Chapter 2: Accounting Information System

Question 1

Cash transactions

Answer 1

Payment is made at the same time or immediately during a purchase

Question 2

Credit transactions

Answer 2

Payment is delayed or postponed during a credit sale or purchase

Question 3

Accounting cycle

Answer 3

1. Identify and record
2. Adjust
3. Report
4. Close

Question 4

Accounting Information system

Answer 4

1. Source document
2. Journal
3. Ledger
4. Trail balance
5. Financial statements

Question 5

Receipt

Answer 5

Acknowledges payment received from customers immediately after the business has sold goods or provided services

Question 6

Remittance advice

Answer 6

Informs credit supplier that payment by cheque has been made for a specific invoice

Question 7

Invoice

Answer 7

Informs credit customers of the amount owed after the business sold goods or provided services on credit

Question 8

Credit note

Answer 8

Reduces the amount owed by the credit customers
- who were previously overcharged
- goods were returned

Question 9

Debit note

Answer 9

Increases the amount owed by credit customers who were previously undercharged

Question 10

Payment voucher

Answer 10

Process payment to credit suppliers

Question 11

Bank statement

Answer 11

Checks and tallies against the business records of its cash at bank account