Accounting System

Topics: Accounting software, Accounts receivable, Accounts payable Pages: 5 (879 words) Published: January 12, 2013

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.

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.|
___| (10)| Purchased supplies on account.|

PART C : multiple choice

1.In which journal would you find the recording of cash revenues? a.| Cash payments journal|
b.| General journal|
c.| Revenues journal|
d.| Cash receipts journal|

2.In which journal would the payment of salaries be posted? a.| Cash receipts journal|
b.| Special journal|
c.| Cash payments journal|
d.| Expense journal|

3.The total on the "Supplier balance summary report" at January 31 should equal a.| the sum of the accounts payable and notes payable controlling accounts totals at January 31| b.| the total of the purchases journal on January 31|

c.| the amount reported in the post-closing trial balance at January 31 for Accounts Payable| d.| the balance in Accounts Receivable at January 31|

4.Special journal entries are
a.| all posted at the end of the accounting period|
b.| posted either daily or monthly depending on the accounts used| c.| all posted daily|
d.| recorded in addition to the same information being recorded in a general journal|

5.If a company uses special journals
a.| it must have one for cash, receivables, and payables| b.| it may have no more than four|
c.| the quantity and design depend on the needs of the company| d.| no matter the quantity, the design must comply with the FASB requirements|

6.As a business grows or evolves it is necessary for the accounting system to a.| stay the same according to the consistency principle.| b.| completely change computerized accounting systems and simplify to a manual system.| c.| completely change all manual accounting systems to one that is computerized.| d.| adapt or modify to meet the specific needs of the business.|

7.Mocha Coffee Shop has asked the accountant to keep track of the purchases for beverage, food, and retail items. The accountant has implemented a purchases journal. Which of the...
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