Chapter 5 - Accounting Systems

invoice

The bill that the seller sends to the buyer.

Stevens Company does business in two regional segments: Black and Rose. The following annual revenue information was determined: Segment 2014 2013 Black $65,000 $60,000 Rose 70,000 80,000 Total revenues $135,000 $140,000 Using vertical analysis, what is revenue as a percent of total revenues for the Rose region in 2014 (rounded to the nearest one decimal place)? a. 51.9% b. 57.1% c. 42.9% d. 48.1% Feedback: $70,000 / $135,000 = 51.9%

51.9%

Leggett Company does business in two regional segments: Mountains and Plains. The following annual revenue information was determined: Segment 2014 2013 Mountains $45,000 $40,000 Plains 50,000 60,000 Total revenues $95,000 $100,000 Using vertical analysis, what is revenue as a percent of total revenues for the Plains region in 2013? a. 52.6% b. 60.0% c. 40.0% d. 47.4% eedback: $60,000 / $100,000 = 60.0%

60.0%

subsidiary ledger

A ledger containing individual accounts with a common characteristic.

What column would be used in a purchases journal for a lawn service company? a. Accounts receivable credit b. Accounts receivable debit c. Accounts payable credit d. Accounts payable debit

Accounts payable credit

An accounting system must be able to a. summarize information. b. All of these choices are correct. c. collect and classify information. d. report information.

All of these choices are correct.

An advantage of using a computer system is a. the ease of report creation. b. All of these choices are correct. c. more accurate information. d. simplified data entry.

All of these choices are correct.

Segment analysis helps to a. determine the increases and/or decreases over a time period of each segment. b. All of these choices are correct. c. analyze the contributions of various segments to the total operating performance of a company. d. determine the amount of revenue earned by each segment.

All of these choices are correct.

When reporting segment revenue, businesses can be segmented by a. type of customer. b. All of these choices are correct. c. region. d. product or service.

All of these choices are correct.

Which of the following is a common special journal to record cash sales? a. Revenue journal b. Cash payments journal c. Purchases journal d. Cash receipts journal

Cash receipts journal

special journals

Journals designed to be used for recording a single type of transaction.

purchases journal

The journal in which all items purchased on account are recorded.

The subsidiary ledger that tracks customers is the a. general ledger. b. inventories ledger. c. accounts receivable ledger. d. accounts payable ledger.

accounts receivable ledger.

The term B2B refers to e-commerce transactions between a. business and business. b. buyers and bankers. c. buyers and buyers. d. bankers and business.

business and business.

The process in the evolution of an accounting system that determines how the system should provide information and meet the users' needs is the ______________ stage. a. feedback b. design c. analysis d. implementation

design

The design stage of developing an accounting system should a. ensure the system meets the users' needs. b. ensure the system is pleasing in appearance. c. analyze user information needs. d. ensure the smooth implementation of the system.

ensure the system meets the users' needs.

All of the following are primary functions of internal controls except: a. policies and procedures for company conference room reservations. b. policies and procedures that ensure that laws and regulations are being followed. c. policies and procedures that protect assets from misuse. d. policies and procedures that ensure that business information is accurate.

policies and procedures for company conference room reservations.

E-commerce has streamlined the a. payment cycle only. b. purchase cycle only by automating transactions. c. purchase and payment cycle by automating transactions and eliminating paperwork. d. purchase cycle but has increased paperwork in the payment cycle.

purchase and payment cycle by automating transactions and eliminating paperwork.

A special journal is used for a. recording transactions that are unique and need to be kept apart. b. only cash transactions. c. recording transactions that affect a special or subsidiary ledger. d. recording a single kind of transaction that occurs frequently.

recording a single kind of transaction that occurs frequently.

Computerized accounting systems are used to a. avoid paying taxes. b. simplify the authorization of transactions. c. simplify the record-keeping system. d. simplify the use of special journals.

simplify the record-keeping system.

E-commerce refers to using a. computers to send information to stakeholders. b. the Internet to perform business transactions. c. computers to perform accounting operations. d. the Internet to check on price changes.

the Internet to perform business transactions.

