CHAPTER 4 Completing the Accounting Cycle
CHAPTER y5
yACCOUNTING
ySYSTEMS
DISCUSSION yQUESTIONS
1. The y individual y accounts y receivable y ledger y accounts y provide y business y managers y with
y information y on ythe ystatus yof yindividual ycustomer yaccounts, ywhich yis ynecessary yfor ymanaging
ycollections. yManagers y need yto yknow ywhich ycustomers yowe ymoney, yhow ymuch ythey yowe,
yand yhow ylong ythe yamount yowed yhas y been youtstanding.
2. The ymajor yadvantages yof ythe yuse yof yspecial yjournals yare ysubstantial ysavings yin yrecord-
keeping yexpenses yand ya yreduction yof yrecord-keeping yerrors.
3. a. 400
b. None
4. a. 400
b. 1
5. a. Sometime yfollowing ythe yend yof ythe ycurrent ymonth, yone yof ytwo ythings ymay yhappen:
y(1) yan yoverdue ynotice ywill ybe yreceived yfrom yKelly yCo., yand/or y(2) ya yletter ywill ybe
yreceived yfrom y Kelley yCo., yinforming ythe ybuyer yof ythe yoverpayment. y(It yis yalso
ypossible ythat ythe yerror ywill ybe y discovered yat ythe ytime yof ymaking ypayment yif ythe
yoriginal yinvoice yis yinspected yat ythe ytime ythe ycheck yis ybeing ywritten.)
b. The yschedule yof yaccounts ypayable ywould ynot yagree ywith ythe ybalance yof ythe yaccounts
ypayable yaccount. yThe yerror ymight yalso ybe ydiscovered yat ythe ytime ythe yinvoice yis
ypaid.
c. The y creditor y will y call y the y attention y of y the y debtor y to y the y unpaid y balance y of y $800.
d. The yerror ywill ybecome yevident yduring ythe yverification yprocess yat ythe yend yof ythe
ymonth. yThe ytotal ydebits yin ythe ypurchases yjournal ywill ybe yless ythan ythe ytotal ycredits
yby y$3,600.
6. a. Purchases y journal d. Cash y payments y journal
b. Cash y payments y journal e. Cash y payments y journal
c. Purchases y journal
7. An yelectronic yform yis ya ysoftware ywindow ythat yprovides ythe yinputs yfor ya yparticular
ytransaction. yFor yexample, ya ycheck yform yprovides ythe yinputs y(payee, yamount, ydate) yfor ya
ycash ypayment ytransaction. y An yelectronic yinvoice yprovides ythe yinputs y(customer, yamount
ysold, yitem ysold) yfor yrecording y revenues yearned yon yaccount.
8. Transactions yare yposted ywhen ythey yare yentered yinto ythe ycomputerized ysystem. yThus,
ybalances yare yupdated ycontinuously yas ytransactions yoccur.
9. For yautomated ysystems ythat yuse yelectronic yforms, ythe yspecial yjournals yare ynot yused yto yrecord
yoriginal y transactions. yRather, yelectronic yforms ycapture ythe yoriginal ytransaction ydetail yfrom
yan yinvoice, yfor y example, y and y automatically y post y the y transaction y details y to y the
y appropriate y ledger y accounts.
10. E-commerce ycan ybe yused yby ya ybusiness yto yconduct ytransactions ydirectly ywith ycustomers.
yThus, yan y order ycan ybe yreceived ydirectly yfrom ythe ycustomer’s yInternet yinput, yand ycash ycan
ybe yreceived yfrom ythe y credit ycard. yMany ytimes, ythe ycash yis yreceived yprior yto yactually
yshipping ythe yproduct, yresulting yin ya y faster yrevenue/collection ycycle. yReducing ypaperwork
ythroughout ythe ycycle yalso yimproves ythe y efficiency yof ythe yprocess. yFor yexample, yall yof ythe
4-125
yaccounting ytransactions
© 2021 Cengage ycan
Learning, Inc. May bescanned,
notybe yfed ycopied
automatically y from
or duplicated, or ythe
posted to yinitial
a publicly yInternet-based
accessible inputs.
website, in wholeyor in part.
, 5-1
© y 2021 y Cengage y Learning, y Inc. y May y not y be y scanned, y copied y or y duplicated, y or y posted y to y a y publicly y accessible y website, y in y whole y or
y in y part.
,
, CHAPTER 5 Accounting Systems
PRACTICE yEXERCISES
PE y 5-
1A REVENUE y JOURNAL
Invoice Post. Accounts Rec. Dr.
Date No. Account Debited Ref. Fees Earned Cr.
Aug. 4 162 Oasis Enterprises Co. 320
15 163 City Electric Inc. 535
25 164 Juniper Co. 170
PE y 5- REVENUE y JOURNAL
1B
Invoice Post. Accounts yRec.
Date yNo. Account yDebited yRef yDr. yFees
. yEarned yCr.
Apr. 6 78 BlueBird y Co. 1,710
11 79 Hitchcock y Inc. 3,320
19 80 Fletcher y Inc. 550
PE y 5-2A
Feb. 22. Collected y cash y of y $200 y from y Central y Entertainment y (Invoice y No. y 422).
Amount y posted y from y Page y 106 y of y the y cash y receipts y journal.
27. Provided y $280 y of y services y on y account y to y Central y Entertainment,
itemized yon yInvoice yNo. y445. yAmount yposted yfrom yPage y92 yof ythe
yrevenue yjournal.
PE y 5-2B
Aug. 10. Provided y $890 y services y on y account y to y Eclypse y Products y Inc.,
y itemized yon yInvoice yNo. y119. yAmount yposted yfrom yPage y24 yof
ythe yrevenue yjournal.
17. Collected ycash yof y$720 yfrom yEclypse yProducts yInc. y(Invoice yNo.
y106). yAmount yposted yfrom yPage y46 yof ythe ycash yreceipts
yjournal.
5-2
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
CHAPTER y5
yACCOUNTING
ySYSTEMS
DISCUSSION yQUESTIONS
1. The y individual y accounts y receivable y ledger y accounts y provide y business y managers y with
y information y on ythe ystatus yof yindividual ycustomer yaccounts, ywhich yis ynecessary yfor ymanaging
ycollections. yManagers y need yto yknow ywhich ycustomers yowe ymoney, yhow ymuch ythey yowe,
yand yhow ylong ythe yamount yowed yhas y been youtstanding.
2. The ymajor yadvantages yof ythe yuse yof yspecial yjournals yare ysubstantial ysavings yin yrecord-
keeping yexpenses yand ya yreduction yof yrecord-keeping yerrors.
3. a. 400
b. None
4. a. 400
b. 1
5. a. Sometime yfollowing ythe yend yof ythe ycurrent ymonth, yone yof ytwo ythings ymay yhappen:
y(1) yan yoverdue ynotice ywill ybe yreceived yfrom yKelly yCo., yand/or y(2) ya yletter ywill ybe
yreceived yfrom y Kelley yCo., yinforming ythe ybuyer yof ythe yoverpayment. y(It yis yalso
ypossible ythat ythe yerror ywill ybe y discovered yat ythe ytime yof ymaking ypayment yif ythe
yoriginal yinvoice yis yinspected yat ythe ytime ythe ycheck yis ybeing ywritten.)
b. The yschedule yof yaccounts ypayable ywould ynot yagree ywith ythe ybalance yof ythe yaccounts
ypayable yaccount. yThe yerror ymight yalso ybe ydiscovered yat ythe ytime ythe yinvoice yis
ypaid.
c. The y creditor y will y call y the y attention y of y the y debtor y to y the y unpaid y balance y of y $800.
d. The yerror ywill ybecome yevident yduring ythe yverification yprocess yat ythe yend yof ythe
ymonth. yThe ytotal ydebits yin ythe ypurchases yjournal ywill ybe yless ythan ythe ytotal ycredits
yby y$3,600.
