a transaction that has unequal debits and credits.
D. Entering a transaction with an incorrect date.

113. Which of the following is not an advantage of a computerized system over a manual system?
A. transactions are recorded and posted at the same time
B. accuracy is usually better with a computerized system
C. current balances are always available
D. internal controls are optional to the computerized system
114. In addition to B2B and B2C transactions, e-commerce is commonly used in all of the following business
activities except:
A. supply chain management
B. regulatory compliance management
C. customer relationship management
D. product life cycle management
115. Month-end posting to controlling accounts in a computerized accounting system is not required because
A. controlling accounts are not used in computerized systems.
B. transactions are posted to accounts immediately.
C. the input operator can choose to post to accounts at any time.
D. computerized accounting posts entry at the end of the financial year.

A. is a tedious form of recordkeeping process.
B. improve the timeliness of reporting.
C. prevent all journalizing errors.
D. are only used in medium and large businesses.
117. Which of the following statements is false?

A. Most computerized accounting systems use principles from manual systems.
B. Subsidiary ledgers and special journals are only useful when a business doesn’t have a large number of
similar transactions.
C. Even small companies use computerized accounting systems.
D. Large companies often integrate their accounting system with their automated business systems.
118. What is meant by the term B2C?

A. Balance to cash
B. Business to cash
C. Book to capital
D. Business to consumer

119. E-commerce
A. accounts for less than 1% of all retail sales.
B. only relates to transactions between a company and a consumer
C. can improve the speed and efficiency of transactions.
D. increases paperwork.
120. When using a purchases journal

A. all cash and credit purchases are recorded in the journal.
B. posting to creditor accounts is only done at the end of the month.
C. the “Other Accounts” total is posted to Accounts Payable at month’s end.
D. there will always be an “Accounts Payable Cr.” column.
121. Which of the following could not be considered a business segment?

A. Region
B. Product
C. Customer Type
D. All of these could be considered business segments.
122. Segment data:
A. can be used for vertical, but not horizontal analysis.
B. is gathered from invoice data.
C. is only useful by product line.
D. analysis is required by GAAP.
123. When using a revenue journal:

A. both a “Fees Earned” and an “Accounts Receivable” column are included.
B. both cash sales and sales on account are posted to the journal.
C. revenues are normally recorded when the company sends customer invoices.
D. postings to customer accounts are done at month end.
Segment 2014 2013

North $ 75,000 $100,000
South 260,000 200,000
Using horizontal analysis, determine the percentage change in revenues for the North region.
A. 22.4%
B. (25.0%)
C. 25.0%
D. (22.4%)

Segment 2014 2013

North $ 75,000 $100,000
South 260,000 200,000
Using horizontal analysis, determine the percentage change in revenues for the South region.
A. 30.0%
B. 77.6%
C. (30.0%)
D. (77.6%)



A. product analysis



A. product analysis

128. Briefly describe the three-step process of accounting system development.
(1) Analysis. Identify the needs of those who use the business's financial information and determine how the system should
provide this information.
(2) Design. The system is designed so that it will meet the users' needs.
(3) Implementation. The chosen system is put in place.
129. Define and describe an accounting system.
An accounting system is the methods and procedures for collecting, classifying, summarizing and reporting a
business’s financial information. Accounting systems for large companies often record more than just basic
data (i.e. ticket sale data for an airline). These systems evolve through the process of (1) analysis of information
needs, (2) system design and (3) implementation of the design.
130. Utilizing the Revenue Journal, below, journalize the following five transactions of Porshe Creations:
(a) On March 20th Porshe sells 25 cell phone covers to Xtreme at $4.50 per cover on invoice 887.
(b) On March 21st Porshe sells 5 cell phone covers to Sidekick for $7.50 per cover on invoice 908.
(c) On March 22nd Porshe sells 18 cell phone covers to Rock-On at $4.25 per cover on invoice 938.
(d) On March 26th Porshe sells 200 cell phone covers to Micro at $3.75 each on invoice 959.
(e) On March 29th Porshe sells 6 cell phone covers to Charmers for $8.35 each on invoice 997.
Pg 15
Revenue Journal

