ACCTG 320 MC given questions

A document prepared at the time of shipment indicating the description of the merchandise, the quantity shipped and other relevant data. It is a written contract of the receipt and shipment of goods between the seller and the carrier. This document is a

bill of lading

An auditor has as his or her objective determining that sales transactions are recorded in the proper period. The document he or she will be most interested in is:

bill of lading

If the accountant was asked by management to determine the cost of inventory purchases during the year from a particular vendor, he would most likely examine which of the following to arrive at the answer:

accounts payable subsidiary ledger

If you received a request from a customer who wanted to know how much they owed, you would go to the:

accounts receivable - subsidiary ledger

When a customer of a company inquires about the amount which the customer owes the company, the clerk handling the question would go to the:

accounts receivable subsidiary ledger

What can the fixed asset subsidiary ledger be used to determine?

accumulated depreciation for a particular asset, the age of an asset, the estimated useful life of an asset

Which of the following items on a bank reconciliation would require an adjusting journal entry?

an error by the company bookkeeper in recording a cash disbursement

In the cash disbursements cycle, the vendor invoice is marked paid when a check is issued in order to:

avoid duplicate payment of the invoice.

Which of the following is not adjusted as an accrual by a Company at the end of the year?

accounts payable

What document does a customer receive when goods are returned?

credit memo

In order to maintain controls over cash receipts, cash is typically deposited _____, while a bank reconciliation is performed _____.

daily, monthly

To determine how many of a particular inventory item you have on hand at any particular time, you would:

examine the perpetual inventory record for the item.

Which of the following errors would not cause the trial balance to be out of balance?

failing to record a transaction

Which of the following is subtracted from an employee's gross pay:

federal income tax withholding

A document used to report to the federal government income taxes (federal income taxes and F.I.C.A.) withheld from wages of employees is called a:

form 491 or W-2 form

At Waren, where is the total net pay from the payroll journal posted?

general ledger

The overall objective of the Systems Understanding Aid is to:

help aid in the understanding and visualization of the entire accounting process.

An arrow with a dotted line ( ------>) in a systems flowchart indicates which of the following?

information flow only, no document flow

Time cards alone can be used by the payroll department to do which of the following?

keep track of the hours worked by each employee for each time period

Benefits of the perpetual inventory method include all but which of the following:

lower record-keeping costs than under the periodic method

At Waren, how often is the general ledger updated?

monthly

A remittance advice is used to:

pay or receive cash

A place where gross pay, withholdings, and net pay are recorded for all employees. The amounts are normally totaled and posted to the general ledger monthly. The above is called a

payroll journal

The general journal is used to:

post all accounting entries not posted in other individual journals.

A balance sheet can be prepared by reference to

post closing trial balance

Which of the following documents and records is not required to prepare a reconciliation?

prior month's bank statement

What is the normal sequence of recording a transaction where inventory was acquired?

purchase order, purchases journal, general ledger

Adjusting journal entries are prepared for which of the following?

record depreciation expense, adjust payroll expense for wages earned but not yet paid, record an inventory purchase

Which of the following transactions would not result in an entry to the accounts receivable subsidiary ledger?

recording provision for doubtful accounts

The clerk who opens mail is assigned responsibility for preparing a document which identifies all cash collections received in the mail for a given day. This document is called:

remittances prelist form

Which transaction would not affect perpetual inventory records?

sales discounts taken would affect it: - sale of merchandise - purchase of merchandise - sales returns - purchase returns

The basic source document which is used for recording a credit sale is

sales invoice

When processing the payment from a customer on an accounts receivable, the accountant needs at his disposal all of the following except:

sales invoice

A document that indicates such things as the description and quantity of goods and services received, the price including freight, the cash discount terms and the date of billing. It is an essential document because it specifies the amount of money owed for an acquisition. This document is a

sales invoice or vendor invoice

An auditor is interested in testing whether a sample of sales to customers in the current year have been recorded. In this case, the auditor would most likely select a sample from which source?

sales invoices

A document prepared in the sales department of most firms for recording the description, quantity and related information for goods purchased by their customers is called a

sales order

An auditor is interested in testing to see whether all items purchased over $500 were properly capitalized. In this case, the auditor would lost likely select a sample from which source?

