chapter 7

The one characteristic that all entries recorded in a cash payments journal have in common is

a debit to cash account

A subsidiary ledger is

a group of accounts with a common characteristic that provides detailed information about a control account in the general ledger.

In which journal would a cash purchase of inventory be recorded?

cash payment journal

Accounts Receivable and Accounts Payable are examples of

controlling accounts.

Postings to the control accounts in the general ledger are made

daily

The principles of developing an accounting information system do not include

elimination of human involvement.

A subsidiary ledger is a group of control accounts which provides information to the managers for controlling the operation of the company.

false

If a transaction cannot be recorded in a special journal, it indicates that the company should adopt an electronic accounting system.

false

Postings are generally made more frequently to the general ledger control accounts than to the individual accounts in the subsidiary ledgers.

false

Postings are made daily to subsidiary ledgers so that

individual account information is kept current.

A subsidiary ledger frees the general ledger from details of

individual balances.

If a transaction cannot be recorded in a special journal

it is recorded in the general journal

A sales journal is used to record

only credit sales merchandise

To be useful, the information outputs of a system should be

relevant, reliable, timely, and accurate.

The accounting environment does not change as a result of

the double entry system.

A control account and subsidiary ledger can be established for inventory.

true

A one-column purchases journal is used to record purchases of merchandise on account.

true

A subsidiary ledger provides up-to-date information on specific account balances.

true

Principles of an efficient and effective accounting information system include all of the following except

All

Which of the following is not a basic principle of designing and developing an effective accounting information system?

Approval by the SEC

In which journal would a customer's partial payment on account be recorded?

cash receipt journal

If a customer takes a sales discount, an entry is made in the

cash receipts journal.

Special journals are used to record unique transactions which do not occur very often.

false

The cash payments journal only has one column because all entries recorded in this journal require a credit to the Cash account.

false

The total of the individual account balances in the accounts receivable subsidiary ledger should agree with the total of the individual account balances in the accounts payable subsidiary ledger.

false

Transaction amounts recorded in the general journal are never posted to accounts in the subsidiary ledger.

false

When special journals are employed, all postings must be monthly or daily but cannot be both.

false

Entries in the purchases journal are made

from purchase invoices

The balance of a control account in the general ledger

must equal the composite balance of individual accounts in a related subsidiary ledger.

A company would not likely use subsidiary ledgers for

owner's capital.

Cross-footing a cash receipts journal means

the equality of debits and credits in the journal have been proved

An accounting information system involves data collection, data processing, and information dissemination.

true

Control accounts are always located in the general ledger.

true

Only transactions that cannot be entered in a special journal are recorded in the general journal.

true

The accounts payable subsidiary ledger provides detailed information about amounts owed to creditors.

true

Totaling the columns of a journal and proving the equality of the totals is called footing and cross-footing a journal

true

Using special journals can save time in posting because column totals are often posted monthly rather than daily to individual entries.

true

When control and subsidiary accounts are involved, there must be a dual posting.

true

Postings are made daily to the

Accounts Receivable subsidiary ledger.

Which of the following is not an advantage of a subsidiary ledger?

Puts greater detail in the general ledger

General ledger accounting systems are software programs that integrate the various accounting functions related to sales, purchases, cash receipts and disbursements, and payroll.

True