OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
Multiple Choice
1. LO 7.1 So far, computer systems cannot yet ________.
A. receive data and instructions from input devices such as a scanner.
B. decide how to record a business transaction.
C. communicate with other computers electronically.
D. recognize that you made a mistake entering $100 when you meant to enter $101.
Solution
D
2. LO 7.1 Any device used to provide the results of processing data is a(n) ________ device.
A. sources
B. input
C. output
D. storage
Solution
C
3. LO 7.1 Source documents ________.
A. are input devices
B. are output devices
C. do not have to be on paper
D. cannot be electronic files
Solution
C
4. LO 7.1 All of the following can provide source data except ________.
A. a scanning device at the grocery store
B. a utility bill received in the mail
C. a bar code reader
D. software to process the source data
Solution
D
5. LO 7.1 A document that asks you to return an identifying part of it with your payment is a(n)
________.
A. source document
B. cloud document
C. point-of-sale document
D. turn-around document
Solution
D
6. LO 7.1 Which of the following is false about accounting information systems?
A. They provide reports that people analyze.
B. They prevent errors and stop employees from stealing inventory.
C. They are designed to gather data about the company’s transactions.
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,OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
D. They consist of processes that involve input of data from source documents, processing,
output, and storage.
Solution
B
7. LO 7.2 An unhappy customer just returned $50 of the items he purchased yesterday when he
charged the goods to the company’s store credit card. Which special journal would the company
use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
E
8. LO 7.2 A customer just charged $150 of merchandise on the company’s own charge card.
Which special journal would the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
A
9. LO 7.2 A customer just charged $150 of merchandise using MasterCard. Which special
journal would the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
10. LO 7.2 The company just took a physical count of inventory and found $75 worth of
inventory was unaccounted for. It was either stolen or damaged. Which journal would the
company use to record the correction of the error in inventory?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
E
11. LO 7.2 Your company paid rent of $1,000 for the month with check number 1245. Which
journal would the company use to record this?
A. sales journal
B. purchases journal
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,OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
D
12. LO 7.2 On January 1, Incredible Infants sold goods to Babies Inc. for $1,540, terms 30 days,
and received payment on January 18. Which journal would the company use to record this
transaction on the 18th?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
13. LO 7.2 Received a check for $72 from a customer, Mr. White. Mr. White owed you $124.
Which journal would the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
14. LO 7.2 You returned damaged goods you had previously purchased from C.C. Rogers Inc.
and received a credit memo for $250. Which journal would your company use to record this
transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
E
15. LO 7.2 Sold goods for $650 cash. Which journal would the company use to record this
transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
16. LO 7.2 Sandren & Co. purchased inventory on credit from Acto Supply Co. for $4,000.
Sandren & Co. would record this transaction in the ________.
A. general journal
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, OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
B. cash receipts journal
C. cash disbursements journal
D. purchases journal
E. sales journal
Solution
D
17. LO 7.3 Sold goods for $650, credit terms net 30 days. Which journal would the company use
to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
A
18. LO 7.3 You returned damaged goods to C.C. Rogers Inc. and received a credit memo for
$250. Which journal(s) would the company use to record this transaction?
A. sales journal only
B. purchases journal and the accounts payable subsidiary ledger
C. cash receipts journal and the accounts receivable subsidiary ledger
D. cash disbursements journal and the accounts payable subsidiary ledger
E. general journal and the accounts payable subsidiary ledger
Solution
E
19. LO 7.3 The sum of all the accounts in the accounts receivable subsidiary ledger should
________.
A. equal the accounts receivable account balance in the general ledger before posting any
amounts
B. equal the accounts payable account balance in the general ledger before posting any
amounts
C. equal the accounts receivable account balance in the general ledger after posting all
amounts
D. equal the cash account balance in the general ledger after posting all amounts
Solution
C
20. LO 7.3 AB Inc. purchased inventory on account from YZ Inc. The amount was $500. AB
Inc. uses an accounting information system with special journals. Which special journal would
the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
B
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Chapter 7: Accounting Information Systems
Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
Multiple Choice
1. LO 7.1 So far, computer systems cannot yet ________.
A. receive data and instructions from input devices such as a scanner.
B. decide how to record a business transaction.
C. communicate with other computers electronically.
D. recognize that you made a mistake entering $100 when you meant to enter $101.
Solution
D
2. LO 7.1 Any device used to provide the results of processing data is a(n) ________ device.
A. sources
B. input
C. output
D. storage
Solution
C
3. LO 7.1 Source documents ________.
A. are input devices
B. are output devices
C. do not have to be on paper
D. cannot be electronic files
Solution
C
4. LO 7.1 All of the following can provide source data except ________.
A. a scanning device at the grocery store
B. a utility bill received in the mail
C. a bar code reader
D. software to process the source data
Solution
D
5. LO 7.1 A document that asks you to return an identifying part of it with your payment is a(n)
________.
A. source document
B. cloud document
C. point-of-sale document
D. turn-around document
Solution
D
6. LO 7.1 Which of the following is false about accounting information systems?
A. They provide reports that people analyze.
B. They prevent errors and stop employees from stealing inventory.
C. They are designed to gather data about the company’s transactions.
Page 1 of 61
,OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
D. They consist of processes that involve input of data from source documents, processing,
output, and storage.
Solution
B
7. LO 7.2 An unhappy customer just returned $50 of the items he purchased yesterday when he
charged the goods to the company’s store credit card. Which special journal would the company
use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
E
8. LO 7.2 A customer just charged $150 of merchandise on the company’s own charge card.
Which special journal would the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
A
9. LO 7.2 A customer just charged $150 of merchandise using MasterCard. Which special
journal would the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
10. LO 7.2 The company just took a physical count of inventory and found $75 worth of
inventory was unaccounted for. It was either stolen or damaged. Which journal would the
company use to record the correction of the error in inventory?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
E
11. LO 7.2 Your company paid rent of $1,000 for the month with check number 1245. Which
journal would the company use to record this?
A. sales journal
B. purchases journal
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,OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
D
12. LO 7.2 On January 1, Incredible Infants sold goods to Babies Inc. for $1,540, terms 30 days,
and received payment on January 18. Which journal would the company use to record this
transaction on the 18th?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
13. LO 7.2 Received a check for $72 from a customer, Mr. White. Mr. White owed you $124.
Which journal would the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
14. LO 7.2 You returned damaged goods you had previously purchased from C.C. Rogers Inc.
and received a credit memo for $250. Which journal would your company use to record this
transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
E
15. LO 7.2 Sold goods for $650 cash. Which journal would the company use to record this
transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
C
16. LO 7.2 Sandren & Co. purchased inventory on credit from Acto Supply Co. for $4,000.
Sandren & Co. would record this transaction in the ________.
A. general journal
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, OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 7: Accounting Information Systems
B. cash receipts journal
C. cash disbursements journal
D. purchases journal
E. sales journal
Solution
D
17. LO 7.3 Sold goods for $650, credit terms net 30 days. Which journal would the company use
to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
A
18. LO 7.3 You returned damaged goods to C.C. Rogers Inc. and received a credit memo for
$250. Which journal(s) would the company use to record this transaction?
A. sales journal only
B. purchases journal and the accounts payable subsidiary ledger
C. cash receipts journal and the accounts receivable subsidiary ledger
D. cash disbursements journal and the accounts payable subsidiary ledger
E. general journal and the accounts payable subsidiary ledger
Solution
E
19. LO 7.3 The sum of all the accounts in the accounts receivable subsidiary ledger should
________.
A. equal the accounts receivable account balance in the general ledger before posting any
amounts
B. equal the accounts payable account balance in the general ledger before posting any
amounts
C. equal the accounts receivable account balance in the general ledger after posting all
amounts
D. equal the cash account balance in the general ledger after posting all amounts
Solution
C
20. LO 7.3 AB Inc. purchased inventory on account from YZ Inc. The amount was $500. AB
Inc. uses an accounting information system with special journals. Which special journal would
the company use to record this transaction?
A. sales journal
B. purchases journal
C. cash receipts journal
D. cash disbursements journal
E. general journal
Solution
B
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