Chapter 7: Accounting Information SystemsChapter 7: Accounting Information SystemsChapter 7: Accounting Information SystemsChapter 7Accounting Information SystemsMATCHING1. Match the following terms with the descriptions below.A. AccountB. Accounting cycle C. Contra accountD. General journalE. General ledgerF. Master fileG. Permanent accountH. Post-closing trial balanceI. PostingJ. Transaction filesK. Trial balanceL. Journal Entry_____ 1. A journal in a computer-based transaction system._____ 2. An account with an opposite balance to the normal balance of its associated account._____ 3. A time period between financial statements._____ 4. The journal used to record both the account(s) to be debited and the accounts(s) to be credited._____ 5. A ledger in a computer-based transaction system._____ 6. A trial balance prepared after the closing entries have been posted._____ 7. A place where the results of events affecting that item are recorded._____ 8. A listing of all general ledger accounts and their respective balances to ensure that debits equal credits._____ 9. The process of recording the appropriate part of a journal entry to the affected account in the ledger._____10. A collection of specific asset, liability, and owners' equity accounts._____11. The recorded effect of an accounting event._____12. An asset, liability, or owners' equity account whose balance is carried over from year to year. Answer: 1. J 2. C 3. B 4. D 5. F 6. H 7. A 8. K 9. I 10. E 11. L 12. G Ainsworth/Deines, Introduction to Accounting: An Integrated Approach, 4/e118Chapter 7: Accounting Information Systems2. Match the following terms with the descriptions below.A. Adjusting entryB. Business eventC. Chart of accountsD. Closing entryE. Expense accrualF. Expense deferralG. Revenue accrual H. Revenue deferral_____ 1. An adjusting entry that occurs when a company uses previously purchased assets in an attempt to generate revenue in future periods._____ 2. An internal entry made to bring up to date the accounts for internal events prior to preparing financial statements._____ 3. An adjusting entry that occurs when a company has been paid in advance for services to be performed in a future period._____ 4. An event that management wants to plan and evaluate._____ 5. An organizational scheme used to classify accounts as assets, liabilities, or owners' equity._____ 6. An adjusting entry that occurs when expenses are incurred in one accounting period and payment is made in a later period._____ 7. An entry made to transfer the balance of temporary accounts to retained earnings and determine net income or loss for a time period. _____ 8. An adjusting entry that recognizes when a revenue is earned but the payment to the firms will occur in a subsequent accounting period. Answer: 1. F 2. A 3. H 4. B 5. C 6. E 7. D 8.G 3. The following is a list of the eight steps in the accounting cycle. Match the numbers 1 though 8 to the events below to indicate the sequence of the accounting cycle steps._____ A. Prepare and adjusted trial balance_____ B. Prepare financial statements_____ C. Identify, analyze, and record events in journal_____ D. Prepare post closing trial balance_____ E. Make closing entries in journal and post to ledger_____ F. Enter adjusting entries in journal and post to ledger_____ G. Post entries from journal to ledger_____ H. Prepare trial balance Answer: A. 5 B. 6 C. 1 D. 8 E. 7 F. 4 G. 2 H. 3 Ainsworth/Deines, Introduction to Accounting: An Integrated Approach, 4/e119Chapter 7: Accounting Information Systems4. Match the combination of changes in the accounting equation described below with the events listed below. A. Assets increase; Assets decreaseB. Assets increase; Liabilities increaseC. Assets increase; Owner's equity increaseD. Assets decrease; Liabilities decreaseE. Assets decrease; Owner's equity decreaseF. Liabilities increase; Liabilities decreaseG. Liabilities increase; Owners' equity decreasesH. Liabilities decrease; Owners' equity increasesI. Owners' equity increases; Owners' equity decreasesJ. Not recorded in accounting system_____ 1. Borrowed cash _____ 2. Purchased a truck by paying cash_____ 3. Major client goes out of business_____ 4. Paid dividend to owners_____ 5. Creditor takes stock in the company in exchange for retiring debt_____ 6. Paid note that came due_____ 7. Customer pays bill in cash_____ 8. Owner made contribution to firm Answer: 1. B 2. A 3. J 4. E 5. H 6. D 7. A 8. C 5. Match the combination of changes in the accounting equation described below with the events listed below. A. Assets increase; Assets decreaseB. Assets increase; Liabilities increaseC. Assets increase; Owner's equity increaseD. Assets decrease; Liabilities decreaseE. Assets decrease; Owner's equity decreaseF. Liabilities increase; Liabilities decreaseG. Liabilities increase; Owners' equity decreasesH. Liabilities decrease; Owners' equity increasesI. Owners' equity increases; Owners' equity decreasesJ. Not recorded in accounting systemAinsworth/Deines, Introduction to Accounting: An Integrated Approach, 4/e120Chapter 7: Accounting Information Systems_____ 1. Paid an accounts payable _____ 2. Purchased land by giving stock to the seller_____ 3. Owner withdraws cash for personal use_____ 4. Receive cash in advance for services that will be performed later_____ 5. Borrowed money from bank by signing a note payable_____ 6. Services promised in 4 above are performed_____ 7. Customer who owes firm money goes bankrupt _____ 8. Lose major customer to competitor_____ 9. Company signs a new 5-year note to replace 1-year note that came due_____10. Purchased inventory with cash Answer: 1.D 2.C 3.E 4.B 5.B 6.H 7.E 8.J 9.F 10.A 6. Indicate the normal balance of the following accountsA c c o u n t D e b i t C r e d i tA c c o u n t s R e c e i v a b l eA c c u m u l a t e d D e p r e c i a t i o nC a s hI n v e n t o r yN o t e s P a y a b l eR e n t E x p e n s eR e t a i n e d E a r n i n g sAnswer: A c c o u n t D e b i t C r e d i tA c c o u n t s R e c e i v a b l eA c c u m u l a t e d D e p r e c i a t i o nC a s hI n v e n t o r yN o t e s P a y a b l