Ch3 Flashcards
What is the total amount for credit sales mentioned?
$100.00
This total includes sales tax of $17.50.
What are two examples of account identifiers mentioned?
- Bank account numbers
- Bank sort codes
Which processing method is faster, batch processing or transaction processing?
Batch processing
What are the advantages of using packages for data processing?
- Non-specialists can use them
- Large amounts of data can be processed quickly
- More accurate
- Data can be rapidly analyzed into useful formats
What are some challenges associated with system implementation?
- Initial time and cost of installation
- Need for security
- Need for a system of coding
- Lack of audit trail
- Resistance of staff to use it
What does one entry in a ledger do?
Updates the others
What type of data is automatically extracted for specific reports?
Transaction data
What method is used to credit payments against specific invoices?
Invoice-based crediting
What is the purpose of balancing ledger accounts?
To ensure accuracy in financial reporting
What does a trial balance help to identify?
Errors in bookkeeping
What is the content of a statement of financial position?
Assets, liabilities, and equity
Fill in the blank: The _______ records all documented transactions undertaken by the company.
books of prime entry
True or False: Control accounts should agree with the total of the individual balances of receivables or payables.
True
What is recorded in the sales day book?
Invoices sent out to customers
What effect does a debit have on trade receivables?
Increases the asset balance
What is the purpose of the journal in accounting?
To record financial transactions
What types of errors can be identified by extracting a trial balance?
- Errors disclosed by the trial balance
- Errors not disclosed by the trial balance
What is a suspense account used for?
To temporarily hold discrepancies until resolved
What is the process to correct errors disclosed by the trial balance?
Use the journal to correct errors
What does it mean to balance and close off ledger accounts?
To finalize account balances at the end of a period
What is the initial step in preparing a trial balance?
Prepare ledger balances
What is the main purpose of financial statements?
To provide an overview of the financial position and performance of a business
