7/18/22, 9:29 PM Graded Exam #4

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ACC101_MH_V2 | Topic 14: Accounting Information Systems

Started on Saturday, July 9, 2022, 12:46 AM

State Finished
Completed on Saturday, July 9, 2022, 1:36 AM
Time taken 49 mins 50 secs
Grade 120.00 out of 125.00 (96%)

Question 1
Information processors are systems that:
Correct

5.00 points out Select one:

of 5.00
a. Keep data in an accessible form.
b. Summarize information for use in analysis and reporting.
c. Eliminate the need for professional judgment due to their accuracy.
d. Are the means to make information available to users.
e. Capture information from source documents.

Question 2
The control principle for accounting information systems requires that the:
Correct

5.00 points out

Select one:
of 5.00
a. Benefits from an activity outweigh the costs of the activity.
b. System report useful, understandable, timely, and pertinent information for
effective decision making.
c. System must have methods and procedures allowing managers to control
and monitor business activities.
d. System is able to adjust to changes in the company, business environment,
and needs of decision makers.
e. System conforms to a company's activities, personnel, and structure.

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Question 3
A company would use which of the following journals to record cash payments?
Incorrect

0.00 points out Select one:

of 5.00
a. General journal.
b. Cash receipts journal.
c. Cash payments journal.
d. Purchases journal.
e. Sales journal.

Question 4
Correct
All of the following statements regarding source documents are true except:

5.00 points out

Select one:
of 5.00
a. Source documents provide the information processed by an accounting
system.
b. Source documents include invoices, bank statements, and employee
earnings records.
c. Source documents should not be sent directly from a company's system to
its customers or suppliers.
d. Source documents need to be accurate.
e. Source documents can include billings to customers.

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Question 5
Which of the following accounting principles prescribes that an accounting
Correct
information system report useful, understandable, and timely information for
5.00 points out decision-making? 
of 5.00

Select one:
a. Control principle.
b. Compatibility principle.
c. Relevance principle.
d. Flexibility principle.
e. Cost-Benefit principle.

Question 6
Correct
Chandler Company purchased merchandise on credit from Lighting Supply for
$5,600. Chandler would record this purchase in the:
5.00 points out
of 5.00 Select one:
a. General journal.
b. Cash receipts journal.
c. Cash payments journal.
d. Purchases journal.
e. Sales journal.

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Question 7
Doughton Furniture Company sold merchandise on credit from Furniture Supply for
Correct
$8,000. Two days later Doughton returned $2,000 of the merchandise due to
5.00 points out damage. Doughton would record the return of merchandise in the:
of 5.00

Select one:
a. General journal.
b. Cash receipts journal.
c. Cash payments journal.
d. Purchases journal.
e. Accounts Payable controlling account.

Question 8

Correct
The accounting principle that prescribes an accounting information system
conform with a company's activities, personnel, and structure is the:
5.00 points out
of 5.00 Select one:
a. Control principle.
b. Compatibility principle.
c. Relevance principle.
d. Flexibility principle.
e. Cost-Benefit principle.

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Question 9
A journal that is used to record and post transactions of a similar type is a(n):
Correct

5.00 points out Select one:

of 5.00
a. Perpetual journal.
b. Columnar journal.
c. Special journal.
d. General journal.
e. All-purpose journal.

Question 10
Correct
When a company uses special journals, the general journal is used to record
selected transactions and events including:
5.00 points out
of 5.00
Select one:
a. Closing entries.
b. Sales on credit.
c. Cash payments.
d. Credit purchases.
e. Credit sales.

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Question 11
The main difference between the accounts receivable and accounts payable
Correct
subsidiary ledgers is: 
5.00 points out
of 5.00
Select one:
a. The accounts receivable ledger stores transaction data on customers
instead of suppliers.
b. The accounts payable transaction data is stored for customers instead of
suppliers.
c. The total of each subsidiary account in the subsidiary ledger equals the
controlling account.
d. Only the accounts receivable ledger uses a controlling account.
e. Only the accounts payable ledger uses a controlling account.

Question 12
Correct
Alani's Hawaiian had accounts payable of $4,500 and cost of goods sold of
$76,500. The days’ payable outstanding for Alani’s Hawaiian is: 
5.00 points out
of 5.00 Select one:
a. 17 days
b. 31.6 days
c. 21.5 days
d. 33.8 days
e. 25 days

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Question 13
When posting the sales journal's activity at the end of the month, the sales
Correct
column’s totals are:
5.00 points out
of 5.00
Select one:
a. Debited to Sales and credited to Accounts Receivable.
b. Debited to Accounts Receivable and credited to Cash.
c. Debited to Cash and credited to Accounts Receivable.
d. Debited to Accounts Receivable and credited to Sales.
e. Debited to Cash and credited to Sales.

Question 14
Interest expense is not:
Correct

5.00 points out

Select one:
of 5.00
a. Incurred on current liabilities.
b. Reported on the income statement.
c. A fixed expense.
d. Likely to fluctuate when sales change.
e. A factor in determining a company's borrowing risk.

