SUA Packet (Exam 1) with Complete
Solutions
Accounting Process Steps: - ANSWER-1. Transactions Occur
2. Prepare Documents
3. Record in Journals
4. Post to Ledgers
5. Prepare Unadjusted Trial Balances
6. Prepare and Post Adjusting Entries
7. Prepare Adjusted Trial Balance
8. Prepare Financial Statements
9. Prepare Closing Entries
Three Most Common Transaction Cycles/Systems: - ANSWER-1. Sales and Cash
Receipts
2. Purchases and Cash Disbursements
3. Payroll
Payroll Time Card - ANSWER-Used to determine gross pay owed to employee
Customer Purchase Order (includes quantity ordered and agreed-upon price) -
ANSWER-Used to determine quantities to ship to customer and amount to bill
Sales Invoice (includes total amount of sale) - ANSWER-Provides information to
customer and for recording sales transactions
Monthly Bank Statement - ANSWER-Provides information to determine whether the
company or bank has errors or omissions in recording cash receipts and disbursements
Internally Prepared Documents: - ANSWER-Purchase order to buy inventory; Payroll
time card
Externally Prepared Documents: - ANSWER-Customer purchase order; Vendor's
invoice
Documents prepared BEFORE transaction occurs: - ANSWER-1. Issue order to buy
goods or services (Purchase Order)
2. Receive order for a sale of goods or services (Customer Purchase Order)
Documents prepared AT SAME TIME transaction occurs: - ANSWER-1. Receive goods
or services (Receiving report)
, 2. Deliver goods (Bill of lading/Shipping document)
Documents prepared AFTER transaction occurs: - ANSWER-1. Send bill for
goods/services sold (Sales invoice)
2. Receive bill for goods/services purchased (Vendor's invoice)
Special Journals - ANSWER-Summarize similar, repetitive types of transactions such
as, sales, cash receipts, and purchases
General Journal - ANSWER-Used for mostly non-repetitive transactions such as error
corrections, adjusting entries, and transactions not appropriate for any special journals
Sales Journal Transactions: - ANSWER-1. Sales or other revenue
2. Sales returns and allowances (may be recorded here or in separate journal)
Cash Receipts Journal Transactions: - ANSWER-1. All cash receipts
Purchases Journal Transactions: - ANSWER-1. All purchases of goods and services
except payroll
2. Purchases returns and allowances (may be recorded here or in separate journal)
Cash Disbursements Journal Transactions: - ANSWER-1. All cash disbursements made
by check except payroll
Payroll Journal Transactions: - ANSWER-1. All payroll disbursements (usually made by
check)
Accounts Receivable Aged Trial Balance - ANSWER-Listing of the ending balances in
the subsidiary A/R ledger at a specific point in time for individual accounts including the
customer number/name, balance due, and aging history
***Sales and Cash Receipts Cycle Transactions - 5 Authorizations/Initialing: -
ANSWER-1. Approval of credit before shipment takes place (Kramer signs customer
purchase order)
2. Shipment of goods (Ford signs Bill of Lading)
3. Determination of appropriate price to charge for goods, including terms and freight
(Adams signs sales invoice)
4. Approval of credits to accounts receivable for sales returns and allowances or write-
off of uncollectible accounts (Kramer signs credit memo)
5. Determining cash discounts allowed for customers' payments made before discount
date (Kramer signs credit memo)
Purchases and Cash Disbursements Cycle Subcycles: - ANSWER-1. Purchases
2. Cash Disbursements
3. Purchases Returns and Allowances
Solutions
Accounting Process Steps: - ANSWER-1. Transactions Occur
2. Prepare Documents
3. Record in Journals
4. Post to Ledgers
5. Prepare Unadjusted Trial Balances
6. Prepare and Post Adjusting Entries
7. Prepare Adjusted Trial Balance
8. Prepare Financial Statements
9. Prepare Closing Entries
Three Most Common Transaction Cycles/Systems: - ANSWER-1. Sales and Cash
Receipts
2. Purchases and Cash Disbursements
3. Payroll
Payroll Time Card - ANSWER-Used to determine gross pay owed to employee
Customer Purchase Order (includes quantity ordered and agreed-upon price) -
ANSWER-Used to determine quantities to ship to customer and amount to bill
Sales Invoice (includes total amount of sale) - ANSWER-Provides information to
customer and for recording sales transactions
Monthly Bank Statement - ANSWER-Provides information to determine whether the
company or bank has errors or omissions in recording cash receipts and disbursements
Internally Prepared Documents: - ANSWER-Purchase order to buy inventory; Payroll
time card
Externally Prepared Documents: - ANSWER-Customer purchase order; Vendor's
invoice
Documents prepared BEFORE transaction occurs: - ANSWER-1. Issue order to buy
goods or services (Purchase Order)
2. Receive order for a sale of goods or services (Customer Purchase Order)
Documents prepared AT SAME TIME transaction occurs: - ANSWER-1. Receive goods
or services (Receiving report)
, 2. Deliver goods (Bill of lading/Shipping document)
Documents prepared AFTER transaction occurs: - ANSWER-1. Send bill for
goods/services sold (Sales invoice)
2. Receive bill for goods/services purchased (Vendor's invoice)
Special Journals - ANSWER-Summarize similar, repetitive types of transactions such
as, sales, cash receipts, and purchases
General Journal - ANSWER-Used for mostly non-repetitive transactions such as error
corrections, adjusting entries, and transactions not appropriate for any special journals
Sales Journal Transactions: - ANSWER-1. Sales or other revenue
2. Sales returns and allowances (may be recorded here or in separate journal)
Cash Receipts Journal Transactions: - ANSWER-1. All cash receipts
Purchases Journal Transactions: - ANSWER-1. All purchases of goods and services
except payroll
2. Purchases returns and allowances (may be recorded here or in separate journal)
Cash Disbursements Journal Transactions: - ANSWER-1. All cash disbursements made
by check except payroll
Payroll Journal Transactions: - ANSWER-1. All payroll disbursements (usually made by
check)
Accounts Receivable Aged Trial Balance - ANSWER-Listing of the ending balances in
the subsidiary A/R ledger at a specific point in time for individual accounts including the
customer number/name, balance due, and aging history
***Sales and Cash Receipts Cycle Transactions - 5 Authorizations/Initialing: -
ANSWER-1. Approval of credit before shipment takes place (Kramer signs customer
purchase order)
2. Shipment of goods (Ford signs Bill of Lading)
3. Determination of appropriate price to charge for goods, including terms and freight
(Adams signs sales invoice)
4. Approval of credits to accounts receivable for sales returns and allowances or write-
off of uncollectible accounts (Kramer signs credit memo)
5. Determining cash discounts allowed for customers' payments made before discount
date (Kramer signs credit memo)
Purchases and Cash Disbursements Cycle Subcycles: - ANSWER-1. Purchases
2. Cash Disbursements
3. Purchases Returns and Allowances
