Solved by verified expert :UOP Acct 211 Quiz 3 Spring 2014 (Graded)1.award:3 out of3.00 pointsAssume that a company using a purchases journal made an error in totaling the journal’s accounts payable column. The error should be discovered: When the purchases journal is posted to the general ledger. When the sum of the vendor accounts does not equal the balance in the Purchases journal. When the total of the schedule of accounts payable is compared with the balance of the Accounts Payable account. When the creditors receive their payments. When the financial statements are prepared.2.award:3 out of3.00 pointsA subsidiary ledger that contains a separate account for each supplier (creditor) to the company is a(n): Controlling account. Accounts receivable ledger. Accounts payable ledger. General ledger. Special journal.3.award:3 out of3.00 pointsSubsidiary ledgers do all of the following except: Remove excessive detail from the general ledger. Provide up-to-date information on customer or other specific account balances. Aid in error identification for individual accounts. Help with division of labor (recordkeeping tasks). Eliminate the need for individual postings to the customer or supplier accounts4.award:3 out of3.00 pointsThe sales journal is used for recording: Credit purchases. Credit sales. Cash sales. Cash purchases. Cash receipts.5.award:3 out of3.00 pointsA company received payment of $9,800 from a customer within the discount period. Identify the journal the transaction would be recorded in. Cash disbursements journal. Sales journal. Cash receipts journal. Purchases journal. General journal.6.award:3 out of3.00 pointsAll of the following statements regarding accounting information systems are true except: Accounting information systems collect and process data from transactions and events. Accounting information systems organize data in useful forms. Accounting information systems do not establish internal control procedures. Accounting information systems are crucial to effective decision making. Accounting information systems communicate information to business decision makers.7.award:3 out of3.00 pointsAssume that a company uses a sales journal, a purchases journal, a cash receipts journal, a cash disbursements journal, and a general journal. A sales return for credit on account would be recorded in the: Sales journal. General journal. Cash receipts journal. Accounts receivable ledger. Cash disbursements journal.8.award:3 out of3.00 pointsThe control principle for accounting information systems requires that the: Benefits from an activity outweigh the costs of the activity. System report useful, understandable, timely, and pertinent information for effective decision making. System must have internal controls. System adapts to changes in the company, business environment, and needs of decision makers. System conforms to a company’s activities, personnel, and structure.9.award:3 out of3.00 pointsAn accounts receivable ledger is: A subsidiary ledger that contains an account for each credit customer. A list of the balances of selected accounts in the accounts receivable ledger that is added to show the total amount of the significant accounts receivable outstanding. A book of original entry that is designed and used for recording only a specified type of transaction. The ledger that contains the financial statement accounts of a business. A subsidiary ledger that contains a separate account for each creditor (supplier) to the company.10.award:3 out of3.00 pointsInformation processors: Include information storage. Interpret, transform, and summarize information for use in analysis and reporting. Are components of an accounting system that keep data in accessible form. Are the means to take information out of an accounting system and make it available to users. Include scanners.11.award:3 out of3.00 pointsOutstanding checks refer to checks that have been: Written, recorded, sent to payees, and received and paid by the bank. Written and not yet recorded in the company books. Held as blank checks. Written, recorded on the company books, sent to the payee, but have not yet been paid by the bank. Issued by the bank.12.award:3 out of3.00 pointsAn expense resulting from failing to take advantage of cash discounts on purchases is called: Sales discounts. Trade discounts. Purchases discounts. Discounts lost. Discounts earned.13.award:3 out of3.00 pointsA remittance advice is: An explanation for a payment by check. A bank statement. A voucher. An EFT. A cancelled check.14.award:3 out of3.00 pointsOn a bank reconciliation, an unrecorded debit memorandum for printing checks is: Noted as a memorandum only. Added to the book balance of cash. Deducted from the book balance of cash. Added to the bank balance of cash. Deducted from the bank balance of cash.15.award:3 out of3.00 pointsWhich of the following events would cause a bank to debit a depositor’s account? The depositor authorizes the bank to charge the depositor’s account $50 for new checks. The bank collects a note receivable and related interest on the depositor’s behalf. The depositor determines there are outstanding checks drawn on the account at month-end. The depositor determines there are deposits in transit on the