the accounts payable subsidiary ledger

Closing entries are used to zero-out accounts that appear on which of the following statements:

the income statement, the statement of retained earnings

For the most effective and efficient control environment, payments for supplies purchases should be signed by

the manager of accounts payable

Why is the periodic inventory method used instead of the perpetual method for some companies?

the record keeping costs are lower

The pre-closing trial balance contains all information necessary to prepare which of the following?

the statement of cash flows, the statement of retained earnings, the income statement

The trial balance worksheet does not provide information sufficient to:

the trial balance worksheet is sufficient for all of the above purposes

The purpose of a bank reconciliation is to:

to identify the differences between the bank balance per bank statement and our balance per books

Which of the following documents originates outside the company?

vendor invoice

A document frequently used by organizations to establish a formal means of recording and controlling acquisitions. It is the basis not only for recording acquisitions in the journal but also for making cash disbursements. This document is called

voucher

Which of the following statements relating to the preparation of the year-end worksheet for Waren is false?

"Debit" columns represent increases to each account, while "credit" columns represent decreases to each account.

Which of the following are not shown on a fixed asset subsidiary ledger?

(all of the above are shown on the subs. ledger) estimated life, accumulated depreciation balance, cost of the asset, final disposition of the asset

Which of the following transactions would never be recorded in a cash disbursements journal?

(all of the above) purchase of inventory, sales return, payment of payroll withholdings, payment of shipping charges

What does the following flowchart describe?

A manual input was used in a manual process which generated a document.

Which of the following reconciling items on a bank reconciliation require an adjustment to the balance of the cash account?

A monthly service charge fee

Which is the most important assertion relating to cash receipts?

All amounts received are properly recorded.

Which items in the following list are required for the preparation of a proper bank reconciliation?

Bank statement, cash receipts journal, general ledger, prior month's bank reconciliation, cash disbursements journal

Which, if any, of the following is not a reason for preparing an accounts receivable aged trial balance?

Display activity (cash receipts and sales) for each individual account. reasons for: -Reconcile the control and subsidiary accounts. -Show in a convenient format a listing of accounts receivable for management review. -Provide information about the adequacy of the allowance for uncollectible accounts.

Using prenumbered sales invoices is the primary control procedure for

Ensuring that all sales transactions are recorded.

Which of the following statements is false?

If perpetual inventory records have been historically accurate, a physical inventory count can be omitted in a given year.

Which of the following statements about closing entries is false?

If there has been a net loss for the year, the Income Summary account is closed by a debit.

In a cash receipts system, which of the following controls will best ensure that all receipts received are properly recorded?

Mailing monthly statements to customers

Which of the following sequence of steps in the accounting process is correct?

Prepare records, record in journals, post to ledgers, and prepare unadjusted trial balance

In determining cost of goods sold under the periodic inventory method, which account is not affected?

Sales Discounts

When estimating uncollectible accounts, which of the following would be least useful?

Sales forecasts

What does it mean to "cancel" a vendor's invoice?

Writing "paid" on a vendor invoice when making a payment to prevent an invoice from being paid more than once.

Interpret the following credit terms: 2/10, Net 30.

a 2 percent discount can be taken if the balance is paid within 10 days; otherwise, the balance is due in 30 days.

what is a payroll journal?

a special journal where payroll hours, dollars and deductions are accumulated for subsequent posting to the general ledger accounts

Your company purchased merchandise from the "X" Corporation. As the "gopher" person in your company, you picked up the merchandise as you delivered the order to buy. You paid for the merchandise instantly with one of your company's checks. Where would this transaction be recorded first by your company?

cash disbursements journal

When a company receives a check in the mail in payment of an account receivable, the first recording of information about the collection is in the

cash receipts journal

A client's accounting records are unfamiliar to a new auditor. Where would a new auditor go to learn the names and numbers of the accounts being debited and credited in the transactions.

chart of accounts

A document that accompanies the bill mailed to the customer and can be returned to the seller with the cash payment is called a:

collection invoice

A document shown in a systems flowchart can:

come from a source outside the company, be prepared by the department being described in the flowchart, be received from a department not show in the flowchart

A document indicating a reduction in the amount due from a customer because of returned goods or an allowance granted is called a:

credit memo

For which of the following forms is an in-house authorization separate from the preparer most important at Waren?

credit memo