Chapter 7: Accounting Information Systems

CHAPTER 7 — PRACTICE WORKSHEET

Accounting Information Systems · work it on paper, then check yourself

Try every exercise on paper BEFORE you check the answers. The attempt is where it sticks.

The exercises

1. Exercise 1 — Which journal? (part 1)

Maplewood Distributors uses a sales journal, cash receipts journal, purchases journal, cash payments journal, and a general journal. Choose the journal for each transaction.

a
Sold merchandise to a customer ON ACCOUNT.
a) Sales journal b) Cash receipts journal c) Purchases journal d) General journal
b
Received cash from a customer paying an account.
a) Sales journal b) Cash receipts journal c) Cash payments journal d) General journal
c
Purchased merchandise ON ACCOUNT.
a) Sales journal b) Purchases journal c) Cash payments journal d) General journal
d
Paid a supplier the amount owed.
a) Purchases journal b) Cash receipts journal c) Cash payments journal d) General journal

2. Exercise 2 — Which journal? (part 2)

Continue choosing the correct journal.

a
Sold merchandise for CASH.
a) Sales journal b) Cash receipts journal c) General journal d) Purchases journal
b
Purchased equipment ON ACCOUNT.
a) Purchases journal b) Cash payments journal c) General journal d) Sales journal
c
A customer returned merchandise bought on account.
a) Sales journal b) General journal c) Cash receipts journal d) Purchases journal
d
The owner invested additional cash in the business.
a) General journal b) Cash receipts journal c) Sales journal d) Cash payments journal
e
Recorded depreciation at month-end.
a) Cash payments journal b) General journal c) Purchases journal d) Cash receipts journal

3. Exercise 3 — Accounts Receivable control balance

Maplewood Distributors began March with a $0 Accounts Receivable balance. Its sales journal total for March was $18,000 (all credit sales) and its cash receipts journal collected $10,000 from customers on account.

a
Accounts Receivable control balance at March 31

4. Exercise 4 — Prove accounts receivable

Maplewood's receivable subsidiary ledger at March 31: Aspen Co. was billed $4,000 and $3,000 and paid $4,000; Birch Co. was billed $6,000 and paid $6,000; Cedar Co. was billed $5,000 and paid nothing.

a
Aspen Co. balance
b
Birch Co. balance
c
Cedar Co. balance
d
Total of the schedule (must equal the control account)

5. Exercise 5 — Accounts Payable control balance

Maplewood began March with a $0 Accounts Payable balance. Its purchases journal total for March was $16,000 (all credit merchandise purchases) and its cash payments journal paid $9,000 to suppliers on account.

a
Accounts Payable control balance at March 31

6. Exercise 6 — Prove accounts payable

Maplewood's payable subsidiary ledger at March 31: Northwind was billed $7,000 and paid $7,000; Summit was billed $5,000 and paid $2,000; Vale was billed $4,000 and paid nothing.

a
Northwind balance
b
Summit balance
c
Vale balance
d
Total of the schedule (must equal the control account)

7. Exercise 7 — Posting the sales journal

Maplewood's sales journal for March lists four credit sales: $4,000, $6,000, $5,000, and $3,000.

a
Sales journal column total
b
How is that total posted at month-end?
a) Debit Accounts Receivable, credit Sales Revenue b) Debit Cash, credit Sales Revenue c) Debit Sales Revenue, credit Accounts Receivable d) It is not posted
c
How are the four individual amounts handled?
a) Posted monthly as one total b) Posted daily to each customer's subsidiary account c) Never posted d) Posted to Cash

8. Exercise 8 — The cost side (perpetual)

Under a perpetual system, Maplewood's four March credit sales had costs of $2,600, $3,900, $3,250, and $1,950.

a
Total cost of goods sold for the sales journal
b
How is that cost total posted at month-end?
a) Debit Inventory, credit Cost of Goods Sold b) Debit Cost of Goods Sold, credit Inventory c) Debit Accounts Receivable, credit Inventory d) It is not posted

9. Exercise 9 — Cash receipts journal columns

Maplewood's cash receipts journal for one week: (1) cash sale $9,000; (2) collected $5,000 from a customer, allowing a $100 sales discount (cash received $4,900); (3) owner invested $8,000 cash.

a
Cash (debit) column total
b
Sales Discounts (debit) column total
c
Accounts Receivable (credit) column total
d
Sales Revenue (credit) column total
e
Other Accounts (credit) column total