Question 15
Correct
If the times interest earned ratio:

5.00 points out

Select one:
of 5.00
a. Increases, then risk increases.
b. Increases, then risk decreases.
c. Is greater than 1.5, the company is in default.
d. Is less than 1.5, the company is carrying too little debt.
e. Is greater than 3.0, the company is likely carrying too much debt.

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Question 16
Contingent liabilities must be recorded if:
Correct

5.00 points out Select one:

of 5.00
a. The future event is probable and the amount owed can be reasonably
estimated.
b. The future event is remote.
c. The future event is reasonably possible but not estimable.
d. The amount owed cannot be reasonably estimated.
e. The future event is probable but not estimable.

Question 17
Obligations to be paid within one year or the company's operating cycle, whichever
Correct
is longer, are:
5.00 points out
of 5.00
Select one:
a. Current assets.
b. Current liabilities.
c. Earned revenues.
d. Operating cycle liabilities.
e. Bills.

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Question 18
On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with
Correct
Central Savings Bank. What is the journal entry that should be recorded by Knack
5.00 points out upon maturity of the note? (Use 360 days a year.)
of 5.00

Select one:
a. Debit Interest Expense $625; credit Interest Payable $625.
b. Debit Notes Payable $50,000; credit Interest Revenue $625; credit Cash
$49,375.
c. Debit Cash $50,625; credit Notes Receivable $50,625.
d. Debit Notes Payable $50,625; credit Cash $50,625.
e. Debit Notes Payable $50,000; debit Interest Expense $625; credit Cash
$50,625.

Question 19
Correct
On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from
Indigo Company to extend the due date on an overdue account. What is the journal
5.00 points out entry that Indigo Company would make, when it records payment of the note on
of 5.00 the maturity date? (Use 360 days a year.)

Select one:
a. Debit Notes Payable $4,500; debit Interest Expense $75; credit Cash $4,575.

b. Debit Notes Payable $4,500; credit Interest Expense $75, credit Cash $4,425.
c. Debit Cash $4,575; credit Interest Revenue $75; credit Notes Payable $4,500.
d. Debit Notes Payable $4,500; debit Interest Expense $112; credit Cash
$4,612.
e. Debit Cash $4,575; credit Interest Revenue $75; credit Notes Receivable
$4,500.

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Question 20
All of the following are employer payroll taxes except:
Correct

5.00 points out

Select one:
of 5.00
a. Social Security tax equal to that withheld from employees.
b. Medicare tax equal to that withheld from employees.
c. State unemployment tax.
d. Federal unemployment tax.
e. Federal income tax equal to that withheld from employees.

Question 21
Correct
A company sold $12,000 worth of bicycles with an extended warranty. The
company’s experience is that warranty expense averages 2% of sales. The
5.00 points out company should:
of 5.00

Select one:
a. Consider the warranty expense a remote liability since the rate is only 2%.
b. Recognize warranty expense at the time the warranty work is performed.
c. Recognize warranty expense and liability in the year of the sale.
d. Consider the warranty expense a contingent liability.
e. Recognize warranty liability when the company purchases the bicycles.

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Question 22
An employee earned $100,000 working for an employer in the current year. The
Correct
current rate for FICA Social Security is 6.2% payable on earnings up to $128,400
5.00 points out maximum per year and the rate for FICA Medicare 1.45% of all earnings. The
of 5.00 employer’s total FICA payroll tax for this employee is:

Select one:
a. $7,650.
b. $9,830.
c. $879.
d. $8,950.
e. $0, since the FICA tax is only deducted from an employee’s pay.

Question 23
Recording employee payroll deductions may involve:
Correct

5.00 points out Select one:

of 5.00
a. Liabilities to the employer.
b. Liabilities to federal and state governments.
c. Expenses for state unemployment.
d. Expenses for the gross wages and salaries.
e. Expenses for the employer portion of any medical insurance.

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Question 24
During June, Vixen Company sells $850,000 in merchandise that has a one year
Correct
warranty. Experience shows that warranty expenses average about 3% of the
5.00 points out selling price. Customers returned $14,000 of merchandise for warranty
of 5.00 replacement during the month. The entry to settle the customer warranties is:

Select one:
a. Debit Warranty Expense $11,500; credit Estimated Warranty Liability
$11,500.
b. Debit Estimated Warranty Liability $25,500; credit Warranty Expense
$25,500.
c. Debit Warranty Expense $14,000; credit Estimated Warranty Liability
$14,000.
d. Debit Estimated Warranty Liability $11,500; credit Merchandise Inventory
$11,500.
e. Debit Estimated Warranty Liability $14,000; credit Merchandise Inventory
$14,000.

Question 25
Correct
If a company has advance subscription sales totaling $45,000 for the upcoming
year, when four quarterly journals will mailed to customers, the receipt of cash
5.00 points out would be journalized as:
of 5.00

Select one:
a. Debit Cash $45,000; credit Unearned Revenue $45,000.
b. Debit Unearned Revenue $45,000; credit Sales $45,000.
c. Debit Cash $45,000, credit Accounts Payable $45,000.
d. Debit Sales $45,000, credit Unearned Revenue $45,000.
e. Debit Prepaid Subscriptions $45,000, credit Sales $45,000.

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