Pg 15
Revenue Journal
March 20 887 Xtreme 112.50
March 21 908 Sidekick 37.50
March 22 938 Rock-On 76.50
March 26 959 Micro 750.00
March 29 997 Charmers 50.10
131. Discuss the process of posting from a revenue journal to the subsidiary ledger and to the general ledger.
Each transaction is posted individually to customer accounts in the accounts receivable subsidiary ledger. This
should be done on a regular basis to keep customer balances current.
To provide a trail of the entries posted to the subsidiary and general ledgers, the source of the entries is indicated
in the Posting Reference column by inserting the letter R for Revenue Journal and the page number of the
revenue journal.
A check mark is inserted in the Posting Reference column to indicate that the transaction has been posted to the
subsidiary ledger.
At the end of the month, the sum of the total debits posted to the subsidiary ledger is posted to the general
ledger as a debit to Accounts Receivable and a credit to Fees Earned. This total is equal to the sum of the
month’s debits to the individual accounts in the subsidiary ledger.

132. The debits and credits from two transactions are presented in the following customer account:
NAME: Boogie Board Water Wear

ADDRESS: 2340 Xtreme Surf

July 1 Balance 805
July 6 Invoice 406 R42 645 1,450
July 24 Invoice 456 CR56 710 740

July 6 Sold $645 on account to Boogie Board Water Wear, itemized on Invoice 406. Amount posted from page R42 of the
revenue journal
July 24 Cash of $710 was collected from Boogie Board Water Wear, Invoice 456. Amount posted from page CR56 of the cash
receipts journal.

133. The following purchase transactions occurred during August for Backcountry Kayak Company.
Aug 1 Purchased kevlar kayaks for $5,600 on account from Gear Inc.
Aug 6 Purchased kevlar kayaks for $3,250 on account from Southland Company.
Aug 14 Purchased kayak paddles for $2,500 on account from Gear Inc.
Record these transactions in a purchase journal.
Purchases Journal
KayaksDr Dr

Purchases Journal
KayaksDr Dr
Aug 1 Gear Inc 5,600 5,600
6 Southland Co 3,250 3,250
14 Gear Inc 2,500 Paddles 2,500

134. The debits and credits from two transactions are presented in the following creditor’s account:
NAME Windsurf, Inc.

ADDRESS 343 Coastline Road

Aug 1 Balance 1,210
8 Invoice 333 CP38 1,210 0
15 Invoice 567 P11 735 735

Aug 8 Payment of $1,210 to Windsurf, Inc. on account (Invoice No. 333). Amount posted from page CP38 of the cash payments
journal.
Aug 15 Purchased $735 on account from Windsurf, Inc. itemized on Invoice No. 567. Amount posted from page P11 of the
purchases journal.

135. Define the meaning of B2C and B2B.
Both terms relate to e-commerce.
B2C - Business to Consumer business - businesses sell direct to consumers via the Internet.
B2B - Business to Business business - transactions are conducted between two businesses via the Internet.
136. The discovery and correction of errors is important in a computerized system. What kind of error(s) might
occur in these systems? What type of error(s) will be prevented in a computerized system?
Potential errors:
1. Failing to record transactions.

2. Recording a transaction more than once.
3. Recording a transaction in incorrect accounts.
4. Entering an incorrect number in both the debit and credit parts of the transaction.
With a computerized system, you cannot process a transaction unless debits equal credits. Additionally, you
cannot post to the wrong account, as posting occurs automatically.
137. Describe and discuss e-commerce.
E-commerce is the term for using the Internet to perform business transactions. B2C e-commerce involves
transactions between businesses and consumers. B2B e-commerce
involves transactions between two businesses.
Currently e-commerce sales are over $173 billion in retail sales, or over 4% of all retail sales. B2C allows
consumers to shop and receive goods at home and improves the speed and efficiency of transactions.
138. The Internet creates opportunities for improving the speed and efficiency of transactions. Name and
describe three key areas besides e-commerce where the Internet is being used for business purposes.
1. Supply chain management (SCM) - Internet applications to plan supply needs and coordinate suppliers.
2. Customer relationship management (CRM) - Internet applications to plan and coordinate marketing and sales
efforts.
3. Product life-cycle management (PLM) - Internet applications to plan and coordinate the product development
and design process.