10. Exercise 10 — Cash payments journal columns

Maplewood's cash payments journal for one week: (1) paid a $6,000 account, taking a $120 purchase discount (cash paid $5,880); (2) paid rent $2,000; (3) owner withdrew $1,500 cash.

a
Cash (credit) column total
b
Inventory (credit) column total — purchase discount taken
c
Accounts Payable (debit) column total
d
Other Accounts (debit) column total

11. Exercise 11 — Posting timing

Identify when and where each item is posted.

a
A special-journal COLUMN TOTAL is posted:
a) Daily to a customer account b) Monthly to the general ledger c) Never d) Only at year-end
b
An individual amount in the Accounts Payable column is posted:
a) Daily to the supplier's subsidiary account b) Monthly as a total only c) To Cash d) To Sales Revenue
c
An amount in an 'Other Accounts' column is posted:
a) As a column total b) Individually to its own general-ledger account c) Not at all d) To Accounts Receivable

12. Exercise 12 — A different company's receivables

Riverside Trading began March with an Accounts Receivable control balance of $12,000. During March it made $40,000 of credit sales and collected $34,000 from customers on account.

a
Accounts Receivable control balance at March 31

13. Exercise 13 — A different company's payables

Riverside Trading began March with an Accounts Payable control balance of $9,000. During March its purchases journal total was $25,000 and it paid $21,000 to suppliers on account.

a
Accounts Payable control balance at March 31

14. Exercise 14 — Locate the error

At month-end, Cliffside Co.'s Accounts Receivable control account shows $30,000, but the schedule of accounts receivable totals $30,900. A $900 collection was posted to the control account but never posted to the customer's subsidiary account.

a
What does the disagreement tell you?
a) The control account is always right, so ignore it b) There is a posting error to find and fix c) The company is insolvent d) Nothing — they never have to match
b
Corrected schedule total after posting the $900 collection to the customer

15. Exercise 15 — General-journal transactions

Decide which of these belong in the GENERAL journal.

a
Granted a customer a $400 sales allowance on account.
a) General journal b) Sales journal c) Cash receipts journal d) Purchases journal
b
Returned $600 of merchandise to a supplier, reducing the account owed.
a) Purchases journal b) Cash payments journal c) General journal d) Sales journal
c
Recorded the month-end closing entries.
a) Cash payments journal b) General journal c) Sales journal d) Purchases journal

16. Exercise 16 — Comprehensive proof

Harborview Supply's payable subsidiary ledger at April 30: Orion owes $5,500; Polaris owes $0; Quasar owes $8,200; Rigel owes $1,300. The Accounts Payable control account shows $15,000.

a
Total of the schedule of accounts payable
b
Do the records prove?
a) Yes — the schedule total equals the control account b) No — they can never match c) Only if cash is zero d) Cannot tell

Answers

Part of the free Accounting 1 course — Chapter 7: Accounting Information Systems

ANSWERS — do not read these until you have finished

1. Exercise 1 — Which journal? (part 1)

a
Sales journal
Credit sales of merchandise go in the sales journal.
b
Cash receipts journal
All cash received goes in the cash receipts journal.
c
Purchases journal
Credit purchases of merchandise go in the purchases journal.
d
Cash payments journal
All cash paid goes in the cash payments journal.

Solution: Sales journal; cash receipts journal; purchases journal; cash payments journal.

2. Exercise 2 — Which journal? (part 2)

a
Cash receipts journal
Cash sales go in the cash receipts journal, not the sales journal.
b
General journal
A single-column purchases journal records only merchandise; equipment on account goes in the general journal.
c
General journal
Sales returns go in the general journal (and post to the customer's subsidiary account).
d
Cash receipts journal
Cash coming in — even an owner investment — is recorded in the cash receipts journal (Other Accounts column).
e
General journal
Adjusting entries go in the general journal.

Solution: Cash receipts; general journal; general journal; cash receipts (Other Accounts); general journal.

3. Exercise 3 — Accounts Receivable control balance

a
8,000
0 + 18,000 credit sales − 10,000 collections = 8,000.

Solution: 0 + 18,000 − 10,000 = 8,000.

4. Exercise 4 — Prove accounts receivable

a
3,000
4,000 + 3,000 − 4,000 = 3,000.
b
0
6,000 − 6,000 = 0.
c
5,000
5,000 − 0 = 5,000.
d
8,000
3,000 + 0 + 5,000 = 8,000, which equals the Accounts Receivable control balance.

Solution: Aspen 3,000 + Birch 0 + Cedar 5,000 = 8,000 = control balance.

