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Exam 5: Accounting Systems

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Question 61

Multiple Choice

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Each individual entry in the revenue journal is posted to the

A) accounts receivable controlling account
B) accounts receivable subsidiary ledger
C) revenue controlling account
D) accounts receivable subsidiary ledger and the controlling account

E) C) and D)
F) B) and D)

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Question 62

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The Other Accounts column in the cash receipts journal is used for recording debits to any account for which there is no special debit column.

A) True
B) False

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Question 63

Multiple Choice

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Which of the following general ledger accounts normally has a subsidiary ledger?

The presence of a subsidiary ledger requires the presence of a summarizing control account in the general ledger.

E-commerce

Services performed for cash should be recorded in the

The phase of accounting system installation in which the information needs of people in the organization are taken into account is

Specialized journals are books of original entry.

Sunrise Coffee Shop, in an effort to streamline its accounting system, has decided to utilize a cash receipts journal. Record the following transactions for the first two weeks in March, total the columns, and include the posting references. A partial chart of accounts is given below. After recording the transactions, indicate if there are any additional columns you would add to this journal.? $\textbf { Cash Receipts Journal }\\\begin{array}{|c|c|c|c|c|c|c|}\hline \text { Date } & \begin{array}{c}\text { Account } \\\text { Credited }\end{array} & \begin{array}{c}\text { Post. } \\\text { Ref. }\end{array} & \begin{array}{c}\text { Other } \\\text { Accounts } \\\text { Cr. }\end{array} & \begin{array}{c}\text { Beverage } \\\text { Revenue } \\\text { Cr. }\end{array} & \begin{array}{c}\text { Food } \\\text { Revenue } \\\text { Cr. }\end{array} & \begin{array}{c}\text { Cash } \\\text { Cr. }\end{array} \\\hline & & & & & & \\\hline & & & & & & \\\hline & & & & & & \\\hline & & & & & & \\\hline & & & & & & \\\hline & & & & & & \\\hline & & & & & & \\\hline\end{array}$ Mar. 1Cash received for beverages, $375. 1Cash received for food, $250. 1Cash received for customer sales of Sunrise's signature coffee mugs, $130. 7Cash received for beverages, $480. 7Cash received for food, $325. 7Cash received for customer sales of Sunrise's signature coffee mugs, $115. 10Cash received on account from Central.com, $900. $~~~~~~~~~~~~~~~~~~~~~~~~$ Chart of Accounts (Partial) $\begin{array}{ll}\hline10 \text { Cash } & 41 \text { Beverage Revenue } \\12 \text { Accounts Receivable } & 42 \text { Food Revenue } \\15 \text { Retail Items } & 43 \text { Retail Revenue }\end{array}$

The transactions completed by Franklin Company during January, its first month of operations, are listed below. Assume that Franklin Company uses the following journals: cash receipts (CR), cash payments (CP), revenue (R), purchases (P), and general (G). Assume that it uses accounts receivable and accounts payable subsidiary ledgers as well as a general ledger. Indicate by letters which journal would be used for each transaction and whether or not the entry requires a posting to a subsidiary ledger. a. CR, no subsidiary posting b. CP, no subsidiary posting c. $R$ , no subsidiary posting d. P, no subsidiary posting e. $G$ , no subsidiary posting f. CR, subsidiary posting g. CP, subsidiary posting h. R, subsidiary posting i. P, subsidiary posting j. G, subsidiary posting -Issued check for rent

The term B2C refers to transactions conducted between two companies.

When posting the column totals of a cash payments journal, a debit should be posted to

The format and number of specialized journals that a business uses depend upon the legal organization of the business.

Processing methods are the means by which the system collects, summarizes, and reports accounting information.

$\text { Match the transactions below with the journal or ledger in which it would be entered. }$ -Payment for supplies bought on account

When a large number of individual accounts with a common characteristic are grouped together in a separate ledger, the summarizing account in the general ledger is called a control account.

Maximilian Corporation provided revenue disclosures for the current year by its major product segments in the notes to its financial statements as follows:? $\begin{array} { | l | r | } \hline{ \textbf { Maj or Product Segments } } & \begin{array} { c } \textbf { Current Year } \\\textbf { (in millions) }\end{array} \\\hline \text { Petrol eum-based products } & \$ 10,450 \\\hline \text { Industrial chemicals } & 9,460 \\\hline \text { Refined chemical products } & 8,575 \\\hline \text { Food additives } & 7,325 \\\hline \text { Emulsifiers } & 6,900 \\\hline \text { Pesticides } & 5,870 \\\hline \text { Salts } & 4,545 \\\hline \text { Wetting agents } & 3,215 \\\hline { \text { Total revenues } } & \underline{\$ 56,340} \\\hline\end{array}$ Prepare a vertical analysis. Round to one decimal place.

Which of the following is always recorded in the general journal?

Define and describe an accounting system.

Two transactions were posted to the following supplier's (creditor's) account:NAME: Banner Computer Services, Inc.Address: 890 Novice Lane? $\begin{array} { | r | l | c | c | r | r | } \hline { \text { Date } } & \text { Item } & \text { Post. Ref. } & \text { Debit } & \text { Credit } & \text { Balance } \\\hline \text { July } 1 & \text { Balance } & \sqrt { } && & 5,645 \\\hline 19 & \text { Invoice No. } 45 & \text { P16 } & & 1,755 & 7,400 \\\hline 26 & \text { Invoice No. } 39 & \text { CP36 } & 3,500 & & 3,900 \\\hline\end{array}$ Describe each transaction and the source of each posting.