account at month-end. The bank determines it incorrectly charged the depositor’s account twice for the monthly service charge in a previous month.16.award:3 out of3.00 pointsThe impact of technology on internal controls includes: Reduced processing errors. Elimination of the need for regular audits. Elimination of the need to bond employees. Elimination of separation of duties. Elimination of fraud.17.award:3 out of3.00 pointsA company made a bank deposit on September 30 that did not appear on the bank statement dated as of September 30. In preparing the September 30 bank reconciliation, the company should: Deduct the deposit from the bank statement balance. Send the bank a debit memorandum. Deduct the deposit from the September 30 book balance and add it to the October 1 book balance. Add the deposit to the book balance of cash. Add the deposit to the bank statement balance.18.award:3 out of3.00 pointsManagers place a high priority on internal control systems for all of the reasons listed below except:rev: 11_18_2013_QC_40260 Prevention of avoidable losses. Planning of operations. Monitoring of company performance. Monitoring of employee performance. Assurance that no loss will occur.19.award:3 out of3.00 pointsInternal control systems are: Developed by the Securities and Exchange Commission for public companies. Developed by the Small Business Administration for non-public companies. Developed by the Internal Revenue Service for all U.S. companies. Required by Sarbanes-Oxley (SOX) to be documented and certified if the company’s stock is traded on an exchange. Required only if a company plans to engage in interstate commerce.20.award:3 out of3.00 pointsThe gross method of recording purchases refers to the method of recording: Purchases at the invoice price less any cash discounts. Specified amounts and timing of payments that a buyer agrees to make in return for being granted credit. Purchases at the full invoice price, without deducting any cash discounts. Inventory at its selling price. Inventory at the lower of cost or market.21.award:4 out of4.00 pointsFailure by a promissory notes’ maker to pay the amount due at maturity is known as: Protesting a note. Closing a note. Dishonoring a note. Discounting a note. Depreciating a note.22.award:4 out of4.00 pointsAll of the following statements regarding recognition of receivables under U.S. GAAP and IFRS are true except: U.S. GAAP and IFRS have similar asset criteria that apply to recognition of receivables. Receivables that arise from revenue-generating activities are subject to broadly similar criteria for U.S. GAAP and IFRS. The realization principle under IFRS implies an arm’s length transaction occurs. Both refer to the realization principle and an earnings process. Differences arise mainly from industry-specific guidance under U.S. GAAP23.award:4 out of4.00 pointsThe matching principle prescribes: That expenses be ignored if their effect on the financial statements is unimportant to users’ business decisions. The use of the direct write-off method for bad debts. The use of the allowance method of accounting for bad debts. That bad debts be disclosed in the financial statements. That bad debts not be written off.24.award:4 out of4.00 pointsThe quality of receivables refers to: The creditworthiness of sellers. The speed of collection. The likelihood of collection without loss. Sales turnover. The interest rate.25.award:4 out of4.00 pointsAll of the following are true regarding credit card expense except: Credit card expense may be classified as a “discount” deducted from sales to get net sales. Credit card expense may be classified as a selling expense. Credit card expense may be classified as an administrative expense. Credit card expense is not recorded by the seller. Credit card expense is a fee the seller pays for services provided by the card company26.award:4 out of4.00 pointsThe account receivable turnover measures: How long it takes to sell accounts receivable to a factor. How often, on average, receivables are received and collected during the period. The relation of cash sales to credit sales. How long it takes to sell merchandise inventory. All of the options are correct.27.award:4 out of4.00 pointsThe buyer who purchases and takes ownership of another company’s accounts receivable is called a: Payer. Pledger. Factor. Payee. Pledgee28.award:4 out of4.00 pointsUnder IFRS, the term provision: Refers to expense. Usually refers to a liability whose amount or timing is uncertain. Means establishing a provision for bad debts. Means establishing a contra-asset account. Means establishing an asset account.29.award:4 out of4.00 pointsThe person who signs a note receivable and promises to pay the principal and interest is the: Maker. Payee. Holder. Receiver. Owner.30.award:4 out of4.00 pointsAn accounting procedure that (1) estimates and reports bad debts expense from credit sales during the period the sales are recorded, and (2) reports accounts receivable at the estimated amount of cash to be collected is the: Allowance method of accounting for bad debts. Aging of notes receivable. Adjustment method for uncollectible debts. Direct write-off method of accounting for bad debts. Cash basis method of accounting for bad debts.
