Final Exam Study Guide

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Accounting 211
Study Guide for Final Exam
Chapters 7 – 12

Chapter 7:

1. Terminology

Accounting information system People, records, and methods that collect and process data from transactions and events, organize them in useful
forms, and communicate results to decision makers

Accounts payable ledger Subsidiary ledger listing individual creditor
(supplier) accounts
Accounts receivable ledger Subsidiary ledger listing individual customer
accounts.
Batch processing Accumulating source documents for a period of time and then processing them all at once such as once a day, week, or
month.
Cash disbursements journal Special journal normally used to record
all payments of cash; also called cash payments journal
Cash receipts journal Special journal normally used to record all receipts
of cash.
Check register Another name for a cash disbursements journal when
the journal has a column for check numbers.
Columnar journal Journal with more than one column
Compatibility principle Information system principle that prescribes an accounting system to conform with a company’s activities, personnel,
and structure.
Components of accounting systems Five basic components of accounting systems are source documents, input devices, information processors,
information storage, and output devices.
Computer network Linkage giving different users and different computers
access to common databases and programs
Control principle Information system principle that prescribes an accounting system to aid managers in controlling and monitoring business
activities
Controlling account General ledger account, the balance of which (after
posting) equals the sum of the balances in its related subsidiary ledger. Cost-benefit principle Information system principle that prescribes the benefits from an activity in an accounting system to outweigh the costs

of that activity
Enterprise resource planning (ERP) software Programs that manage a company’s vital operations, which range from order taking to production
to accounting
Flexibility principle Information system principle that prescribes an accounting system be able to adapt to changes in the company, its operations,
and needs of decision makers.
General journal All-purpose journal for recording the debits and credits
of transactions and events.
Information processor Component of an accounting system that interprets, transforms, and summarizes information for use in analysis and reporting. (p. 274)
Information storage Component of an accounting system that keeps
data in a form accessible to information processors
Input device Means of capturing information from source documents
that enables its transfer to information processors
Internal controls or Internal control system All policies and procedures used to protect assets, ensure reliable accounting, promote efficient
operations, and urge adherence to company policies
Online processing Approach to inputting data from source documents
as soon as the information is available
Output devices Means by which information is taken out of the accounting
system and made available for use
Purchases journal Journal normally used to record all purchases on
credit.
Relevance principle Information system principle prescribing that its
reports be useful, understandable, timely, and pertinent for decision making. Sales journal Journal normally used to record sales of goods on
Credit
Schedule of accounts payable List of the balances of all accounts in the accounts payable ledger and their totals. (p. 284)
Schedule of accounts receivable List of the balances of all accounts in
the accounts receivable ledger and their totals
Segment return on assets Segment operating income divided by segment
average (identifiable) assets for the period
Special journal Any journal used for recording and posting transactions
of a similar type
Subsidiary ledger List of...
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