2014 2013
U.S. $825.0 $600.00
Canada 325.5 345.5
Prepare a horizontal analysis of the segment data using 2013 as the base year.
Amount Increase or Percent Increase or

2014 2013 (Decrease) (Decrease)
U.S. $825.0 $600.00 $225.0 37.5%
Canada 325.5 345.5 (20.0) (5.8)
Other countries 215.5 168.5 47.0 27.9
Total Revenues $1,366.0 $1,114.0 252.0 22.6
2011 2010
U.S. $775.0 $650.00
Canada 325.5 245.5
Prepare a vertical analysis of the segment data.
2011 2010
(in millions) Percent (in millions) Percent
U.S. $ 775.0 58.9% $ 650.00 61.1%
Canada 325.5 24.7 245.5 23.1
Other countries 215.5 16.4 168.5 15.8
Total Revenues $1,316.0 100.0% $1,064.0 100.0%
141. Johnson Corporation provided revenue disclosures for 2009 by its major product segments in the notes to
its financial statements as follows:
Major Product Segments Fiscal Year 2009 (in millions)

Petroleum-based products $10,450
Industrial chemicals 9,460
Refined chemical products 8,575
Food additives 7,325
Emulsifiers 6,900
Pesticides 5,870
Salts 4,545
Wetting agents 3,215
Total Revenues $56,340
Prepare a vertical analysis.
Major Product Segments Fiscal Year 2009 (in millions) %

Petroleum-based products $10,450 18.5
Industrial chemicals 9,460 16.8
Refined chemical products 8,575 15.2
Food additives 7,325 13.0
Emulsifiers 6,900 12.2
Pesticides 5,870 10.4
Salts 4,545 8.1
Wetting agents 3,215 5.7
Total Revenues $56,340 100%*
* Difference in percentages due to rounding.

142. Explain whether each of the following would usually be used in a computerized accounting system and
why.
1. Special journals
2. Accounts receivable control accounts
3. Electronic invoice form
4. Month-end postings to the general ledger
Special journals and accounts receivable control accounts are generally not used in computerized systems.
Instead, electronic forms like electronic invoice forms are used to record original transactions. Since the
computer automatically posts transactions from electronic forms to the general ledger and individual accounts at
the time the transactions are recorded, month-end postings are not necessary in a computerized system.

143. For each of the following businesses, explain how a purchase journal might be modified for the specific
business.
1. North County Medical Center
2. Tri-County Farms, Inc.
3. Prescott’s Quick Lube and Tire Store
The purchases journal for North County Medical Center may include columns for pharmaceutical products (IV
solutions, injectable drugs), linens (sheets, blankets, pillows), and disposable medical equipment (needles,
syringes).
The purchases journal for Tri-County Farms may include columns for the various types of seeds (corn, wheat),
livestock (cows, hogs, sheep), fertilizer, and fuel.
The purchases journal for Prescott’s Quick Lube and Tire Store may include columns for oil products (motor
oil, grease), tires, and maintenance fluids (transmission fluid, antifreeze).
144. For each of the following business, explain how a revenue journal might be modified for the specific
business.
1. Jon’s Auto Repair Business
2. Esquire Movie Theater
3. Beach Hut Snack Bar, Restaurant, and Lounge
Jon’s Auto Repair Business might modify the revenue journal to include columns for each type of major repair
services. In addition, columns for warranty repairs, credit card charges, and sales taxes may be added.
The Esquire Movie Theater might modify the revenue journal to include admissions, concessions, and game
room revenues from video games in the lobby.
The Beach Hut Snack Bar, Restaurant, and Lounge might modify the revenue journal to include columns for
snack bar sales, restaurant sales, and liquor sales in the lounge. In addition, columns for credit card charges and
sales taxes may be added.
145. Explain what subsidiary ledgers are and give examples of three types of subsidiary ledgers that a business
might use.
A subsidiary ledgers groups a large number of accounts with a common characteristic together. Most
commonly, companies use Accounts Receivable and Accounts Payable subsidiary ledgers to detail individual
customer or vendor accounts. Businesses often use subsidiary ledgers to keep track of equipment purchased, its
location, and other equipment data.

146. Mobile Service Corp. has the following debits and credits from two transactions presented in the a
customer account:
NAME: Gen-X Products, Inc.

Address: 123 My Way

Mar.1 Balance Ö 1,150
Mar. 10 Invoice 987 R45 990 2,140
Mar. 19 Invoice 995 CR78 825 1,315
Mar. 10 Sold $990 on account to Gen-X Products Inc., itemized on Invoice No. 987. Amount posted from page 45 of the
revenue journal.

19 Collected cash of $825 from Gen-X Products Inc. (Invoice No. 995). Amount posted from page 78 of the cash
receipts journal.
147. Vision Service Company has the following debits and credits from two transactions presented in a
customer account:
NAME: Roswell Communications, Inc.

Address: 345 Alien Way

May 1 Balance Ö 750
May 14 Invoice 522 CR 230 625 125
May 25 Invoice 545 R115 3,500 3,625
May 14 Collected cash of $625 from Roswell Communications Inc. (Invoice No. 522). Amount posted from page 230 of the
cash receipts journal.

25 Sold $3,500 on account to Roswell Communications Inc., itemized on Invoice No. 545. Amount posted from page
115 of the revenue journal.
NAME: Xample, Inc.

Address: 567 Harrison Blvd.

Nov 1 Balance Ö 125
Nov 9 Invoice 564 CP 45 55 70
Nov 18 Invoice 574 P28 75 145
Nov. 9 Paid $55 to Xample Inc. on account (Invoice 564). Amount posted from page 45 of the cash payments journal.

18 Purchased $75 on account from Xample Inc., itemized on Invoice 574. Amount posted from page 28 of the
purchases journal.
NAME: Banner Computer Services, Inc.

Address: 890 Novice Lane

July 1 Balance Ö 5,645
July 19 Invoice 45 P16 1,755 7,400
July 26 Invoice 39 CP36 3,500 3,900
July 19 Purchased $1,755 on account from Banner Computer Services Inc., itemized on Invoice 45. Amount posted from
page 16 of the purchases journal.

26 Paid $3,500 to Banner Computer Services Inc. on account (Invoice 39). Amount posted from page 36 of the cash
payments journal.
150. The following cash receipts journal heading have been suggested for Tower Tree-Trimming Service
Date Account Credited Post. Fees Earned Accounts Receivable Cr. Cash Other Accounts Dr.
Ref. Cr. Cr.

The Cash column is for debits (not credits). The Other Accounts column is for credits (not debits). A better
order of columns would be to place the Other Accounts Cr. column to the left of the Fees Earned Cr. column.
151. Davidson, Inc. incurred the following transactions during the month of January. Record the appropriate
ones in the Cash receipts journal. If a transaction should not be recorded in the Cash receipts journal, indicate
where it should be posted.
(a) On January 3rd a one-year insurance policy was purchased for $2,400. The account number for Prepaid Insurance is 16.
(b) On January 5th Davidson received a payment on account from Pasher Industries of $625.
(c) On January 12th Davidson made sales on account of $3,500 and sales for cash of $2,300. The Fees Earned account
number is 41.
(d) On January 26th Davidson received $1,250 in rent revenue from a tenant who leases a portion of their building. The Rent
Revenue account number is 44.
(e) On January 29th Davidson received a payment on account from Gooden, Inc. for $2,000.

Date Ref. Dr.


Date Ref. Dr.
Pasher Industries
Jan.5 625 625
Jan. 12 Fees Earned 41 2,300 2,300
Jan. 26 Rent Revenue 44 1,250 1,250
Jan. 29 Gooden, Inc. 2,000 2,000

Transaction (a) should be recorded in the Cash payments journal and the sales on account in transaction (c) should be recorded in the Revenue
journal.

152. Anderson, Inc. incurred the following transactions during the month of February, 2010. Record the
appropriate ones in the Cash payments journal. If a transaction should not be recorded in the Cash payments
journal, indicate where it should be posted.
(a) On February 3rd the company purchased $650 worth of supplies on account. The Supplies account number is 15.
(b) On February 5th Anderson made a payment on account to Sanders Industries in the amount of $1,125 - check number
2004.
(c) On February 14th Anderson bought a one-year insurance policy for $1,500. The Prepaid Insurance account number is 14
- check number 2005
(d) On February 22nd Anderson paid monthly rent of $2,000. The Rent Expense account number is 63 - check number 2006.
(e) On February 26th Anderson purchased equipment making a down payment of $3,000 (check number 2007) and agreeing
to pay the $4,000 balance in 30 days. The Equipment account number is 18.



