Question 1

What is the general ledger posting from the credit sales journal?
A) DR Sales, CR Accounts receivable
B) DR Sales, CR GST payable, CR Cash
C) DR Accounts receivable, CR Sales, CR GST payable
D) DR Cash, DR GST payable, CR Accounts receivable

Accepted Answer

When a credit sale is made, it is recorded as an increase in accounts receivable and an increase in sales. Since GST (Goods and Services Tax) is charged on sales, it is recorded as an increase in GST payable. Therefore, the correct posting in the general ledger for credit sales journal is DR Accounts receivable, CR Sales, CR GST payable.

Question 2

A Discount received column could be found in which special journal?
A) Cash receipts
B) Cash payments
C) Sales
D) Purchases

Accepted Answer

The answer of A Discount received column could be found...

Question 3

A general ledger account that summarises the detail maintained in a subsidiary ledger is called a:
A) key account.
B) summary account.
C) control account.
D) master account.

Accepted Answer

A control account is a general ledger account that summarises the detailed transactions maintained in a subsidiary ledger. It is used to ensure that the total of the subsidiary ledger equals the balance of the control account in the general ledger. The other options, key account, summary account and master account are not commonly used accounting terms.

Question 4

Subsidiary ledgers in a manual accounting system have three main advantages. Which of the following is not one of those advantages?
A) They dramatically reduce the occurrence of bad debts.
B) They remove a mass of detail from the general ledger.
C) They allow a division of labour in maintaining the general and subsidiary ledgers.
D) They improve internal control through the reconciliation of the control account with the subsidiary ledger.

Accepted Answer

Subsidiary ledgers do not have a direct impact on reducing bad debts. The other three options are advantages of subsidiary ledgers.

Question 5

Columns for GST receivable could be found in which two special journals?
A) Cash receipts and cash payments
B) Cash receipts and sales
C) Cash payments and purchases
D) Sales and purchases

Accepted Answer

GST receivable is typically recorded in the cash payments journal when GST is paid on purchases and in the purchases journal when recording credit purchases that include GST.

Question 6

The posting reference column in the general ledger is used to show the source journal for the transaction. Which of the following symbols is commonly used as a posting reference to refer to page 5 of the cash receipts journal?
A) CRJ5
B) 5CR
C) R5
D) C5R

Accepted Answer

The commonly used convention is to use the abbreviation of the journal (CRJ for cash receipts journal) followed by the page number (5 in this case). Therefore, the correct posting reference would be CRJ5. The other options do not follow this convention and may cause confusion or errors in record keeping.

Question 7

Which of the following is the main advantage of setting up special journals?
A) They can be used with a cash accounting system.
B) They remove the need for double entry recording.
C) They make the preparation of a trial balance easier.
D) They reduce the time required to journalise each entry and post to the general ledger.

Accepted Answer

Special journals are designed to record frequently occurring transactions in a systematic and efficient manner. They reduce the time required to journalise each entry and post to the general ledger, thereby increasing the productivity of accounting staff. As a result, choice D is the main advantage of setting up special journals. Option A is incorrect because special journals can be used with both cash and accrual accounting systems. Choice B is incorrect because all transactions must be recorded using double entry accounting principles. Choice C is incorrect because the preparation of a trial balance is not dependent on the use of special journals.

Question 8

Which of the following is an advantage of using a sales journal compared with recording all sales transactions in a general journal?
A) Narrations are required for each entry
B) Each sales transaction is recorded on multiple lines to provide full details
C) Only the totals of each column are posted to the general ledger
D) The date of each transaction is not required to be recorded

Accepted Answer

Using a sales journal allows for the efficiency of posting only the totals of each column to the general ledger, rather than recording each individual transaction in detail. This streamlines the accounting process and reduces the volume of entries in the general ledger.

Question 9

All the details of transactions between the entity and individual customers are found in the:
A) accounts receivable subsidiary ledger.
B) accounts payable control account.
C) accounts payable subsidiary ledger.
D) sales ledger.

Accepted Answer

The accounts receivable subsidiary ledger contains all the details of transactions between the entity and individual customers. It provides a detailed breakdown of individual customer balances and helps in tracking payments and outstanding balances. Option B and C are not correct as they pertain to transactions with suppliers/vendors and not customers. Option D is not a commonly used term in accounting and can be confused with the general ledger.

Question 10

Which of these is not an advantage of using special journals compared to recording all transactions in a general journal?
A) Preparation of a trial balance is easier.
B) Time required to journalise transactions is reduced.
C) Posting to the ledger is more efficient.
D) Similar transactions are grouped.

Accepted Answer

Preparation of a trial balance is equally easy regardless of whether special journals or a general journal is used, as long as all transactions are properly recorded and posted to the ledger.

Question 11

Which of the following statements is correct? In a manual accounting system:
A) cash purchases are recorded in the cash receipts journal.
B) cash purchases are recorded in the purchases journal.
C) cash purchases are recorded in the general journal.
D) cash purchases are recorded in the cash payments journal.

Accepted Answer

Cash purchases are recorded in the cash payments journal because this journal tracks all transactions where cash is paid out, including purchases made with cash.

Question 12

Which of the following transactions could not result in a credit balance in a debtor's account?
A) Receive a deposit from a debtor for goods ordered.
B) Customer returns a faulty product after they have paid the account in full.
C) Customer pays their account after the debt had been written off as a bad debt.
D) Goods are sold on credit with payment due in the next accounting period.

