Accounting 25th Edition Solution
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CHAPTER 5
ACCOUNTING SYSTEMS
5-1
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, DISCUSSION QUESTIONS
1. The individual accounts receivable ledger accounts provide business managers information on the
status of individual customer accounts, which is necessary for managing collections. Managers need
to know which customers owe money, how much they owe, and how long the amount owed has been
outstanding.
2. The major advantages of the use of special journals are substantial savings in record-keeping
expenses and a reduction of record-keeping errors.
3. a. 400
b. None
4. a. 400
b. 1
5. a. Sometime following the end of the current month, one of two things may happen: (1) an overdue
notice will be received from Kelly Co., and/or (2) a letter will be received from Kelley Co.,
informing the buyer of the overpayment. (It is also possible that the error will be discovered at the
time of making payment if the original invoice is inspected at the time the check is being written.)
b. The schedule of accounts payable would not agree with the balance of the accounts payable
account. The error might also be discovered at the time the invoice is paid.
c. The creditor will call the attention of the debtor to the unpaid balance of $800.
d. The error will become evident during the verification process at the end of the month. The total
debits in the purchases journal will be less than the total credits by $3,600.
6. a. Purchases journal d. Cash payments journal
b. Cash payments journal e. Cash payments journal
c. Purchases journal
7. An electronic form is a software window that provides the inputs for a particular transaction. For
example, a check form provides the inputs (payee, amount, date) for a cash payment transaction. An
electronic invoice provides the inputs (customer, amount sold, item sold) for recording revenues
earned on account.
8. The use of controlling accounts to verify the accuracy of subsidiary accounts is used in a manual
system. In a computerized system, it is assumed that the computer will accurately sum the individual
transactions in the subsidiary accounts in determining the aggregate balance.
9. For automated systems that use electronic forms, the special journals are not used to record original
transactions. Rather, electronic forms capture the original transaction detail from an invoice, for
example, and automatically post the transaction details to the appropriate ledger accounts.
10. E-commerce can be used by a business to conduct transactions directly with customers. Thus, an
order can be received directly from the customer’s Internet input and cash can be received from the
credit card. Many times, the cash is received prior to actually shipping the product, resulting in a
faster revenue/collection cycle. Reducing paperwork throughout the cycle also improves the
efficiency of the process. For example, all of the accounting transactions can be fed automatically
from the initial Internet-based inputs.
5-2
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 5 Accounting Systems
PRACTICE EXERCISES
PE 5–1A
REVENUE JOURNAL
Invoice Post. Accounts Rec. Dr.
Date No. Account Debited Ref. Fees Earned Cr.
Nov. 7 121 Drew Co. 290
17 122 Triple A Inc. 470
23 123 Whaley Co. 610
PE 5–1B
REVENUE JOURNAL
Invoice Post. Accounts Rec. Dr.
Date No. Account Debited Ref. Fees Earned Cr.
Apr. 6 78 Lemon Co. 1,240
11 79 Hitchcock Inc. 2,570
19 80 Fletcher Inc. 990
PE 5–2A
May 20. Collected cash of $100 from Matrix Communications Inc. (Invoice No. 527).
Amount posted from page 106 of the cash receipts journal.
27. Provided $90 of services on account to Matrix Communications Inc.,
itemized on Invoice No. 579. Amount posted from page 92 of the revenue
journal.
PE 5–2B
Aug. 10. Provided $750 services on account to Moravian Products Inc., itemized
on Invoice No. 119. Amount posted from page 24 of the revenue journal.
17. Collected cash of $610 from Moravian Products Inc. (Invoice No. 106).
Amount posted from page 46 of the cash receipts journal.
5-3
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 5 Accounting Systems
PE 5–3A
PURCHASES JOURNAL
Accounts Party Other
Post. Payable Supplies Accounts Post.
Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount
Feb. 11 Celebration Supplies Inc. 440 440
14 Fun 4 All Supplies Inc. 290 290
27 Office Space Inc. 2,350 Office Furniture 2,350
PE 5–3B
PURCHASES JOURNAL
Accounts Office Other
Post. Payable Supplies Accounts Post.
Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount
Nov. 6 Carry Out Supply Inc. 330 330
14 Zell Computer Inc. 1,950 Office Equipment 1,950
22 Carry Out Supply Inc. 195 195
5-3
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
(Download complete and 100% accurate work written as per requirements)
Topic: _________________
Student Name: __________
Course Title: ____________
Instructor: ______________
Date of submission: _______
For any problem feel free to message me on “Stuvia”
Complete Answer (Next Page)
CHAPTER 5
ACCOUNTING SYSTEMS
5-1
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, DISCUSSION QUESTIONS
1. The individual accounts receivable ledger accounts provide business managers information on the
status of individual customer accounts, which is necessary for managing collections. Managers need
to know which customers owe money, how much they owe, and how long the amount owed has been
outstanding.
2. The major advantages of the use of special journals are substantial savings in record-keeping
expenses and a reduction of record-keeping errors.
3. a. 400
b. None
4. a. 400
b. 1
5. a. Sometime following the end of the current month, one of two things may happen: (1) an overdue
notice will be received from Kelly Co., and/or (2) a letter will be received from Kelley Co.,
informing the buyer of the overpayment. (It is also possible that the error will be discovered at the
time of making payment if the original invoice is inspected at the time the check is being written.)
b. The schedule of accounts payable would not agree with the balance of the accounts payable
account. The error might also be discovered at the time the invoice is paid.
c. The creditor will call the attention of the debtor to the unpaid balance of $800.
d. The error will become evident during the verification process at the end of the month. The total
debits in the purchases journal will be less than the total credits by $3,600.
6. a. Purchases journal d. Cash payments journal
b. Cash payments journal e. Cash payments journal
c. Purchases journal
7. An electronic form is a software window that provides the inputs for a particular transaction. For
example, a check form provides the inputs (payee, amount, date) for a cash payment transaction. An
electronic invoice provides the inputs (customer, amount sold, item sold) for recording revenues
earned on account.
8. The use of controlling accounts to verify the accuracy of subsidiary accounts is used in a manual
system. In a computerized system, it is assumed that the computer will accurately sum the individual
transactions in the subsidiary accounts in determining the aggregate balance.
9. For automated systems that use electronic forms, the special journals are not used to record original
transactions. Rather, electronic forms capture the original transaction detail from an invoice, for
example, and automatically post the transaction details to the appropriate ledger accounts.
10. E-commerce can be used by a business to conduct transactions directly with customers. Thus, an
order can be received directly from the customer’s Internet input and cash can be received from the
credit card. Many times, the cash is received prior to actually shipping the product, resulting in a
faster revenue/collection cycle. Reducing paperwork throughout the cycle also improves the
efficiency of the process. For example, all of the accounting transactions can be fed automatically
from the initial Internet-based inputs.
5-2
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 5 Accounting Systems
PRACTICE EXERCISES
PE 5–1A
REVENUE JOURNAL
Invoice Post. Accounts Rec. Dr.
Date No. Account Debited Ref. Fees Earned Cr.
Nov. 7 121 Drew Co. 290
17 122 Triple A Inc. 470
23 123 Whaley Co. 610
PE 5–1B
REVENUE JOURNAL
Invoice Post. Accounts Rec. Dr.
Date No. Account Debited Ref. Fees Earned Cr.
Apr. 6 78 Lemon Co. 1,240
11 79 Hitchcock Inc. 2,570
19 80 Fletcher Inc. 990
PE 5–2A
May 20. Collected cash of $100 from Matrix Communications Inc. (Invoice No. 527).
Amount posted from page 106 of the cash receipts journal.
27. Provided $90 of services on account to Matrix Communications Inc.,
itemized on Invoice No. 579. Amount posted from page 92 of the revenue
journal.
PE 5–2B
Aug. 10. Provided $750 services on account to Moravian Products Inc., itemized
on Invoice No. 119. Amount posted from page 24 of the revenue journal.
17. Collected cash of $610 from Moravian Products Inc. (Invoice No. 106).
Amount posted from page 46 of the cash receipts journal.
5-3
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, CHAPTER 5 Accounting Systems
PE 5–3A
PURCHASES JOURNAL
Accounts Party Other
Post. Payable Supplies Accounts Post.
Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount
Feb. 11 Celebration Supplies Inc. 440 440
14 Fun 4 All Supplies Inc. 290 290
27 Office Space Inc. 2,350 Office Furniture 2,350
PE 5–3B
PURCHASES JOURNAL
Accounts Office Other
Post. Payable Supplies Accounts Post.
Date Account Credited Ref. Cr. Dr. Dr. Ref. Amount
Nov. 6 Carry Out Supply Inc. 330 330
14 Zell Computer Inc. 1,950 Office Equipment 1,950
22 Carry Out Supply Inc. 195 195
5-3
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