2/5/10 2004 Sanders Industries 1,125 1,125
2/14/10 2005 Prepaid Insurance 14 1,500 1,500
2/22/10 2006 Rent Expense 63 2,000 2,000
2/26/10 2007 Equipment 18 3,000 3,000

Transaction (a) should be recorded in the Purchases journal as should the $4,000 balance due on the equipment in transaction (e).

153. The following purchases journal headings have been suggested for Tower Tree-Trimming Service
Accounts Receivable Cr. Other Accounts Dr.

Account Credited Post. Accounts Payable Dr. Cash
Date Ref. Cr.

Accounts Receivable and Cash are not needed in the Purchase Journal, since this journal is for purchases on
account by Tower. Additionally, Accounts Payable should be a credit. There should also be a Supplies Dr.
column. Also, add two column to the extreme right with the heading "Post. Ref." and "Amount".
154. List the 4 most common special journals used in accounting and describe the transaction recorded in each
journal.
Purchases journal - for purchases made on account

Revenue journal - for sales made on account
Cash receipts journal - for all cash receipt transactions
Cash payment journal - for all cash payment transactions
155. Westsouth Publishing reports the following segment data regarding its textbook sales:
Segment 2014 2013

College textbooks $78,000 $55,000
High school textbooks 129,000 115,000
Elementary school textbooks 105,000 121,000
Total textbook revenue $312,000 $291,000
Perform a horizontal analysis and a vertical analysis for Westsouth Publishing Company. Round to one decimal place.
Horizontal Analysis:

Vertical Analysis:

156. Identify the three main advantages of a computerized accounting system over a manual accounting
system.
1. Simplification of the recording process by recording transactions electronically and posting to both the
general and subsidiary ledgers at the same time.
2. Generally more accurate than manual systems.
3. Provides management with current balance information to support decision making since account balances
are posted as transactions occur.
157. What is a business segment? How can business segments be analyzed?
A business segment is a subset of a business. Businesses may be segmented by region, product or service or
type of customer. Segment analysis uses horizontal and vertical comparisons to analyze the segments’
contributions to the overall performance of the company.
158. If a two-column (all-purpose) general journal, a revenue journal, and a cash receipts journal are used,
(a) Investment of additional cash in the business by the owner.

(b) Rendering of services for cash.
(c) Rendering of services on account.
(d) Receipt of cash on account from a customer.
(e) Sale of office supplies for cash, at cost, to a neighboring business.
(f) Adjustment to record supplies used at the end of the year.
(g) Closing of drawing account at the end of the year.
(a) cash receipts journal

(b) cash receipts journal
(c) revenue journal
(d) cash receipts journal
(e) cash receipts journal
(f) general journal
(g) general journal
159. If a two-column (all-purpose) general journal, a purchases journal, and a cash payments journal are used,
(a) Payment of rent.

(b) Purchase of supplies on account.
(c) Purchase of computer on account.
(d) Purchase of supplies for cash.
(e) Advance payment of a one-year fire insurance policy on the office.
(f) Adjustment to record accrued salaries at the end of the period.
(g) Adjustment to record depreciation at the end of the month.
(h) Payment of an account payable.
(a) cash payments journal

(b) purchases journal
(c) purchases journal
(d) cash payments journal
(e) cash payments journal
(f) general journal
(g) general journal
(h) cash payments journal
160. The posting references in the following purchases journal are indicated by letters. Identify each posting
reference [(a) through (i)] as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary
PURCHASES JOURNAL )
Accounts Office Store )
Account Post. Payable Supplies Supplies )
Credited Ref. Cr. Dr. Dr. )
Date
July )
3 Morton Company (a) 1,150 ..... 1,150 )
7 Jackson Co. (b) 4,800 4,800 ..... )
14 Fallon Inc. (c) 7,000 7,000 ..... )
26 Simpson Bros. (d) 2,350 ..... ..... )
31 15,300 11,800 1,150 )
(e) (f) (g) )
(
(
( Post.
(
( ...... ... ......
( ...... ... ......
( ...... ... ......
( ...... ... ......
( Equipment (h) 1,950
( 1,950
( (i)
(1) General ledger account: (e), (f), (g), (h)