5. Exercise 5 — Accounts Payable control balance

a
7,000
0 + 16,000 purchases − 9,000 payments = 7,000.

Solution: 0 + 16,000 − 9,000 = 7,000.

6. Exercise 6 — Prove accounts payable

a
0
7,000 − 7,000 = 0.
b
3,000
5,000 − 2,000 = 3,000.
c
4,000
4,000 − 0 = 4,000.
d
7,000
0 + 3,000 + 4,000 = 7,000, which equals the Accounts Payable control balance.

Solution: Northwind 0 + Summit 3,000 + Vale 4,000 = 7,000 = control balance.

7. Exercise 7 — Posting the sales journal

a
18,000
4,000 + 6,000 + 5,000 + 3,000 = 18,000.
b
Debit Accounts Receivable, credit Sales Revenue
The sales journal total posts as a debit to Accounts Receivable and a credit to Sales Revenue.
c
Posted daily to each customer's subsidiary account
Individual amounts post daily to the customers' receivable subsidiary accounts.

Solution: Total 18,000 → Dr Accounts Receivable / Cr Sales Revenue (monthly); individual amounts post daily to each customer.

8. Exercise 8 — The cost side (perpetual)

a
11,700
2,600 + 3,900 + 3,250 + 1,950 = 11,700.
b
Debit Cost of Goods Sold, credit Inventory
The cost total posts as a debit to Cost of Goods Sold and a credit to Inventory.

Solution: Cost total 11,700 → Dr Cost of Goods Sold / Cr Inventory.

9. Exercise 9 — Cash receipts journal columns

a
21,900
9,000 + 4,900 + 8,000 = 21,900.
b
100
Only the $100 discount on the collection.
c
5,000
The $5,000 account collected (the customer's full balance).
d
9,000
Only the $9,000 cash sale.
e
8,000
The $8,000 owner investment (posted individually to Owner's Capital).

Solution: Cash 21,900 & Sales Discounts 100 (debits 22,000) = AR 5,000 + Sales 9,000 + Other 8,000 (credits 22,000). Debits = credits.

10. Exercise 10 — Cash payments journal columns

a
9,380
5,880 + 2,000 + 1,500 = 9,380.
b
120
The $120 discount reduces inventory cost.
c
6,000
The $6,000 supplier account paid.
d
3,500
Rent 2,000 + owner withdrawal 1,500 = 3,500 (each posted individually).

Solution: AP 6,000 + Other 3,500 (debits 9,500) = Cash 9,380 + Inventory 120 (credits 9,500). Debits = credits.

11. Exercise 11 — Posting timing

a
Monthly to the general ledger
Column totals post monthly to the general ledger control and summary accounts.
b
Daily to the supplier's subsidiary account
Individual payable amounts post daily to each supplier's subsidiary account.
c
Individually to its own general-ledger account
Other Accounts amounts have no common account, so each is posted individually.

Solution: Totals → monthly to GL; AR/AP individual amounts → daily to subsidiary; Other Accounts → individually.

12. Exercise 12 — A different company's receivables

a
18,000
12,000 + 40,000 − 34,000 = 18,000.

Solution: 12,000 + 40,000 − 34,000 = 18,000.

13. Exercise 13 — A different company's payables

a
13,000
9,000 + 25,000 − 21,000 = 13,000.

Solution: 9,000 + 25,000 − 21,000 = 13,000.

14. Exercise 14 — Locate the error

a
There is a posting error to find and fix
The control and subsidiary totals must agree; a difference signals a posting error.
b
30,000
30,900 − 900 = 30,000, which now equals the control account.

Solution: Post the missing $900 collection to the customer; the schedule falls to 30,000 and matches the control.

15. Exercise 15 — General-journal transactions

a
General journal
Sales returns and allowances go in the general journal (and post to the customer's subsidiary account).
b
General journal
Purchase returns go in the general journal (and post to the supplier's subsidiary account).
c
General journal
Closing entries go in the general journal.

Solution: All three are general-journal transactions; the two returns also post to the relevant subsidiary account.

16. Exercise 16 — Comprehensive proof

a
15,000
5,500 + 0 + 8,200 + 1,300 = 15,000.
b
Yes — the schedule total equals the control account
The $15,000 schedule total equals the $15,000 control balance, so the payables are proved.

Solution: Schedule 5,500 + 0 + 8,200 + 1,300 = 15,000 = control balance → proved.

optionflowtracker.com/learn/accounting-1/chapter-7/worksheet — free practice exercises, quizzes, mock exams and a quiz generator.