Accounting chapter 7

Which characteristic of an effective accounting information system refers to providing adequate safeguards of the business's assets and data?

Control

Elements of an Accounting Information System (AIS)

Control Compatibility Flexibility Relevance Positive cost/benefit relationship payroll

Jones Company paid monthly rent of $2,000. Which special journal should this transaction be recorded in? What columns will be used?

Cash Payments Journal - debit Rent Expense and credit Cash

What is a disadvantage of an ERP system?

Implementation requires a large commitment of time and people.

What is an advantage of an ERP system?

It replaces separate software systems, such as sales and payroll. competition, efficiency, forecasting, collaboration, scalability, integrated information, cost savings, streamlined processes, mobility, reporting,productivity, regulatory compliance, flexible, customer service, security

The outputs of a computerized Accounting Information System are called ________.

Reports

The purchases journal would always have the following:

a credit column for Accounts Payable

The cash payments journal would always have the following:

a credit column for Cash

The sales journal would have ________.

a debit column for Accounts Receivable

The cash receipts journal would always have the following:

a debit column for Cash

In a manual Accounting Information System, processing includes:

both journalizing and posting to ledgers

Baker Electronics purchases $50,000 of merchandise inventory with cash, and uses special journals. Which journal would this entry be recorded in?

cash payments journal

Jones Company purchases $10,000 of merchandise inventory with cash, and uses special journals. Which journal would this entry be recorded in?

cash payments journal

When using special journals, which special journal is used to record cash sales?

cash receipts journal

Which characteristic of an effective accounting information system refers to a system which works smoothly with the business's employees and organizational structure?

compatibility

Which is NOT a part of the definition of an Accounting Information System?

controls

When using special journals, closing entries would appear in the ________.

general journal

When using special journals, adjusting entries would appear in the ________.

general journal (Sales journals, Cash receipts journals, Purchases journals Cash payments journals)

Baker Electronics purchases $5,000 of merchandise inventory on account and uses special journals. Which journal would this entry be recorded in?

purchases journal

Jones Company purchases $10,000 of merchandise inventory on account and uses special journals. Which journal would this entry be recorded in?

purchases journal A purchase of merchandise inventory bought on account goes to the purchases journal.

Which characteristic of an effective accounting information system refers to providing information to improve decision making and reduces uncertainty?

relevance An effective accounting information system has five characteristics: control, compatibility, flexibility, relevance, and positive cost/benefit relationship. An effective Accounting Information System that provides information to improve decision making and reduces uncertainty is part of relevance.

Jones Company has a sale on account for $10,000. Which special journal is used to record the transaction?

sales journal

When using special journals, which special journal is used for sales on account?

sales journal

Accounts that keep a balance of each individual customer or supplier are called ________.

subsidiary accounts