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Exam 7: Accounting Information Systems

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Question 61

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A company using the perpetual inventory system records the increase in cost of goods sold and decrease in inventory at the time of each sale in the sales journal.

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Question 62

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An advantage of online processing is that databases are updated in batches.

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Question 63

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The following special journal is taken from a merchandising company that uses the perpetual inventory system: 1. What is the name of the journal shown above? 2. Write an explanation for each entry in this journal. 3. What do the numbers in parentheses at the bottom of the journal indicate?

Enter the letter of the following terms on the line next to the appropriate definition of each. 1. The component of an accounting system that is the means to take information from an accounting system and make it available to users. 2. The means of collecting and processing data from transactions and events, organizing them into useful reports, and communicating results to decision makers. 3. A record of the separate accounts of each supplier that supports its general ledger controlling account. 4. The component of an accounting system that keeps data in a form accessible to information processors. 5. The special journal used to record all receipts of cash. 6. The special journal that is used to record all cash payments. 7. The component of an accounting system that captures source document information and enables its transfer to the information processor. 8. An information system principle that prescribes that an accounting system have methods and procedures allowing managers to control and monitor business activities. 9. The special journal used to record all purchases made on account. 10. An information system principle requiring that an accounting system report useful, understandable, timely, and pertinent information for decision making.

The general journal is used for transactions not covered by special journals and for adjusting, closing, and correcting entries.

Doughton Furniture Company purchased merchandise on credit from Furniture Supply for $8,000. Two days later Doughton returned $2,000 of the merchandise due to damage. Doughton would record the return of merchandise in the:

A company entered into the following transactions. For each transaction, indicate the appropriate journal in which it should be recorded. a. Sales Journal b. Purchases Journal c. Cash Receipts Journal d. Cash Disbursements Journal e. General Journal _____ 1. Purchased merchandise on credit. _____ 2. Sold merchandise on credit. 3. Purchased merchandise for cash. _____ 4. Sold merchandise for cash. _____ 5. Paid cash to settle the utility bill. _____ 6. Owner invested more cash in the business. _____ 7. Recorded depreciation for the period. _____ 8. Borrowed cash from the bank. 9. Bought office supplies on credit. 10. Received cash from a customer to settle an account receivable.

The accounting principle that prescribes an accounting information system conform with a company's activities, personnel, and structure is the:

Which of the following is not a feature of special journals?

A ________ is a part of a company that is separately identified by its products, or services, or by the geographic market it serves.

A business segment is a part of a company that is separately identified by its products or services, or by the geographic market it serves.

________ is the accounting system component that keeps data in a form accessible to information processors.

________ processing of transactions accumulates source documents for a period of time and then processes them all at once such as daily, weekly, or monthly.

The compatibility principle requires that an accounting system report useful, understandable, timely, and pertinent information for effective decision making.

Accounting information processes are structured to eliminate the need for professional judgment.

A ________ journal is used to record and post transactions of similar type.

______________refers to the programs that help managers direct a company's vital operations.

The Accounts Payable account in the general ledger is:

The purchases journal is used for recording:

An approach that enters and processes data into the accounting system as soon as source documents are available is called: