Accounting Ch. 5 Test Questions

question

The methods and procedures for collecting, classifying, summarizing, and reporting financial information make up
answer

an accounting system
question

An accounting system must be able to
answer

a. report information. b. All of these choices are correct. c. summarize information. d. collect and classify information. Correct answer: B
question

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.
answer

Design
question

The subsidiary ledger that tracks customers is the
answer

accounts receivable ledger
question

A special journal is used for
answer

recording a single kind of transaction that occurs frequently
question

Which of the following is a common special journal to record cash sales?
answer

Cash receipts journal
question

Large companies have their accounting systems integrated within the automated business systems of the firm. Such integrated software is known as
answer

enterprise resource planning
question

An advantage of using a computer system is
answer

the simultaneously updating of customer or vendor subsidiary ledgers
question

A computerized accounting system
answer

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

E-commerce refers to using
answer

the Internet to perform business transactions
question

Internet applications to plan and coordinate marketing and sales efforts are known as
answer

customer relationship management
question

The Internet is being used by businesses for supply chain management (SCM), which can be defined as
answer

internet applications to plan supply needs and coordinate suppliers
question

When reporting segment revenue, businesses can be segmented by
answer

a. product or service. b. All of these choices are correct. c. type of customer. d. region. Correct answer: B
question

Segment analysis helps to
answer

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
question

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?
answer

12.5% increase
question

Segment revenues are determined by
answer

invoice data that are entered into the accounting system
question

3 step process
answer

1. Analyze user information needs 2. Design the system to meet user needs 3. Implement the system
question

Internal controls
answer

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.
question

Processing methods
answer

Are the means by which the accounting system collects, summarizes, and reports accounting information. Include manual or computerized.
question

Subsidiary Ledger
answer

A large number of individual accounts with a common characteristic can be grouped together in a separate ledger
question

General Ledger
answer

Primary ledger, which contains all of the balance sheet and income statement accounts
question

Controlling Account
answer

Each subsidiary ledger is represented in the general ledger by a summarizing account and is called this
question

Accounts receivable sub leger
answer

(Customers ledger) and lists the individual customer accounts.
question

Accounts payable sub ledger
answer

(Creditors ledger) that lists individual creditor accounts
question

Special journals
answer

Designed to record a single kind of transaction that occurs frequently
question

Providing services on account are recorded in the
answer

Revenue Journal
question

Receipt of cash from any sources are recored in the
answer

Cash receipts journal
question

Purchase of items on account are recorded in the
answer

Purchases Journal
question

Payment of cash for any purpose are recorded in the
answer

Cash payments journal
question

Supply Chain Management (SCM)
answer

Internet Applications to plan supply needs and coordinate them with suppliers
question

Customer relationship management (CRM)
answer

Internet applications to plan and coordinate marketing a sales effort
question

Product life-cycle management (PLM)
answer

Internet applications to plan and coordinate the product development and design process
question

Sales on account should be recorded in the ________ journal and _________ subsidiary ledger.
answer

Revenue journal; accounts receivable
question

______________ should be recorded in the cash receipts journal and _________ subsidiary journal.
answer

Cash receipts; accounts receivable
question

Purchases made on account should be recorded in the _________ journal and ___________ subsidiary ledger.
answer

Purchases; accounts payable
question

__________ should be recorded in the cash payments journal and ___________ subsidiary ledger.
answer

Cash payments; accounts payable
question

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.
answer

a. Yes b. No c. Yes
question

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.
answer

a. Design the system to meet the user needs. b. Analyze user information needs. c. Implement the system.
question

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
answer

a. Design the system to meet the user needs. b. Implement the system. c. Analyze user information needs.
question

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
answer

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
question

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
answer

a. Yes b. Yes c. No
question

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
answer

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
question

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.
answer

a. Business-to-consumer b. Business-to-business c. Business-to-business
question

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.
answer

a. Neither b. Business-to-business c. Business-to-consumer
question

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.
answer

a. Business-to-consumer b. Business-to-consumer c. Neither

Get instant access to
all materials

Become a Member