Accepted Answer

A credit balance in a debtor's account typically indicates that the customer has overpaid or that a specific transaction has led to the customer having a credit position against the seller. Options A, B, and C could all lead to a credit balance due to overpayment, returns, or recovery of previously written-off debts. However, option D, which involves selling goods on credit with payment due in the next accounting period, would initially result in a debit balance in the debtor's account, reflecting the amount the customer owes the company for the goods purchased on credit.

Question 13

A column for discount allowed could be found in which special journal?
A) General
B) Cash payments
C) Cash receipts
D) Sales

Accepted Answer

The Cash Receipts Journal is where a column for discount allowed would typically be found, as it records transactions involving the receipt of cash, including situations where a discount is allowed to a customer for early payment.

Question 14

Which of the following transactions would be recorded in the cash payments journal?
A) Payment of telephone account
B) Purchase of goods on credit
C) Rent accrued at the end of the accounting period
D) Personal expenses paid from owner's private cheque book

Accepted Answer

The cash payments journal is used to record all cash payments, including expenses such as telephone accounts. Purchases on credit would be recorded in the purchases journal, rent accrued would be recorded in the general journal, and personal expenses paid from the owner's private cheque book would not be recorded in the business's accounting records.

Question 15

Which of the following transactions would not be recorded in the cash receipts journal?
A) Cash refund to a customer for goods returned by them.
B) Goods sold for cash.
C) Second hand furniture sold for cash.
D) Borrowings received from the bank.

Accepted Answer

The cash receipts journal records all cash inflows, not outflows. A cash refund to a customer is an outflow and would be recorded in the cash disbursements journal, not the cash receipts journal.

Question 16

Which of the following is not a column heading in a purchases journal?
A) Purchase date
B) Supplier's name
C) GST receivable
D) Cash/Bank

Accepted Answer

The purchases journal is used to record credit purchases only, not cash or bank transactions. Cash or bank transactions are recorded in the cash book or bank journal.

Question 17

Individual stock records for a retail company are maintained in a:
A) control account.
B) subsidiary ledger.
C) special journal for inventory.
D) manual accounting system.

Accepted Answer

Individual stock records for a retail company are likely to be numerous, and it is easier to maintain them in a subsidiary ledger. A subsidiary ledger is a detailed record for a single account that summarizes information from the general ledger in a more detailed form. For example, to maintain records for each customer, a company can create a subsidiary ledger for accounts receivable. In this ledger, each customer has an individual record that shows all the transactions over a period, such as purchases and payments. Similarly, for stock records, creating a subsidiary ledger would allow the company to maintain detailed records for each item in stock. This would help in tracking inventory levels, sales, and losses due to theft or damages.

Question 18

A credit of $550 000, including 10% GST, was posted to the accounts payable control account on the last day of the month. This posting would most likely have come from which special journal?
A) Purchases journal
B) Sales journal
C) Cash receipts journal
D) Cash payments journal

Accepted Answer

The Purchases journal is where all credit purchases are recorded. Since the credit posted includes GST, it is likely that it relates to a purchase transaction.

Question 19

For a GST-registered business, columns for GST Payable will be found in which two special journals?
A) Sales and purchases
B) Cash receipts and sales
C) Cash receipts and cash payments
D) Cash receipts and purchases

Accepted Answer

The answer of For a GST-registered business, columns for GST...

Question 20

Source documents used for the preparation of the cash payments journal include:
A) Receipts to customers
B) Credit notes issued by suppliers
C) Signed contracts
D) Cheque butts

Accepted Answer

The cash payments journal is used to record all cash payments made by a business. The primary source document for this journal is the cheque butt, which provides details about the payment, including the payee, amount, and purpose. Receipts to customers, credit notes issued by suppliers, and signed contracts are not relevant to the cash payments journal, as they do not provide information about cash payments made by the business.

Quiz 7: Accounting for Systems

What is the general ledger posting from the credit sales journal?

A Discount received column could be found in which special journal?

A general ledger account that summarises the detail maintained in a subsidiary ledger is called a:

Subsidiary ledgers in a manual accounting system have three main advantages. Which of the following is not one of those advantages?

Columns for GST receivable could be found in which two special journals?

The posting reference column in the general ledger is used to show the source journal for the transaction. Which of the following symbols is commonly used as a posting reference to refer to page 5 of the cash receipts journal?

Which of the following is the main advantage of setting up special journals?

Which of the following is an advantage of using a sales journal compared with recording all sales transactions in a general journal?

All the details of transactions between the entity and individual customers are found in the:

Which of these is not an advantage of using special journals compared to recording all transactions in a general journal?

Which of the following statements is correct? In a manual accounting system:

Which of the following transactions could not result in a credit balance in a debtor's account?

A column for discount allowed could be found in which special journal?

Which of the following transactions would be recorded in the cash payments journal?

Which of the following transactions would not be recorded in the cash receipts journal?

Which of the following is not a column heading in a purchases journal?

Individual stock records for a retail company are maintained in a:

A credit of $550 000, including 10% GST, was posted to the accounts payable control account on the last day of the month. This posting would most likely have come from which special journal?

For a GST-registered business, columns for GST Payable will be found in which two special journals?

Source documents used for the preparation of the cash payments journal include: