Accounting System
PART A : TRUE OR FLASE 1. Businesses must implement controls to help guide the behavior of their employees toward business objectives.
2. The methods or procedures used to record and report financial data are called the accounting system.
3. Systems analysis is the final phase in the creation or revision of an accounting system.
4. Processing methods are the means by which the system collects, summarizes, and reports accounting information.
5. Accounting systems evolve through a three-step process: analysis, design and feedback.
6. An accounting system is the methods and procedures used to collect, classify, summarize, and report the businesses financial information
7. Most accounting systems evolve as the business grows and requires changes in their methods for collecting, accumulating, and reporting information.
8. Once an accounting system has been implemented, feedback will be used to continuously analyze and improve the system.
PART B The transactions completed by Franklin Company during January, its first month of operations, are listed below. Assume that Peach Company uses the following journals: Cash Receipts (CR), Cash Payments (CP), Revenue (R), Purchases (P), and General (G). Assume that it uses Accounts Receivable and Accounts Payable Subsidiary Ledgers as well as a General Ledger. Indicate by letters which journal would be used for each transaction. Also indicate if the entry requires a posting to a subsidiary ledger.
___ | (1) | Issued check for rent. | ___ | (2) | Purchased equipment on account. | ___ | (3) | Issued an invoice to a customer. | ___ | (4) | Received a check from a customer for payment on account. | ___ | (5) | Issued check for advertising expense. | ___ | (6) | Issued check for a payment on account. | ___ | (7) | Issued check for cash purchase of supplies. | ___ | (8) | Issued check for salary. | ___ | (9) | Received cash for a sale. | ___ |
2. The methods or procedures used to record and report financial data are called the accounting system.
3. Systems analysis is the final phase in the creation or revision of an accounting system.
4. Processing methods are the means by which the system collects, summarizes, and reports accounting information.
5. Accounting systems evolve through a three-step process: analysis, design and feedback.
6. An accounting system is the methods and procedures used to collect, classify, summarize, and report the businesses financial information
7. Most accounting systems evolve as the business grows and requires changes in their methods for collecting, accumulating, and reporting information.
8. Once an accounting system has been implemented, feedback will be used to continuously analyze and improve the system.
PART B The transactions completed by Franklin Company during January, its first month of operations, are listed below. Assume that Peach Company uses the following journals: Cash Receipts (CR), Cash Payments (CP), Revenue (R), Purchases (P), and General (G). Assume that it uses Accounts Receivable and Accounts Payable Subsidiary Ledgers as well as a General Ledger. Indicate by letters which journal would be used for each transaction. Also indicate if the entry requires a posting to a subsidiary ledger.
___ | (1) | Issued check for rent. | ___ | (2) | Purchased equipment on account. | ___ | (3) | Issued an invoice to a customer. | ___ | (4) | Received a check from a customer for payment on account. | ___ | (5) | Issued check for advertising expense. | ___ | (6) | Issued check for a payment on account. | ___ | (7) | Issued check for cash purchase of supplies. | ___ | (8) | Issued check for salary. | ___ | (9) | Received cash for a sale. | ___ |