Question 1

Which of the following will be recorded in the Other Accounts CR column of the cash receipts journal?
A) cash sales
B) receipt of interest revenue
C) receipt of accounts receivable
D) sales discounts

Accepted Answer

The Other Accounts CR column of the cash receipts journal is used to record cash receipts that do not involve the sale of goods or services, such as interest revenue, loans receivable, or proceeds from the sale of non-current assets. Receipts of accounts receivable would be recorded in the Accounts Receivable CR column, and cash sales and sales discounts would be recorded in the Sales CR column.

Question 2

Every transaction recorded in the cash receipt journal includes a:
A) credit to cash.
B) debit to accounts receivable.
C) credit to accounts receivable.
D) debit to cash.

Accepted Answer

Cash receipts are typically recorded as a debit to cash because cash is increasing as a result of the transaction. Therefore, the correct answer is option D - debit to cash.

Question 3

Tangent Corporation makes a $1,200 purchase of merchandise inventory on account. This transaction will be recorded in the:
A) cash payments journal.
B) sales journal.
C) cash receipts journal.
D) purchases journal.

Accepted Answer

The purchase of merchandise inventory on account will be recorded in the purchases journal, as it involves acquiring inventory on credit.

Question 4

Which of the following is true of a cash receipts journal?
A) In a cash receipts journal, cash sales are recorded in the Accounts Receivable CR column and the Cash DR column.
B) In a cash receipts journal, collections on account are recorded in the Accounts Receivable DR column and the Cash DR column.
C) It ignores the miscellaneous cash receipt transactions.
D) In a cash receipts journal, the sales for cash will have entries in the Sales Revenue CR column.

Accepted Answer

The answer of Which of the following is true of...

Question 5

When a sales journal is posted to the general ledger at the end of the month, the accountant totals the Accounts Receivable DR, Sales Revenue CR and Cost of Goods Sold DR, Merchandise Inventory CR columns. This process is commonly called:
A) scalping.
B) ticking.
C) footing.
D) framing.

Accepted Answer

The process of totaling the columns and verifying that the figures agree with the general ledger is called footing. Scalping refers to taking advantage of a customer by charging excessive fees or commissions, ticking is the act of placing a mark on each entry to indicate that it has been reviewed, and framing is not a term commonly used in accounting.

Question 6

Cash purchases are recorded in the purchases journal.

Accepted Answer

Cash purchases are recorded in the cash disbursements journal, not the purchases journal.

Question 7

Which of the following is true of a sales journal prepared under the perpetual inventory system?
A) It includes a Cost of Goods Sold DR, Merchandise Inventory CR column.
B) It records both cash and credit sales transactions.
C) All transactions recorded in a sales journal are also entered in the general journal.
D) It cannot be used with a perpetual inventory system.

Accepted Answer

The answer of Which of the following is true of...

Question 8

Deal Corporation sells a product for $500 on account to Liza. This transaction will be recorded in the:
A) cash payments journal.
B) sales journal.
C) cash receipts journal.
D) purchase journal.

Accepted Answer

The sales journal is used to record sales of goods or services made on account (credit sales). Therefore, the transaction of selling a product for $500 on account to Liza would be recorded in the sales journal.

Question 9

A CR.5 posting reference in a subsidiary ledger indicates that:
A) the posting is transferred from the cash receipts journal, page 5.
B) the transaction in page number 5 is credited.
C) the credited amount is after a 5% discount.
D) the sales on credit is expected to be paid within 5 days.

Accepted Answer

The answer of A CR.5 posting reference in a subsidiary...

Question 10

Multi Corporation sold merchandise for $4,450 to Susan on credit. The cost of goods sold was $1,185. Assuming that the firm is following a perpetual inventory system, it will record $4,450 in the:
A) general journal.
B) Accounts Receivable DR, Sales Revenue CR column of the sales journal.
C) Merchandise Inventory DR column of the purchases journal.
D) Accounts Receivable CR column of cash receipts journal.

Accepted Answer

The sale on credit to Susan should be recorded in the Accounts Receivable DR, Sales Revenue CR column of the sales journal since the firm is following a perpetual inventory system. The cost of goods sold will be recorded separately in the Merchandise Inventory DR column of the purchases journal. Therefore, option B is the correct answer. The other options are incorrect as they do not correspond to the correct journal entry for recording the sale.

Question 11

Depreciation of fixed assets is recorded in a:
A) cash payments journal.
B) sales journal.
C) cash receipts journal.
D) general journal.

Accepted Answer

Depreciation of fixed assets is a non-cash transaction that is recorded in the general journal. It is a way to allocate the cost of a fixed asset over its useful life, and it reduces the asset's book value on the balance sheet.

Question 12

Tangent Corporation sold a product for $7,150 to Michael on credit. The cost of goods sold is $5,650.Assuming that the firm is following a perpetual inventory system and using a sales journal, it will record $5,650 in the:
A) Accounts Receivable DR, Sales Revenue CR column.
B) Cost of Goods Sold DR, Merchandise Inventory CR column.
C) Merchandise Inventory DR, Cost of Goods Sold CR column.
D) Sales Revenue DR, Accounts Receivable CR column.

Accepted Answer

The cost of goods sold will be recorded in the Cost of Goods Sold DR, Merchandise Inventory CR column because it represents the cost of the product sold and reduces the value of the inventory. The sale will be recorded in the Accounts Receivable DR, Sales Revenue CR column as it represents the revenue earned from the sale on credit.

Question 13

In a perpetual inventory system, when cash sales are recorded:
A) merchandise inventory decreases and cost of goods sold decreases.
B) sales revenue increases and cash decreases.
C) sales revenue increases and equity decreases.
D) merchandise inventory decreases and equity decreases.

