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Principles of Accounting, Volume 1: Financial Accounting

Multiple Choice

Principles of Accounting, Volume 1: Financial AccountingMultiple Choice
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1.

LO 7.1So far, computer systems cannot yet ________.

  1. receive data and instructions from input devices such as a scanner.
  2. decide how to record a business transaction.
  3. communicate with other computers electronically.
  4. recognize that you made a mistake entering $100 when you meant to enter $101.
2.

LO 7.1Any device used to provide the results of processing data is a(n) ________ device.

  1. sources
  2. input
  3. output
  4. storage
3.

LO 7.1Source documents ________.

  1. are input devices
  2. are output devices
  3. do not have to be on paper
  4. cannot be electronic files
4.

LO 7.1All of the following can provide source data except ________.

  1. a scanning device at the grocery store
  2. a utility bill received in the mail
  3. a bar code reader
  4. software to process the source data
5.

LO 7.1A document that asks you to return an identifying part of it with your payment is a(n) ________.

  1. source document
  2. cloud document
  3. point-of-sale document
  4. turn-around document
6.

LO 7.1Which of the following is false about accounting information systems?

  1. They provide reports that people analyze.
  2. They prevent errors and stop employees from stealing inventory.
  3. They are designed to gather data about the company’s transactions.
  4. They consist of processes that involve input of data from source documents, processing, output, and storage.
7.

LO 7.2An unhappy customer just returned $50 of the items he purchased yesterday when he charged the goods to the company’s store credit card. Which special journal would the company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
8.

LO 7.2A customer just charged $150 of merchandise on the company’s own charge card. Which special journal would the company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
9.

LO 7.2A customer just charged $150 of merchandise using MasterCard. Which special journal would the company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
10.

LO 7.2The company just took a physical count of inventory and found $75 worth of inventory was unaccounted for. It was either stolen or damaged. Which journal would the company use to record the correction of the error in inventory?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
11.

LO 7.2Your company paid rent of $1,000 for the month with check number 1245. Which journal would the company use to record this?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
12.

LO 7.2On January 1, Incredible Infants sold goods to Babies Inc. for $1,540, terms 30 days, and received payment on January 18. Which journal would the company use to record this transaction on the 18th?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
13.

LO 7.2Received a check for $72 from a customer, Mr. White. Mr. White owed you $124. Which journal would the company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
14.

LO 7.2You returned damaged goods you had previously purchased from C.C. Rogers Inc. and received a credit memo for $250. Which journal would your company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
15.

LO 7.2Sold goods for $650 cash. Which journal would the company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
16.

LO 7.2Sandren & Co. purchased inventory on credit from Acto Supply Co. for $4,000. Sandren & Co. would record this transaction in the ________.

  1. general journal
  2. cash receipts journal
  3. cash disbursements journal
  4. purchases journal
  5. sales journal
17.

LO 7.3Sold goods for $650, credit terms net 30 days. Which journal would the company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
18.

LO 7.3You returned damaged goods to C.C. Rogers Inc. and received a credit memo for $250. Which journal(s) would the company use to record this transaction?

  1. sales journal only
  2. purchases journal and the accounts payable subsidiary ledger
  3. cash receipts journal and the accounts receivable subsidiary ledger
  4. cash disbursements journal and the accounts payable subsidiary ledger
  5. general journal and the accounts payable subsidiary ledger
19.

LO 7.3The sum of all the accounts in the accounts receivable subsidiary ledger should ________.

  1. equal the accounts receivable account balance in the general ledger before posting any amounts
  2. equal the accounts payable account balance in the general ledger before posting any amounts
  3. equal the accounts receivable account balance in the general ledger after posting all amounts
  4. equal the cash account balance in the general ledger after posting all amounts
20.

LO 7.3AB Inc. purchased inventory on account from YZ Inc. The amount was $500. AB Inc. uses an accounting information system with special journals. Which special journal would the company use to record this transaction?

  1. sales journal
  2. purchases journal
  3. cash receipts journal
  4. cash disbursements journal
  5. general journal
21.

LO 7.3You just posted a debit to ABC Co. in the accounts receivable subsidiary ledger. Which special journal did it come from?

  1. sales journal
  2. cash receipts journal
  3. purchases journal
  4. cash disbursements journal
  5. general journal
22.

LO 7.3You just posted a credit to Stars Inc. in the accounts receivable subsidiary ledger. Which special journal did it come from?

  1. sales journal
  2. cash receipts journal
  3. purchases journal
  4. cash disbursements journal
  5. general journal
23.

LO 7.3You just posted a debit to Cash in the general ledger. Which special journal did it come from?

  1. sales journal
  2. cash receipts journal
  3. purchases journal
  4. cash disbursements journal
  5. general journal
24.

LO 7.3You just posted a credit to Accounts Receivable. Which special journal did it come from?

  1. sales journal
  2. cash receipts journal
  3. purchases journal
  4. cash disbursements journal
  5. general journal
25.

LO 7.3You just posted a credit to Sales and a debit to Cash. Which special journal did it come from?

  1. sales journal
  2. cash receipts journal
  3. purchases journal
  4. cash disbursements journal
  5. general journal
26.

LO 7.5An enterprise resource planning (ERP) system ________.

  1. is software to help you prepare your tax return
  2. requires that you pay ransom before you can operate it
  3. is a large, company-wide integrated accounting information system that connects all of a company’s applications
  4. is part of the darknet
27.

LO 7.5Which of the following is not a way to prevent your computer from being attacked by ransomware?

  1. making sure your antivirus security programs are up to date
  2. opening all attachments from emails from unknown senders
  3. using secure (password protected) networks and backing up your files regularly
  4. not using open Wi-Fi (nonpassword, nonencrypted) in public locations
28.

LO 7.5Big data is mined ________.

  1. to find business trends
  2. to record transactions
  3. as an alternative to creating an accounting information system
  4. as an alternative to the darknet
29.

LO 7.5Artificial intelligence refers to ________.

  1. tutorials that can make humans smarter than they naturally are
  2. programming computers to mimic human reasoning and perform tasks previously performed by humans
  3. humans that do not possess reasonably high IQs
  4. a concept that exists only in science fiction but has not yet been achieved today
30.

LO 7.5Blockchain is a technology that ________.

  1. is in the early stages of being developed
  2. was a failed attempt to change the way we do business
  3. refers to an application developed strictly for the real estate business
  4. involves the use of a single shared ledger between the many parties that may be involved in a transaction.
31.

LO 7.5Which of the following is not true about cybercurrency?

  1. Bitcoin is one of several cybercurrencies.
  2. It is an alternate currency that does not go through the banking system.
  3. It does not involve the actual exchange of physical currency.
  4. All of these statements regarding Bitcoin are correct.
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