Question 1

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 provide supporting details on individual balances, and the total of which appears in a general ledger account. It is used to keep track of transactions involving a specific type of asset, liability or equity, and it provides more detailed information about the general ledger account.

Question 2

The sale of merchandise inventory for cash is recorded in the ________.
A)general journal
B)cash receipts journal
C)sales journal
D)accounts receivable journal

Accepted Answer

The sale of merchandise inventory for cash is recorded in the cash receipts journal, as it is a cash transaction. The general journal is used for adjusting and correcting entries, as well as any other transactions not recorded in specialized journals. The sales journal is used to record credit sales, and the accounts receivable journal is used to record credit sales on account.

Question 3

Which of the following is true of a sales journal?
A)It is a special journal used to record all the cash sales.
B)It is used to record the sales of capital assets such as buildings.
C)It is a special journal used to record credit sales.
D)It is a general journal that is used to record the adjustments in revenue account.

Accepted Answer

A sales journal is a special journal used to record credit sales. It is used to keep track of sales made to customers on credit, which makes it easier to manage accounts receivable and track outstanding balances. A separate cash receipts journal is used to record cash sales. Option A is incorrect because it refers to a cash receipts journal, not a sales journal. Option B is incorrect because capital asset sales would be recorded in a separate journal or ledger. Option D is incorrect as adjustments to revenue accounts would be recorded in a general journal.

Question 4

The credit sales of assets that occur infrequently,such as buildings,are recorded in the ________.
A)sales journal
B)cash receipts journal
C)accounts receivable journal
D)general journal

Accepted Answer

Sales of assets that occur infrequently are not recorded in the sales journal or accounts receivable journal as they are not part of regular business operations. Cash receipts journal is used to record cash transactions only. Therefore, the best option for recording credit sales of assets that occur infrequently would be the general journal.

Question 5

Generally,all transactions are recorded in a special journal as well as the general journal.

Accepted Answer

The answer of Generally,all transactions are recorded in a special...

Question 6

Cash receipts journal is a special journal used to record business transactions of all cash receipts and credit sales.

Accepted Answer

The answer of Cash receipts journal is a special journal...

Question 7

Centium Corporation sold goods to John Dunn for $1,000 on credit.Cost of goods sold was $745.Assuming that the firm is following a perpetual inventory system and using a sales journal,it will record $745 in the ________.
A)Accounts Receivable DR,Sales Revenue CR column
B)Cost of Goods Sold CR,Merchandise Inventory DR column
C)Cost of Goods Sold DR,Merchandise Inventory CR column
D)Sales Revenue DR,Accounts Receivable CR column

Accepted Answer

In a perpetual inventory system, the cost of goods sold is recorded at the time of the sale. Therefore, the company will record $745 in the Cost of Goods Sold DR, Merchandise Inventory CR column. There is no need to record the sales revenue or accounts receivable in the sales journal as they will be recorded separately in the accounts receivable subsidiary ledger and the general ledger.

Question 8

Which of the following serves as the "journal of last resort?"
A)purchases journal
B)sales journal
C)general journal
D)cash payments journal

Accepted Answer

The general journal is known as the "journal of last resort" because it is used to record transactions that cannot be recorded in any of the specialized journals like the purchases journal, sales journal, or cash payments journal. It is a catch-all journal and is used to record non-routine transactions or adjusting entries.

Question 9

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

Accepted Answer

The sales journal records all credit sales made by the company, and these entries are posted to the accounts receivable subsidiary ledger to keep track of individual customer balances. The sales journal entries are also summarized and posted to the general ledger to update the accounts and financial statements of the company. Therefore, entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger.

Question 10

A company has four vendors and the accounts payable subsidiary ledger shows the following balances. $$\begin{array} { | l | r | } 
\hline \text { Alpha } & \$ 275,821 \
\hline \text { Beta } & 143,474 \
\hline \text { Gamma } & 78,943 \
\hline \text { Delta } & 34,187 \
\hline
\end{array}$$ Calculate the accounts payable balance in the general ledger.
A)$419,295
B)$532,425
C)$275,821
D)$256,604

Accepted Answer

The accounts payable balance in the general ledger is the sum of all balances in the subsidiary ledger: $275,821 + $143,474 + $78,943 + $34,187 = $532,425.

