Accounting Ch. 5 Test Questions – Flashcards
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The methods and procedures for collecting, classifying, summarizing, and reporting financial information make up
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an accounting system
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An accounting system must be able to
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a. report information. b. All of these choices are correct. c. summarize information. d. collect and classify information. Correct answer: B
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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.
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Design
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The subsidiary ledger that tracks customers is the
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accounts receivable ledger
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A special journal is used for
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recording a single kind of transaction that occurs frequently
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Which of the following is a common special journal to record cash sales?
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Cash receipts journal
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Large companies have their accounting systems integrated within the automated business systems of the firm. Such integrated software is known as
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enterprise resource planning
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An advantage of using a computer system is
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the simultaneously updating of customer or vendor subsidiary ledgers
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A computerized accounting system
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allows the generation of several types of reports to meet the needs of stakeholders
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E-commerce refers to using
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the Internet to perform business transactions
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Internet applications to plan and coordinate marketing and sales efforts are known as
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customer relationship management
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The Internet is being used by businesses for supply chain management (SCM), which can be defined as
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internet applications to plan supply needs and coordinate suppliers
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When reporting segment revenue, businesses can be segmented by
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a. product or service. b. All of these choices are correct. c. type of customer. d. region. Correct answer: B
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Segment analysis helps to
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a. determine the amount of revenue earned by each segment. b. All of these choices are correct. c. determine the increases and/or decreases over a time period of each segment. d. analyze the contributions of various segments to the total operating performance of a company. Correct answer: B
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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?
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12.5% increase
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Segment revenues are determined by
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invoice data that are entered into the accounting system
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3 step process
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1. Analyze user information needs 2. Design the system to meet user needs 3. Implement the system
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Internal controls
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The policies and procedures that protect assets from misuse to ensure that business information is accurate, and ensure that laws and regulations are being followed.
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Processing methods
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Are the means by which the accounting system collects, summarizes, and reports accounting information. Include manual or computerized.
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Subsidiary Ledger
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A large number of individual accounts with a common characteristic can be grouped together in a separate ledger
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General Ledger
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Primary ledger, which contains all of the balance sheet and income statement accounts
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Controlling Account
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Each subsidiary ledger is represented in the general ledger by a summarizing account and is called this
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Accounts receivable sub leger
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(Customers ledger) and lists the individual customer accounts.
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Accounts payable sub ledger
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(Creditors ledger) that lists individual creditor accounts
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Special journals
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Designed to record a single kind of transaction that occurs frequently
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Providing services on account are recorded in the
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Revenue Journal
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Receipt of cash from any sources are recored in the
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Cash receipts journal
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Purchase of items on account are recorded in the
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Purchases Journal
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Payment of cash for any purpose are recorded in the
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Cash payments journal
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Supply Chain Management (SCM)
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Internet Applications to plan supply needs and coordinate them with suppliers
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Customer relationship management (CRM)
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Internet applications to plan and coordinate marketing a sales effort
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Product life-cycle management (PLM)
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Internet applications to plan and coordinate the product development and design process
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Sales on account should be recorded in the ________ journal and _________ subsidiary ledger.
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Revenue journal; accounts receivable
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______________ should be recorded in the cash receipts journal and _________ subsidiary journal.
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Cash receipts; accounts receivable
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Purchases made on account should be recorded in the _________ journal and ___________ subsidiary ledger.
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Purchases; accounts payable
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__________ should be recorded in the cash payments journal and ___________ subsidiary ledger.
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Cash payments; accounts payable
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Identify which of the following are steps in the three-step process of the accounting system. a. Implement the system. b. Obtain acceptance of the system from users. c. Analyze user information needs.
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a. Yes b. No c. Yes
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Determine to which step in the accounting system each of the following descriptions relates. a. Decide which types of journals and ledgers to use. b. Identify users and their intended uses of the financial information. c. Prepare the necessary financial statements.
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a. Design the system to meet the user needs. b. Analyze user information needs. c. Implement the system.
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Which steps relate to each of the following descriptions given? a. Creating a system of internal controls and information processing methods b. Using information from users to improve the system and ensure efficiency c. Determining the information that the users will require
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a. Design the system to meet the user needs. b. Implement the system. c. Analyze user information needs.
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Put the following steps in the correct order of use when using a computerized accounting system. a. Preparing a report to list the revenue by customer for the month b. Recording revenue by completing an electronic invoice form c. Recording the collection of cash from customers
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1st: Recording revenue by completing an electronic invoice form 2nd: Recording the collection of cash from customers 3rd: Preparing a report to list the revenue by customer for the month
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Which of the following is not a step when using a computerized accounting system? a. Creating a manager's report from software b. Entering transactions by using electronic forms c. Researching inventories using catalogs from distributers
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a. Yes b. Yes c. No
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Determine the correct order of the following steps when using a computerized accounting system. a. Entering the collection of cash from customers into the system b. Recording the rental revenue using the electronic invoices c. Creating a cash receipt report to inspect any overdue amounts
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Determine the correct order of the following steps when using a computerized accounting system. 1st: Recording the rental revenue using the electronic invoices 2nd: Entering the collection of cash from customers into the system 3rd: Creating a cash receipt report to inspect any overdue amounts
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Determine whether each of the following businesses is using business-to-business e- commerce, business-to-consumer e-commerce, or neither. a. A retail store sells products online to find new customers worldwide. b. An oil company has an online system to sell to gas stations. c. A dentist uses an online ordering system for supplies to use on customers.
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a. Business-to-consumer b. Business-to-business c. Business-to-business
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Determine whether each of the following transactions would be classified as business- to-business e-commerce, business-to-consumer e-commerce, or neither. a. A shopper researches new products online, which she buys in-store. b. A business uses an online banking system for payments on customer accounts from its large retailers. c. A customer purchases a book collection online from a large bookstore.
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a. Neither b. Business-to-business c. Business-to-consumer
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Determine whether each of the following transactions would be classified as business- to-business e-commerce, business-to-consumer e-commerce, or neither. a. A customer uses online banking to pay its utility bills. b. After seeing an item in store, a shopper buys the product from the manufacturer online at a lower price. c. A business identifies weaknesses in its product line using an electronic testing system.
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a. Business-to-consumer b. Business-to-consumer c. Neither
