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Exam 16: Reporting and Preparing Special Journals

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Question 1

Multiple Choice

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When a company uses special journals,the general journal is used for selected transactions and events including:

A) Recording adjusting transactions
B) Posting transactions to special journals
C) Accumulating debits and credits
D) Collecting detailed listings of amounts
E) Recording cash receipts

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Question 2

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A company entered into the following transactions. Match each transaction with the appropriate journal. The journals can be used one time, zero times or more than one time if necessary

Premises

Responses

Paid a utility bill for $3,400 cash

Cash Receipts Journal

Purchased $1,590 of store supplies on account

Cash Disbursements Journal

Purchased a display rack on account for $4,700

Sales Journal

Paid $65,000 cash for wages and salaries

Purchases Journal

Borrowed $5,000 cash from the bank

General Journal

Returned defective inventory purchased on account, $2,900

A customer returned a $250 item purchased on account

Purchased merchandise on account, $2,700

Recorded cash sales of $14,700

Recorded depreciation on store equipment of $4,000

Premises

Paid a utility bill for $3,400 cash

Purchased $1,590 of store supplies on account

Purchased a display rack on account for $4,700

Paid $65,000 cash for wages and salaries

Borrowed $5,000 cash from the bank

Returned defective inventory purchased on account, $2,900

A customer returned a $250 item purchased on account

Purchased merchandise on account, $2,700

Recorded cash sales of $14,700

Recorded depreciation on store equipment of $4,000

Responses

Cash Receipts Journal

Cash Disbursements Journal

Sales Journal

Purchases Journal

General Journal

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Correct Answer

Premises

Responses

Paid a utility bill for $3,400 cash

Purchased $1,590 of store supplies on account

Purchased a display rack on account for $4,700

Paid $65,000 cash for wages and salaries

Borrowed $5,000 cash from the bank

Returned defective inventory purchased on account, $2,900

A customer returned a $250 item purchased on account

Purchased merchandise on account, $2,700

Recorded cash sales of $14,700

Recorded depreciation on store equipment of $4,000

Premises

Paid a utility bill for $3,400 cash

Purchased $1,590 of store supplies on account

Purchased a display rack on account for $4,700

Paid $65,000 cash for wages and salaries

Borrowed $5,000 cash from the bank

Returned defective inventory purchased on account, $2,900

A customer returned a $250 item purchased on account

Purchased merchandise on account, $2,700

Recorded cash sales of $14,700

Recorded depreciation on store equipment of $4,000

Responses

Question 3

True/False

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Each transaction recorded in the sales journal yields a debit to Accounts Receivable and a credit to Sales.

If the total balance of the accounts receivable ledger equals the total of the controlling Accounts Receivable account,then the accounts are presumed to be correct.

 Computer hard drive 

Using __________________ ledgers removes unnecessary details from the general ledger.

The __________________ principle requires that an accounting information system must be able to adapt to changes in the company,business environment and needs of decision makers.

Accounting information systems are so accurate that decision makers in practice do not need a basic knowledge of how the systems work.

A customer who had purchased $75,000 worth of merchandise on account returns 5% of this order to the seller because he is not satisfied with the quality of the goods.This transaction would be recorded in which journal if historically the seller has had very few returns of this nature?

Enterprise resource planning software packages include the programs that manage a company's vital operations.

Input devices are the means to make accounting information available to users.

Auditors rely on accounting system databases when they audit financial statements and a company's controls.

Williams Company began business on May 1.They use the periodic inventory method.The following transactions involving purchases and cash disbursements occurred during the first week of May. $\begin{array}{|l|l|}\hline\text { May } 2 & \begin{array}{l}\text { Purchased } \$ 25,000 \text { of merchandise inventory on credit from the Sioux City Company, terms } \\2 / 10, n / 30 . \text { Invoice dated May } 1 .\end{array} \\\hline \text { May 3 } & \begin{array}{l}\text { Purchased } \$ 12,000 \text { of merchandise inventory on credit from the Wichita Company, terms } \\2 / 10, n / 30 . \text { Invoice dated May } 2 .\end{array} \\\hline \text { May 3 } & \text { Purchased } \$ 3,000 \text { of office supplies for cash from Bettendorf Co. Check no. } 1267 . \\\hline \text { May 4 } & \begin{array}{l}\text { Purchased } \$ 36,000 \text { of office equipment on credit from Office Outfitters, terms n/60. Invoice } \\\text { dated May 3. }\end{array} \\\hline \text { May 6 } & \begin{array}{l}\text { Paid the amount due for the merchandise purchased from Sioux City Company. Check no. } \\1268 .\end{array} \\\hline \text { May 6 } & \begin{array}{l}\text { Purchased } \$ 14,500 \text { of merchandise inventory for cash from the Davenport Co. Check no. } \\\text { 1269. }\end{array} \\\hline\end{array}$ a. Use the purchases journal and the cash disbursements journal to record these transactions b. Prepare a schedule of accounts payable as of May 7. There was no accounts payable on May 1.

Match each situation to the accounting information

Special journals are designed in a manner that is best suited for each business,so good systems design for a business could include collapsing the sales and cash receipts journal into one journal.

Enterprise-resource planning software:

The Sun Company completed the following sales and cash receipts transactions during the first week of December.The Sun Company uses the perpetual inventory system. SHAPE \* MERGEFORMAT a. Use the sales journal and the cash receipts journal to record these transactions b. Prepare a schedule of accounts receivable. There were no accounts receivable at December 1.

Under the perpetual inventory system,special journals are not required.

A company borrowed money from the bank and signed a long-term note payable.This transaction would be recorded in which of the following journals?

The general journal is used for transactions not covered by special journals and for regular,adjusting,closing and correcting entries.