Question 1

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

Accepted Answer

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

Question 2

If a business uses the periodic inventory system,the sales journal will ________.

Accepted Answer

In a periodic inventory system, the Cost of Goods Sold (COGS) and Merchandise Inventory are not updated at the time of each sale. Instead, these accounts are adjusted at the end of the accounting period through a physical inventory count. Therefore, the sales journal, which records sales transactions, would exclude the COGS DR and Merchandise Inventory CR entries, as these are only calculated and recorded at the end of the period when inventory is physically counted.

Question 3

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

Accepted Answer

The Other Accounts CR column is used to record any credits that do not relate to sales or accounts receivable, such as interest revenue received.

Question 4

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

Accepted Answer

The CR.5 posting reference indicates that the posting is transferred from the cash receipts journal, page 5.

Question 5

In a perpetual inventory system,when cash sales are recorded,________.

Accepted Answer

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

Question 6

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

Accepted Answer

Purchases journal is used to record all purchases of merchandise inventory made on account.

Question 7

Every transaction recorded in the cash receipt journal includes a ________.

Accepted Answer

Every transaction recorded in the cash receipt journal involves an inflow of cash, which would be debited to the cash account. Therefore, the correct choice is D, debit to cash.

Question 8

MultiMet Corporation sold merchandise for $4,450 to Simpsons Inc.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 ________.

Accepted Answer

Since MultiMet Corporation is following a perpetual inventory system, it will record the sale of merchandise on credit in the Accounts Receivable DR, Sales Revenue CR column of the sales journal. This journal entry increases the Accounts Receivable account and the Sales Revenue account while also recognizing the cost of goods sold in the COGS account.

Question 9

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

Accepted Answer

In a cash receipts journal, cash sales are recorded with entries in the Sales Revenue CR column, reflecting the credit to sales revenue when cash is received.

Question 10

Depreciation of fixed assets is recorded in a ________.

Accepted Answer

Depreciation is a non-cash transaction and is recorded in the general journal.

Question 11

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 true.

Question 12

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

Accepted Answer

The cash receipts journal is used to record transactions where cash is received, such as cash sales.

Question 13

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 ________.

Accepted Answer

Footing refers to the process of adding up the totals of a column in a journal or ledger. The totals of the Accounts Receivable DR, Sales Revenue CR, Cost of Goods Sold DR, and Merchandise Inventory CR columns need to be footed to ensure accuracy and balance in the accounts. Scalping, ticking, and framing are not relevant to this process.

Question 14

Tangent Corporation sold a product for $7,150 to Michael Cardon 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 ________.

Accepted Answer

The answer of Tangent Corporation sold a product for $7,150...

Question 15

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

Accepted Answer

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

Question 16

Hexagon Corporation sold a product on credit for $2,235 to Merin Lynch.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 ________.

Accepted Answer

In a perpetual inventory system and using a sales journal, the sale of a product on credit will be recorded by debiting the Accounts Receivable account and crediting the Sales Revenue account. Therefore, the correct option is D, Accounts Receivable DR, Sales Revenue CR column. The Cost of Goods Sold is recorded separately when the merchandise is sold, which in this case is already given as $1,324. Option A, B, and C are incorrect because they do not follow the standard accounting treatment for recording sales on credit in a perpetual inventory system using a sales journal.

Question 17

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

Accepted Answer

Sales transactions, such as this one, are recorded in the sales journal. The cash payments journal is used for recording payments made by the company, the cash receipts journal is used for recording cash received by the company, and the purchase journal is used for recording purchases made by the company.

Question 18

Cash purchases are recorded in the purchases journal.

Accepted Answer

Cash purchases are recorded in the cash payments journal, not in the purchases journal. The purchases journal records credit purchases or purchases on account.

Question 19

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

Accepted Answer

Posting from a sales journal to the general ledger involves the daily posting of individual accounts receivable to the accounts receivable subsidiary ledger. Option A is incorrect because entries in the sales journal are only posted to the accounts receivable subsidiary ledger, not the general ledger. Option C is incorrect because the sales journal is not a reliable record of the amount receivable from each customer since it only shows a summary of all sales transactions. Option D is also irrelevant to the question, as it pertains to the columns found in a sales journal under a perpetual inventory system.

Question 20

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

Accepted Answer

The cash receipts journal typically includes columns for sales revenue, merchandise inventory credit, and other accounts credit. However, the interest revenue would not be recorded in the cash receipts journal as it is not related to the sale of merchandise or collection of accounts receivable.

Quiz 27: Accounting Information Systems