6. a. Purchases y journal d. Cash y payments y journal
b. Cash y payments y journal e. Cash y payments y journal
c. Purchases y journal
7. An yelectronic yform yis ya ysoftware ywindow ythat yprovides ythe yinputs yfor ya yparticular
ytransaction. yFor yexample, ya ycheck yform yprovides ythe yinputs y(payee, yamount, ydate) yfor ya
ycash ypayment ytransaction. y An yelectronic yinvoice yprovides ythe yinputs y(customer, yamount
ysold, yitem ysold) yfor yrecording y revenues yearned yon yaccount.
8. Transactions yare yposted ywhen ythey yare yentered yinto ythe ycomputerized ysystem. yThus,
ybalances yare yupdated ycontinuously yas ytransactions yoccur.
9. For yautomated ysystems ythat yuse yelectronic yforms, ythe yspecial yjournals yare ynot yused yto yrecord
yoriginal y transactions. yRather, yelectronic yforms ycapture ythe yoriginal ytransaction ydetail yfrom
yan yinvoice, yfor y example, y and y automatically y post y the y transaction y details y to y the
y appropriate y ledger y accounts.
10. E-commerce ycan ybe yused yby ya ybusiness yto yconduct ytransactions ydirectly ywith ycustomers.
yThus, yan y order ycan ybe yreceived ydirectly yfrom ythe ycustomer’s yInternet yinput, yand ycash ycan
ybe yreceived yfrom ythe y credit ycard. yMany ytimes, ythe ycash yis yreceived yprior yto yactually
yshipping ythe yproduct, yresulting yin ya y faster yrevenue/collection ycycle. yReducing ypaperwork
ythroughout ythe ycycle yalso yimproves ythe y efficiency yof ythe yprocess. yFor yexample, yall yof ythe
4-125
yaccounting ytransactions
© 2021 Cengage ycan
Learning, Inc. May bescanned,
notybe yfed ycopied
automatically y from
or duplicated, or ythe
posted to yinitial
a publicly yInternet-based
accessible inputs.
website, in wholeyor in part.
, 5-1
© y 2021 y Cengage y Learning, y Inc. y May y not y be y scanned, y copied y or y duplicated, y or y posted y to y a y publicly y accessible y website, y in y whole y or
y in y part.
,
, CHAPTER 5 Accounting Systems
PRACTICE yEXERCISES
PE y 5-
1A REVENUE y JOURNAL
Invoice Post. Accounts Rec. Dr.
Date No. Account Debited Ref. Fees Earned Cr.
Aug. 4 162 Oasis Enterprises Co. 320
15 163 City Electric Inc. 535
25 164 Juniper Co. 170
PE y 5- REVENUE y JOURNAL
1B
Invoice Post. Accounts yRec.
Date yNo. Account yDebited yRef yDr. yFees
. yEarned yCr.
Apr. 6 78 BlueBird y Co. 1,710
11 79 Hitchcock y Inc. 3,320
19 80 Fletcher y Inc. 550
PE y 5-2A
Feb. 22. Collected y cash y of y $200 y from y Central y Entertainment y (Invoice y No. y 422).
Amount y posted y from y Page y 106 y of y the y cash y receipts y journal.
27. Provided y $280 y of y services y on y account y to y Central y Entertainment,
itemized yon yInvoice yNo. y445. yAmount yposted yfrom yPage y92 yof ythe
yrevenue yjournal.
PE y 5-2B
Aug. 10. Provided y $890 y services y on y account y to y Eclypse y Products y Inc.,
y itemized yon yInvoice yNo. y119. yAmount yposted yfrom yPage y24 yof
ythe yrevenue yjournal.
17. Collected ycash yof y$720 yfrom yEclypse yProducts yInc. y(Invoice yNo.
y106). yAmount yposted yfrom yPage y46 yof ythe ycash yreceipts
yjournal.
5-2
© 2021 Cengage Learning, Inc. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