Question 11

Assume that a company has only four customers: A,B,C,and D.The accounts receivable balance in the general ledger is $7,983 and the accounts receivable subsidiary ledger of customers A,C,and D have $1,246,$2,596,and $3,240,respectively.Calculate the amount in the accounts receivable subsidiary ledger account of customer B.
A)$7,082
B)$2,147
C)$1,391
D)$901

Accepted Answer

The accounts receivable balance in the general ledger is the sum of all customers' balances. Therefore, the accounts receivable subsidiary ledger account of customer B can be calculated as follows:
Total accounts receivable balance = $7,983
Total accounts receivable balances of customers A, C, and D = $1,246 + $2,596 + $3,240 = $7,082
Therefore, the accounts receivable subsidiary ledger account of customer B = Total accounts receivable balance - Total accounts receivable balances of customers A, C, and D = $7,983 - $7,082 = $901

Question 12

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 accounts receivable balance in the general ledger should equal the sum of the individual customer balances in the accounts receivable subsidiary ledger, as each entry in the sales journal should have been recorded in both the subsidiary ledger and the general ledger. This ensures accuracy in tracking and managing accounts receivable.

Question 13

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

The purpose of an accounts receivable subsidiary ledger is to have a separate account for each customer who owes money to the company. The total of all the accounts in the subsidiary ledger should equal the balance of the accounts receivable account in the general ledger. Therefore, option C is the correct answer. Option A is incorrect because a cumulative account for all customers would not provide sufficient detail. Option B is incorrect because the subsidiary ledger should include the customer name. Option D is incorrect because the question is asking specifically about the accounts receivable subsidiary ledger.

Question 14

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

Accepted Answer

An accounts payable subsidiary ledger lists vendors in alphabetical order, along with amounts paid to them and the remaining amounts owed to them. This provides a detailed record of the company's outstanding balances with each vendor. Option A and B are incorrect as they are opposite to the true statement. Option D is incorrect because the format of an accounts payable subsidiary ledger is very similar to that of an accounts receivable subsidiary ledger.

Question 15

While posting the entries from a sales journal,the total of the Accounts Receivable DR,Sales Revenue CR column is posted to the accounts receivable subsidiary ledger

Accepted Answer

The answer of While posting the entries from a sales...

Question 16

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 disbursements. It is used to efficiently record and track transactions that occur frequently in a business. Option B refers to a subsidiary ledger, option C refers to a general ledger, and option D refers to a chart of accounts.

Question 17

While recording a transaction in the cash receipts journal,the Other Accounts CR column is used when a transaction involves a credit entry that is not listed in the headings (columns)of the cash receipts journal.

Accepted Answer

This is correct. The Other Accounts CR column allows for the recording of credit entries that do not fall under the predefined headings (columns) in the cash receipts journal.

Question 18

Which of the following is true of a control account?
A)It is a valuation account from which balances are added to another account.
B)Its balance equals the sum of the balances in a group of related accounts in a subsidiary ledger.
C)It is equivalent to a contra account and represents the offsetting nature of debits and credits on a firm's financial statements.
D)It holds individual accounts that support a general ledger account.

Accepted Answer

A control account is used to monitor and summarize the transactions in a subsidiary ledger. The balance of a control account equals the sum of the balances in the related accounts in the subsidiary ledger. Therefore, option B is the correct answer. Option A refers to a valuation account, which is used to adjust the value of an asset or liability over time. Option C refers to a contra account, which is an account that is paired with and offsets the balance of another account. Option D refers to a subsidiary ledger, which contains detailed information for individual accounts that support a general ledger account.

Question 19

Unlike the sales journal,entries in the cash receipts journal are posted monthly to the accounts receivable subsidiary ledger and daily to the general ledger.

Accepted Answer

For both the sales journal and cash receipts journal, entries are posted monthly to the accounts receivable subsidiary ledger and daily to the general ledger.

Question 20

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 related to cash transactions and need to be recorded in the general journal.

Quiz 27: Accounting Information Systems

A subsidiary ledger is ________.

The sale of merchandise inventory for cash is recorded in the ________.

Which of the following is true of a sales journal?

The credit sales of assets that occur infrequently,such as buildings,are recorded in the ________.

Generally,all transactions are recorded in a special journal as well as the general journal.

Cash receipts journal is a special journal used to record business transactions of all cash receipts and credit sales.

Centium Corporation sold goods to John Dunn for $1,000 on credit.Cost of goods sold was $745.Assuming that the firm is following a perpetual inventory system and using a sales journal,it will record $745 in the ________.

Which of the following serves as the "journal of last resort?"

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

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.

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

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

While posting the entries from a sales journal,the total of the Accounts Receivable DR,Sales Revenue CR column is posted to the accounts receivable subsidiary ledger

A special journal is ________.

While recording a transaction in the cash receipts journal,the Other Accounts CR column is used when a transaction involves a credit entry that is not listed in the headings (columns)of the cash receipts journal.

Which of the following is true of a control account?

Unlike the sales journal,entries in the cash receipts journal are posted monthly to the accounts receivable subsidiary ledger and daily to the general ledger.

Adjusting entries are recorded in the ________.