Question 1

Credit sales of assets other than merchandise inventory occur infrequently and are recorded in the ________.
A) sales journal
B) cash receipts journal
C) accounts receivable journal
D) general journal

Accepted Answer

Credit sales of assets other than merchandise inventory are not common and therefore are not recorded in the sales journal or cash receipts journal. They also do not relate directly to accounts receivable. Therefore, they are recorded in the general journal.

Question 2

Depreciation expense is recorded in a ________.
A) cash payments journal
B) sales journal
C) cash receipts journal
D) general journal

Accepted Answer

Depreciation expense is a non-cash expense and is recorded in the general journal to adjust the carrying value of long-term assets on the balance sheet. It is not recorded in cash payments, sales or cash receipts journals.

Question 3

List the four special journals that are often used in a manual accounting information system. State what types of transactions are recorded in each of these special journals.

Accepted Answer

The answer of List the four special journals that are...

Question 4

A subsidiary ledger is ________.
A) an accounting journal designed to record a specific type of transaction
B) a created list of accounts used by a business entity to define each class of items for which cash is spent or received
C) a complete record of business transactions recorded in a ledger over the life of a company
D) a record of accounts that provide supporting details on individual balances, the total of which appears in a general ledger account

Accepted Answer

A subsidiary ledger is a record of accounts that provides supporting details on individual balances, which then appear in a summarized form in a general ledger account. It is used to keep track of detailed transactions related to specific accounts or groups of accounts.

Question 5

The accounts payable subsidiary ledger ________.
A) does not indicate the amount owed to each vendor
B) shows only a single total for the amount owed on account
C) lists vendors in alphabetical order, along with amounts paid to the vendors and the remaining amounts owed to them
D) has a format that is entirely different from an accounts receivable subsidiary ledger

Accepted Answer

The accounts payable subsidiary ledger lists vendors in alphabetical order, along with amounts paid to the vendors and the remaining amounts owed to them. This allows for easy tracking of amounts owed to each vendor. Option A is incorrect as the purpose of the subsidiary ledger is to indicate the amount owed to each vendor. Option B is incorrect as the ledger should have separate entries for each transaction with the vendor. Option D is incorrect as the format of the accounts payable subsidiary ledger is similar to the format of the accounts receivable subsidiary ledger.

Question 6

The accounts payable subsidiary ledger lists each vendor along with amounts paid to the vendors and the remaining amounts owed to them.

Accepted Answer

That is correct, the accounts payable subsidiary ledger is used to keep track of amounts owed to vendors, including amounts that have already been paid and those that are still outstanding.

Question 7

State the purpose of a subsidiary ledger? What is included in the accounts receivable subsidiary ledger?

Accepted Answer

The answer of State the purpose of a subsidiary ledger?...

Question 8

The Accounts Receivable balance in the general ledger may or may not equal the sum of the accounts in the accounts receivable subsidiary ledger.

Accepted Answer

The Accounts Receivable balance in the general ledger must always equal the sum of the accounts in the accounts receivable subsidiary ledger.

Question 9

The sales journal is used for all sales of merchandise inventory.

Accepted Answer

The sales journal is used for all sales of merchandise inventory on account.

Question 10

A control account ________.
A) does not appear on the balance sheet
B) has a balance that equals the sum of the balances in a group of related accounts in a subsidiary ledger
C) is equivalent to a contra account and represents the offsetting nature of debits and credits on a firm's financial statements
D) holds individual accounts that support a general ledger account

Accepted Answer

A control account is a general ledger account that summarizes the balances of a group of related accounts in a subsidiary ledger. The balance of the control account equals the sum of the balances in the subsidiary ledger, allowing for easier tracking of the overall balance.

Question 11

Which of the following is true of an accounts receivable subsidiary ledger?
A) It does not include a receivable account for each customer, but includes a cumulative account for all customers.
B) It contains information about the amount each customer purchased on credit, but excludes the customer name.
C) The total of the accounts in the accounts receivable subsidiary ledger must equal the accounts receivable balance in the general ledger.
D) Companies keep an accounts payable subsidiary ledger that is entirely different from the accounts receivable subsidiary ledger.

Accepted Answer

An accounts receivable subsidiary ledger includes a separate receivable account for each customer and tracks individual customer balances. The total of these accounts should match the accounts receivable balance in the general ledger as a control. B is incorrect as the customer name is included in the accounts receivable subsidiary ledger. D is incorrect as companies typically have both accounts receivable and accounts payable subsidiary ledgers. A is incorrect as it contradicts the definition of an accounts receivable subsidiary ledger.

Question 12

Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger.