(2) Subsidiary ledger account: (a), (b), (c), (d)
(3) No posting required: (i)
161. The posting references in the following revenue journal are indicated by letters. Identify each posting
reference [(a) through (h)] as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary
REVENUE JOURNAL
Post Acct. Rec. Dr.
Date Invoice No. Account Debited Ref. Fees Earned Cr.
April 3 190 Hill Company (a) 4,750
8 191 North Supply (b) 5,025
13 192 Macon Inc. (c) 2,100
17 193 White Products (d) 6,000
25 194 Easton Supply (e) 2,250
30 195 Karson Enterprises (f) 3,750
30 23,875
(g) (h)
(1) General ledger account: (g), (h)

(2) Subsidiary ledger account: (a), (b), (c), (d), (e), (f)
(3) No posting required: --

162. The following are selected transactions related to purchases on account and cash payments completed
during April of the current year.
Apr 1 Issued Check No. 60 in payment of rent for month, $2,400.

5 Purchased office supplies from Clauson Co., $850.
9 Issued Check No. 61 to Dame Co. for $9,750 for cash purchase of equipment.
10 Purchased store supplies from Ewing Co., $425.
15 Issued Check No. 62 to Clauson Co. in payment of April 5 invoice.
17 Purchased store supplies from Patton Co., $7,500.
20 Issued Check No. 63 to Ewing Co. in payment of April 10 invoice of $425.
25 Purchased equipment from Sloan Co., $7,750.
27 Issued Check No. 64 to Patton Co.for partial payment of the April 17 invoice, $4,000.
30 Purchased office supplies from Winthrop Co., $400.
(a) Record the transactions, using the accompanying journals.

(b) Total and rule the purchases and cash payments journals as of April
30.
(c) Indicate the method of posting the individual items and the totals of
the purchases and cash payments journals in the following manner:

Other Accounts

PURCHASES JOURNAL )
Accounts Store )

(
Office
( Post.
Suppli
es
Dr.


Other Accounts
Apr 1 60 Rent Expense G 2,400 ..... 2,400
9 61 Equipment G 9,750 ..... 9,750
15 62 Clauson Co. Ö ..... 850 850
20 63 Ewing Co. Ö ..... 425 425
27 64 Patton Co. Ö ..... 4,000 4,000
30 12,150 5,275 17,425
(Ö) (G) (G)
PURCHASES JOURNAL )
Accounts Store )
Apr 5 Clauson Co. Ö 850 ..... )
10 Ewing Co. Ö 425 425 )
17 Patton Co. Ö 7,500 7,500 )
25 Sloan Co. Ö 7,750 ..... )
30 Winthrop Co. Ö 400 ..... )
30 16,925 7,925 )
(G) (G) )

(
Office
( Post.
Supplies
Dr.
( 850 ...... ... .....
( ..... ...... ... .....
( ..... Equipment G 7,750
( 400 ...... ...... .....
( 1,250 7,750
( (G) (Ö )
163. Listed below are selected transactions completed by Ridge Company during March of the current year.
Mar 5 Rendered services on account to Quinton Co., Invoice No. 92, $3,250.
10 Rendered services on account to Martin Inc., Invoice No. 93, $4,500.
13 Received $5,000 in payment of monthly rent, which was due on March 1.
15 Received payment from Quinton Co. for invoice of March 5.
19 Received payment from Martin Inc. for balance due on invoice of March 10.
20 Received amount due from Thomas Co. on sale made in February, $5,200.
31 Recorded cash from services rendered for cash during the month, $15,750.
(a) Record the transactions, using the accompanying revenue journal

and cash receipts journal.
(b) Total and rule the revenue and cash receipts journals.
(c) Indicate the method of posting the individual items and the
columnar totals of the revenue and cash receipts journals in the
following manner:
REVENUE JOURNAL


Other Accts.