Accepted Answer

The answer of In a perpetual inventory system, when cash...

Question 14

Deal Corporation sells a product for $500 cash to Liza. This transaction will be recorded in the:
A) cash payments journal.
B) sales journal.
C) cash receipts journal.
D) purchase journal.

Accepted Answer

The transaction involves the receipt of cash from a customer, so it should be recorded in the cash receipts journal. The sales journal is used for credit sales, while the cash payments journal and purchase journal are used for recording payments made to suppliers.

Question 15

Hexa Corporation sold a product on credit for $2,235 to Merin. The cost of goods sold was $1,324. Assuming that the firm is following a perpetual inventory system and using a sales journal, it will record $2,235 in the:
A) Accounts Receivable CR, Sales Revenue DR column.
B) Cost of Goods Sold DR, Merchandise Inventory CR column.
C) Merchandise Inventory DR, Cost of Goods Sold CR column.
D) Accounts Receivable DR, Sales Revenue CR column.

Accepted Answer

When a product is sold on credit, it increases the firm's account receivable and the sales revenue. In this case, the firm will record the transaction in the accounts receivable DR, sales revenue CR column of the sales journal. The cost of goods sold will be recorded separately in the cost of goods sold DR, merchandise inventory CR column. Therefore, option D is the correct choice.

Question 16

Tangent Corporation makes a $1,200 purchase of merchandise inventory for cash. This transaction will be recorded in the:
A) cash payments journal.
B) general journal.
C) cash receipts journal.
D) purchase journal.

Accepted Answer

The answer of Tangent Corporation makes a $1,200 purchase of...

Question 17

The purchases journal is a special journal used to record all purchases of merchandise inventory, office supplies, and other assets on account.

Accepted Answer

The statement is correct. The purchases journal is a type of special journal used for recording purchases of inventory and other assets made on account.

Question 18

Which of the following is true of posting from a sales journal to the general ledger?
A) Entries in the sales journal are posted to either the accounts receivable subsidiary ledger or the general ledger.
B) Individual accounts receivable are posted daily from the sales journal to the accounts receivable subsidiary ledger.
C) Though the sales journal is posted monthly to the subsidiary ledger, it is a reliable record of the amount receivable from each customer.
D) Under a perpetual inventory system, the sales journal will not have the Cost of Goods Sold DR and Merchandise Inventory CR column.

Accepted Answer

Posting from a sales journal to the general ledger involves posting individual accounts receivable from the sales journal to the accounts receivable subsidiary ledger on a daily basis. This allows for accurate tracking of amounts owed by each customer. Option A is incorrect because entries in the sales journal are not necessarily posted to the general ledger, they may only be posted to the subsidiary ledger. Option C is incorrect because the sales journal is not a reliable record of amounts receivable from each customer if it is only posted monthly to the subsidiary ledger. Option D is irrelevant to posting from a sales journal to the general ledger.

Question 19

If a business uses the periodic inventory system, the sales journal:
A) will record both the cash and credit sales.
B) will include a Purchase DR and Account Receivable CR column.
C) will exclude the Accounts Receivable DR and Sales Revenue CR column.
D) will not include the Cost of Goods Sold DR and Merchandise Inventory CR column.

Accepted Answer

The answer of If a business uses the periodic inventory...

Question 20

Which of the following is not included in a typical cash receipts journal of a business using the perpetual inventory system?
A) Interest Revenue CR column
B) Cost of Goods Sold DR, Merchandise Inventory CR column
C) Sales Revenue CR column
D) Other Accounts CR column

Accepted Answer

The cash receipts journal typically includes columns for Sales Revenue CR, Cost of Goods Sold DR, Merchandise Inventory CR, and Other Accounts CR. However, it does not include a column for Interest Revenue, as this is not a typical cash receipt of a business.

Quiz 7: Accounting Information Systems

Which of the following will be recorded in the Other Accounts CR column of the cash receipts journal?

Every transaction recorded in the cash receipt journal includes a:

Tangent Corporation makes a $1,200 purchase of merchandise inventory on account. This transaction will be recorded in the:

Which of the following is true of a cash receipts journal?

When a sales journal is posted to the general ledger at the end of the month, the accountant totals the Accounts Receivable DR, Sales Revenue CR and Cost of Goods Sold DR, Merchandise Inventory CR columns. This process is commonly called:

Cash purchases are recorded in the purchases journal.

Which of the following is true of a sales journal prepared under the perpetual inventory system?

Deal Corporation sells a product for $500 on account to Liza. This transaction will be recorded in the:

A CR.5 posting reference in a subsidiary ledger indicates that:

Multi Corporation sold merchandise for $4,450 to Susan on credit. The cost of goods sold was $1,185. Assuming that the firm is following a perpetual inventory system, it will record $4,450 in the:

Depreciation of fixed assets is recorded in a:

Tangent Corporation sold a product for $7,150 to Michael on credit. The cost of goods sold is $5,650.Assuming that the firm is following a perpetual inventory system and using a sales journal, it will record $5,650 in the:

In a perpetual inventory system, when cash sales are recorded:

Deal Corporation sells a product for $500 cash to Liza. This transaction will be recorded in the:

Hexa Corporation sold a product on credit for $2,235 to Merin. The cost of goods sold was $1,324. Assuming that the firm is following a perpetual inventory system and using a sales journal, it will record $2,235 in the:

Tangent Corporation makes a $1,200 purchase of merchandise inventory for cash. This transaction will be recorded in the:

The purchases journal is a special journal used to record all purchases of merchandise inventory, office supplies, and other assets on account.

Which of the following is true of posting from a sales journal to the general ledger?

If a business uses the periodic inventory system, the sales journal:

Which of the following is not included in a typical cash receipts journal of a business using the perpetual inventory system?