Accepted Answer

Entries in the sales journal typically record sales made on credit, which increase the accounts receivable balance. Therefore, they need to be posted to both the accounts receivable subsidiary ledger (which contains detailed information about individual customer accounts) and the general ledger (which contains summary information about all accounts).

Question 13

A subsidiary ledger is a record of accounts that provides supporting details on individual balances, the total of which appears in a general ledger account.

Accepted Answer

This is the correct definition of a subsidiary ledger.

Question 14

After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in the general ledger should equal the sum of the individual customer balances in the accounts receivable subsidiary ledger.

Accepted Answer

This statement is true. The general ledger should always balance with the subsidiary ledgers, including the accounts receivable subsidiary ledger.

Question 15

Blue Company has four customers: A, B, C, and D. The accounts receivable balance in the general ledger is $9,383 and the accounts receivable subsidiary ledger of customers A, C, and D have $1,546, $2,696, and $3,440, respectively. Calculate the amount in the accounts receivable subsidiary ledger account of customer B.
A) $7,682
B) $3,247
C) $2,391
D) $1,701

Accepted Answer

The total balance in the subsidiary ledgers of customers A, C, and D is $1,546 + $2,696 + $3,440 = $7,682. Therefore, the amount in the accounts receivable subsidiary ledger account of customer B is $9,383 - $7,682 = $1,701. The correct answer is D.

Question 16

A sales journal is ________.
A) a special journal used to record all the cash sales
B) used to record the sales of assets other than merchandise inventory
C) a special journal used to record credit sales
D) a general journal used to record the adjustments in revenue account

Accepted Answer

A sales journal is a special journal used to record credit sales. Option A is incorrect because a cash receipts journal is used to record cash sales. Option B is incorrect because the sales of assets other than merchandise inventory are recorded in a separate journal called the sales of fixed assets journal. Option D is incorrect because a general journal is used to record adjusting entries, not sales.

Question 17

Sales on account are recorded in a cash receipts journal.

Accepted Answer

Sales on account are recorded in a sales journal or a sales daybook, not in a cash receipts journal. The cash receipts journal is used to record all cash receipts, including collections from sales made on account.

Question 18

A company has four vendors and the accounts payable subsidiary ledger shows the following balances.  Calculate the accounts payable balance in the general ledger.
A) $422,295
B) $542,425
C) $275,821
D) $266,604

Accepted Answer

The answer of A company has four vendors and the...

Question 19

Adjusting entries are recorded in the ________.
A) cash payments journal
B) purchases journal
C) cash receipts journal
D) general journal

Accepted Answer

Adjusting entries are not part of the regular transactions recorded in the cash payments, purchases, or cash receipts journals. Instead, they are recorded in the general journal. The general journal is used to make adjusting entries and other non-routine transactions such as depreciation, accruals, and deferrals.

Question 20

A special journal is ________.
A) an accounting journal designed to record a specific type of transaction
B) an accounting journal that holds individual accounts that support a specific general ledger account
C) a record of accounts that provides supporting details on individual balances, the total of which appears in a general ledger account
D) a created list of the accounts used by a business entity to define each class of items for which cash is spent or received

Accepted Answer

A special journal is designed to record a specific type of transaction, such as sales, purchases, or cash receipts. It is not specifically related to individual accounts or general ledger balances.

Quiz 7: Accounting Information Systems

Credit sales of assets other than merchandise inventory occur infrequently and are recorded in the ________.

Depreciation expense is recorded in a ________.

List the four special journals that are often used in a manual accounting information system. State what types of transactions are recorded in each of these special journals.

A subsidiary ledger is ________.

The accounts payable subsidiary ledger ________.

The accounts payable subsidiary ledger lists each vendor along with amounts paid to the vendors and the remaining amounts owed to them.

State the purpose of a subsidiary ledger? What is included in the accounts receivable subsidiary ledger?

The Accounts Receivable balance in the general ledger may or may not equal the sum of the accounts in the accounts receivable subsidiary ledger.

The sales journal is used for all sales of merchandise inventory.

A control account ________.

Which of the following is true of an accounts receivable subsidiary ledger?

Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger.

A subsidiary ledger is a record of accounts that provides supporting details on individual balances, the total of which appears in a general ledger account.

After posting entries in a sales journal to the general ledger, the Accounts Receivable balance in the general ledger should equal the sum of the individual customer balances in the accounts receivable subsidiary ledger.

A sales journal is ________.

Sales on account are recorded in a cash receipts journal.

A company has four vendors and the accounts payable subsidiary ledger shows the following balances. Calculate the accounts payable balance in the general ledger.

Adjusting entries are recorded in the ________.

A special journal is ________.