REVENUE JOURNAL
Mar 5 92 Quinton Co. Ö 3,250
10 93 Martin Inc. Ö 4,500
31 7,750
(G)(G)

Other Accts.
Mar
13 Rent Revenue G 5,000 ..... 5,000
15 Quinton Co. Ö ..... 3,250 3,250
19 Martin Inc. Ö ..... 4,500 4,500
20 Thomas Co. Ö ..... 5,200 5,200
31 Services Revenue G 15,750 ..... 15,750
31 20,750 12,950 33,700
(Ö) (G) (G)

164. Down-Under, an aquatic supply store, makes the following five payments during August. Journalize them
in the Cash Payments Journal as appropriate.
(a) On August 2nd, Down-Under paid Pondmaster, Inc with check 6420 for 6 pumps at $435.00 each. The pumps had been purchased
in July on account.
(b) On August 10th, Down-Under purchased $785.00 of office supplies from Business Systems with check 6421.
(c) On August 15th, Down-Under pays Aqua Magic $215.00 on account with check 6422.
(d) On August 27th, Down-Under pays an invoice for merchandise received earlier from Spindrifter, Inc. for eight drains at $73.50
each. They wrote check 6423.
(e) On August 31st, Down-Under purchased $65.00 of Koi clay from The Natural Wonder Company by writing check 6424. (Utilize
Pond Supplies Expense).
Cash Pg 17
Payments Journal
Dr:

Cash Pg 17
Payments Journal
Dr:
Aug 2 6420 Pondmaster, Inc 2,610.00 2,610.00
Aug 10 6421 Office Supplies 785.00 785.00
Aug 15 6422 Aqua Magic 215.00 215.00
Aug 27 6423 Spindrifter, Inc. 588.00 588.00
Aug 31 6424 Pond Supplies Expense 65.00 65.00

165. Voyager Electronic Services has three customers in its Accounts Receivable Subsidiary Ledger with the
following detail:
Fred Yao Ming – Beginning balance $1,150.00
Kohl Townson – Beginning balance $850.00
Chandra Jahi – Beginning balance $1,075.00
Accounts Receivable controlling Account balance $3,075.00
Journalize then post the following five transactions to the General Journal. Then post the journal entries to the
Accounts Receivable Subsidiary Ledger. Update the balance of the Accounts Receivable controlling Account
balance.
On June 3
, Kohl
rd GJ Page 41
Townson
pays
$325.00
on
account.
On June
10th,
Chandra
Jahi
purchases
$475.00
on
account.
On June
15th, Fred
Yao Ming
pays
$395.00
on
account.
On June
16th, Fred
Yao Ming
purchases
$685.00
on
account.
On June
23rd, Kohl
Townson
purchases
$155.00
on
account.

General
Journal
Ref:

controlling Account
BB 3,075.00

Accounts
Receivabl
e - Fred
Yao Ming
BB 1,150.00

Accounts
Receivabl
e - Kohl
Townson
BB 850.00

Accounts
Receivabl
e-
Chandra
Jahi
BB 1,075.00

General GJ Page 41

Journal
Ref:
June 3 Cash 325.00
A/R - Kohl Townson 325.00

June 10 A/R - Chandra Jahi 475.00
Sales 475.00

June 15 Cash 395.00
A/R - Fred Yao Ming 395.00

June 16 A/R - Fred Yao Ming 685.00
Sales 685.00

June 23 A/R - Kohl Townson 155.00
Sales 155.00
Accounts Receivable - controlling

Account
Date: Item: Post Ref: Debit: C Balance:
re
di
t:
BB 3,075.00
June 1,315.00 72 3,670.00
0.
00

Fred Yao Ming
re
di
t:
BB 1,150.00
June 15 39 755.00
5.
00
June 16 685.00 1,440.00

Kohl Townson
re
di
t:
BB 850.00
June 3 32 525.00
5.
00
June 23 155.00 680.00

Chandra Jahi
re
di
t:
BB 1,075.00
June 10 475.00 1,550.00

166. Sunrise Coffee Shop, in an effort to stream line their accounting system, has decided to utilize a Cash
Receipts Journal in its operation. Record the following transactions to the Cash Receipts Journal for the first
two weeks in March, add the columns, and include the Post Reference information from the accounts given.
Are there any additional columns you would add to this journal?