Thompson Company does business in two regional segments: North and South. The following annual revenue information was determined: Segment 2014 2013 North $65,000 $60,000 South 70,000 80,000 Total revenues $135,000 $140,000 Using horizontal analysis, what is the percent change for the South region? a. 12.5% decrease b. 14.3% decrease c. 7.7% increase d. 8.3% increase Feedback: ($70,000 - $80,000) / $80,000 = 12.5% decrease

12.5% decrease

Leggett Company does business in two regional segments: Mountains and Plains. The following annual revenue information was determined: Segment 2014 2013 Mountains $45,000 $40,000 Plains 50,000 60,000 Total revenues $95,000 $100,000 Using horizontal analysis, what is the percentage change of the Mountains region? a. 12.5% increase b. 5% decrease c. 40% increase d. 16.6% decrease Feedback: ($45,000 - $40,000) / $40,000 = 12.5%

12.5% increase

Which of the following is a common special journal? a. Revenue journal b. All of these choices are correct. c. Purchases journal d. Cash payments journal

All of these choices are correct.

A popular computerized accounting software is a. QuickBooks. b. Cisco Systems. c. Word. d. Excel.

QuickBooks.

Which of the following is not true regarding segment analysis? a. Segment analysis helps determine the increases and/or decreases over a time period of each segment. b. Segment analysis helps determine the amount of revenue earned by each segment. c. Segment analysis helps analyze the contributions of various segments to the total operating performance of a company. d. Segment analysis dictates total operating performance of a company.

Segment analysis dictates total operating performance of a company.

controlling account

The account in the general ledger that summarizes the balances of the accounts in a subsidiary ledger.

revenue journal

The journal in which all sales and services on account are recorded.

accounting system

The methods and procedures used by a business to collect, classify, summarize, and report financial data for use by management and external users.

internal controls

The policies and procedures used to safeguard assets, ensure accurate business information, and ensure compliance with laws and regulations.

general ledger

The primary ledger, when used in conjunction with subsidiary ledgers, that contains all of the balance sheet and income statement accounts.

cash payments journal

The special journal in which all cash payments are recorded.

cash receipts journal

The special journal in which all cash receipts are recorded.

accounts receivable subsidiary ledger

The subsidiary ledger containing the individual accounts with customers.

accounts payable subsidiary ledger

The subsidiary ledger containing the individual accounts with suppliers (creditors).

general journal

The two-column form used for entries that do not ?fit? in any of the special journals.

e-commerce

The use of the Internet for performing business transactions.

A computerized accounting system a. collects data which is retrieved to enter information. b. is used to enter only unique information. c. allows the generation of several types of reports to meet the needs of stakeholders. d. can be used to report only special reports that are too difficult to prepare manually.

allows the generation of several types of reports to meet the needs of stakeholders.

The methods and procedures for collecting, classifying, summarizing, and reporting financial information make up a. an accounting system. b. e-commerce. c. subsidiary ledgers. d. bookkeeping.

an accounting system.

The term B2C refers to transactions between a. business and clients. b. business and consumer. c. buyers and customers. d. bankers and clients.

business and consumer.

Internet applications to plan and coordinate marketing and sales efforts are known as a. product life-cycle management. b. cloud software management. c. supply chain management. d. customer relationship management.

customer relationship management.

Large companies have their accounting systems integrated within the automated business systems of the firm. Such integrated software is known as a. integrated business network. b. exchange record planning. c. exchange resource project. d. enterprise resource planning.

enterprise resource planning.

All of the following are examples of subsidiary ledgers except: a. general ledger. b. equipment ledger. c. customers ledger. d. creditors ledger.

general ledger.

Segment analysis uses a. horizontal and vertical comparisons. b. neither horizontal nor vertical comparisons. c. horizontal comparisons. d. vertical comparisons.

horizontal and vertical comparisons.

The Internet is being used by businesses for supply chain management (SCM), which can be defined as a. internet applications to plan and coordinate the product development and design process. b. streamlining purchases and payments by automating transactions and eliminating paperwork. c. internet applications to plan supply needs and coordinate suppliers. d. internet applications to plan and coordinate marketing and sales efforts.

internet applications to plan supply needs and coordinate suppliers.

The best definition for processing systems is the a. procedures used by managers in dealing with disruptive employees. b. policies and procedures that protect assets from misuse. c. policies that employees must follow while working in the company. d. means by which the system collects, summarizes, and reports accounting information.

means by which the system collects, summarizes, and reports accounting information.

An advantage of using a computer system is a. not having to run several reports. b. All of these choices are correct. c. not having to authorize transactions. d. the simultaneously updating of customer or vendor subsidiary ledgers.

the simultaneously updating of customer or vendor subsidiary ledgers.