Date Account Post Ref Cash Bev Food Other
Credited Dr Revenue Revenue Cr
Cr Cr


Mar 10 Cash received on Account from Central.com $900
General ledger Acct: Customer Acct

Cash 10 Central.com 245
Retail Supplies 15
Beverage Revenue 41
Food Revenue 42
Retail Revenue 43

Bev Fo
Accou Post Ref Cash Revenue od Other
Date nt Dr Cr Re Cr
Credite ve
d nu
e
Cr
3/1 Cash Ö 375 375
Sales
3/1 Cash Ö 250 25
Sales 0
3/1 Retail 43 130 130
Sales
3/7 Cash Ö 480 480
Sales
3/7 Cash Ö 325 32
Sales 5
3/7 Retail 43 115 115
Sales
3/10 Central 12/245 900 900
.Com
2,57 855 57 1,145
5 5
(10) (41) (4 Ö
2)
Yes - Retail Revenue

167. Read each transaction and identify the appropriate journal that it should be recorded in;
1. Owner withdrew supplies

2. Sale made on account
3. Payment to vendor on account
4. Payment received from customer on account
5. Purchases on account
6. Adjusting journal entry for supplies used
7. Owner withdrew cash
8. Company borrows money from bank
9. Record monthly depreciation
10. Close revenue accounts at month end
1. general journal
2. sales journal
3. cash disbursements journal
4. cash receipts journal
5. purchases journal
6. general journal
7. cash disbursements journal
8. cash receipts journal
9. general journal
10. general journal

Chapter 5 - Accounting Syste

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 5 - Accounting Syste

Uploaded by

Copyright:

Available Formats

Chapter 5--Accounting Systems

11. Specialized journals are books of original entry.

20. Purchases of store equipment on account are recorded in the general journal.

23. A personal withdrawal of cash is recorded in the general journal.

24. Services provided for cash is recorded in the revenue journal.

25. Services provided on account is recorded in the revenue journal.

29. Purchase journals will have an Other Accounts Cr. column.

34. Adjusting journal entries are recorded in a special journal.

35. Closing journal entries are recorded in the general journal.

36. The accounts receivable subsidiary ledger is an example of a special journal.

45. In computerized accounting systems, reports may be generated at any time.

46. Computerized accounting systems prevent all journalizing errors.

48. The term B2C refers to transactions conducted between two companies.

49. E-commerce provides business opportunities at a higher cost.

1. monthly adjustment for supplies used General journal ____

1. Equipment purchased on account Revenue journal ____

1. Accounts receivable subsidiary ledger;

58. The three phases of setting up an accounting system are, in order

60. Which of the following is not an element of internal controls?

69. A purchase of supplies for cash is recorded in the

70. A purchase of supplies on account is recorded in the

73. In which journal would an adjustment for an overcharge by a creditor be recorded?

74. Which of the following transactions is recorded in the revenue journal?

75. Each individual entry in the Revenue Journal is posted to

76. Which of the following is always recorded in the general journal?

78. Which of the following is recorded in the cash receipts journal?

79. Services performed for cash should be recorded in the

80. Which of the following is recorded in the cash payments journal?

81. A Cash Payments journal would not include a

82. In which journal is the return of supplies purchased on account recorded?

87. Some of the more common subsidiary ledgers are:

89. Which of the following is not considered a special journal?

90. Which of the following journals is called an all-purpose journal?

91. Which of the following is true about the revenue journal?

92. The cash receipts journal will be used for

94. A cash investment made by the owner should be recorded on the

95. A withdrawal of cash made by the owner will be found in the

97. In which journal would adjusting entries be found?

98. In which journal would you find cash revenues recorded?

101. Which of the following is NOT a special journal?

102. Which of the following accounts normally has a subsidiary ledger?

103. Which transaction is normally recorded in a special journal?

105. The total on the "Cash Receipts" report at January 31 should equal

107. If a company uses special journals

108. Computerized accounting systems

Cash Receipts Journal

General Ledger Acct: Customer Acct

116. Computerized accounting systems

117. Which of the following statements is false?

118. What is meant by the term B2C?

120. When using a purchases journal

121. Which of the following could not be considered a business segment?

123. When using a revenue journal:

Segment 2014 2013

Segment 2014 2013

126. The following is an example of:

Segment 2014 2013 Amount Percent

127. The following is an example of:

Segment 2014 Percent 2013 Percent

128. Briefly describe the three-step process of accounting system development.

129. Define and describe an accounting system.

NAME: Boogie Board Water Wear