DRAFT. Modifying Accounting Systems. SECTION 11.1 REVIEW QUESTIONS (page 479)

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2 SECTION 11.1 REVIEW QUESTIONS (continued) SECTION 11.1 EXERCISES (page 480) Exercise 1, p. 480 Subsidiary Ledger Features and Requirements Manual System Computerized System A. Customers and vendors are removed from the general ledger. B. Copies of source documents are sent to the general ledger clerk. C. Control accounts are required. D. Totals in the subsidiary ledgers must be balanced with general ledger accounts at the end of each month. E. Two source documents affect Accounts Receivable. F. Produces a report that also indicates the age of invoices. G. The general ledger clerk and subsidiary ledger clerks work with copies of the same source document. H. Produces reports showing customer and vendor balances. I. A journal entry by a subsidiary ledger clerk automatically updates accounts in the general ledger. J. Totals in the subsidiary ledgers always balance with the general ledger control accounts. Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 383

5 SECTION 11.1 EXERCISES (continued) Exercise 4, p. 481 A., B. S RECEIVABLE LEDGER Adams Bros., 12 Mountain Avenue Jun. 30 Invoice No Dr Invoice No Dr Cozo & Son, 620 Main Street Jun. 30 Invoice No Dr A. G. Farmer, 120A Blackwell Court Jun. 30 Invoice No Dr S. P. Handy Ltd., 75 Porter Road Jun. 30 Invoice No Dr Invoice No Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

6 SECTION 11.1 EXERCISES (continued) Exercise 4, p. 481 (continued) A., B. (continued) S RECEIVABLE LEDGER R. Mortimer, 60 Hawley Crescent Jun. 30 Invoice No Dr Invoice No Dr Invoice No Dr Renforth Sales, 192 Dale Place Jun. 30 Invoice No Dr Vista Limited, 2001 Central Ave. Jun. 30 Invoice No Dr 5 0 The Williams Company, 417 Lake Street Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 387

7 SECTION 11.1 EXERCISES (continued) Exercise 4, p. 483 C. Exercise 5, p. 483 A., B. S PAYABLE LEDGER Daiton Enterprises, 106 Fleet Street, Bathurst Sep. 30 Purchase Invoice No Cr Gordon & Associates, 700 King Street, Oakville Sep. 30 Purchase Invoice No. B Cr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

8 SECTION 11.1 EXERCISES (continued) Exercise 5, p. 483 (continued) A., B. (continued) Henderson Associates, Box 65, Welland Sep Purchase Invoice No Purchase Invoice No Cr Cr Kohler, R. M., 141 Nixon Avenue, Bathurst Sep. 30 Purchase Invoice No Cr North Shore Packaging, 1500 Middle Road, Leduc Sep. 30 Purchase Invoice No Cr Orenson & Company, 560 The Eastway, Dauphin Sep. 30 Purchase Invoice No Cr Purchase Invoice No Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 389

9 SECTION 11.1 EXERCISES (continued) Exercise 5, p. 483 (continued) A., B. (continued) Riggs, J. B., 75 Baxter Road, Enfield Sep. 30 Purchase Invoice No Cr Smithers, P. R., 106 Farr Street, Woodstock Sep. 30 Purchase Invoice No Cr Union Advertising, 7900 Primeau Avenue, Markham Sep. 30 Purchase Invoice No Cr Purchase Invoice No Purchase Invoice No Cr Cr Wrouse & Reid, 14 Kay Street, Sackfield, NB E4L 2C9 390 Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

11 SECTION 11.1 EXERCISES (continued) Exercise 6, p. 484 (continued) A. (continued) B. to D. S RECEIVABLE LEDGER Lim Crozier Elyk Isola Perrier Tams S PAYABLE LEDGER Ace Co. Delta Supplies Galaxy Co Metro Hardware Sun Inc. Pace Equipment Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

12 SECTION 11.1 EXERCISES (continued) Exercise 6, p. 484 (continued) B. to D. (continued) GENERAL LEDGER Bank Accounts Receivable Supplies Equipment Automobiles Bank Loan Accounts Payable C. Chen, Capital C. Chen, Drawings Revenue Advertising Expense General Expense Utilties Expense Rent Expense Wages Expense Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 393

13 SECTION 11.1 EXERCISES (continued) Exercise 6, p. 484 (continued) D. (continued) GENERAL JOURNAL PAGE DATE PARTICULARS P.R. DEBIT CREDIT 394 Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

14 SECTION 11.1 EXERCISES (continued) Exercise 6, p. 484 (continued) D. (continued) GENERAL JOURNAL PAGE DATE PARTICULARS P.R. DEBIT CREDIT E. Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 395

17 SECTION 11.2 REVIEW QUESTIONS (continued) SECTION 11.2 EXERCISES (page 499) Exercise 1, p. 499 Indicate whether each of the following statements is true or false by entering a T or an F in the space provided. Explain the reason for each F response in the space provided. A. A non-routine transaction is one that is out of the ordinary. B. The synoptic journal is ideally suited to a large company. C. A synoptic journal is a multi-columnar journal. D. In the synoptic journal, there would be a special column for HST Payable because it is a frequently occurring item. E. The headings in a synoptic journal are always the same as those shown in the textbook. F. The main advantage of the synoptic journal is time saved in journalizing transactions. G. An advantage of the synoptic journal is that it is not necessary to balance the accounting entry for every transaction. H. It is customary to forward the totals from one page of the synoptic journal to the next. I. The total of the Other Accounts debit section is posted as a debit to the general ledger. J. A debit amount can be entered in a credit column if it is circled. K. Every entry in the synoptic journal takes only one line. Explanations for F Responses 398 Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

18 SECTION 11.2 EXERCISES (continued) Exercise 2, p. 500 A., B. Donway Distributing Synoptic Journal DATE PARTICULARS Ref. No. Bank Accounts Receivable Dr Cr Dr Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 399

19 SECTION 11.2 EXERCISES (continued) Exercise 2, p. 500 (continued) A., B. (continued) Month of: August, PAGE: 19 Accounts Payable Sales Purchases Other Accounts Dr Cr Cr Dr Account P.R. Dr Cr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

20 SECTION 11.2 EXERCISES (continued) Exercise 2, p. 500 (continued) B. (continued) C. SYNOPTIC JOURNAL POSTING SUMMARY S DEBIT CREDIT Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 401

21 SECTION 11.2 EXERCISES (continued) Exercise 3, p. 502 A., B. Cash Payments Journal Sopinka Supplies Month of: April, PAGE: Purchases Wages Expense Other Accounts Accounts Payable Bank PARTICULARS DATE Cr Dr Dr Dr Account P.R. Dr Cr Ref. No. Exercise 4, p. 502 A. F. K. P. B. G. L. Q. C. H. M. R. D. I. N. E. J. O. 402 Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

22 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 A., C. Crest Hardware Synoptic Journal DATE PARTICULARS Ref. No. Bank Accounts Receivable Accounts Payable Dr Cr Dr Cr Dr Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 403

23 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 (continued) A., C. (continued) Month of: July, PAGE: 73 HST Sales Purchases Recoverable Payable Other Accounts Cr Dr Dr Cr Account P.R. Dr Cr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

24 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 (continued) B. R. Lai S RECEIVABLE LEDGER Jun. 30 Forwarded No Dr G. Langford Jun. 30 Forwarded No Dr R. Potts Jun. 30 Forwarded No Dr S PAYABLE LEDGER City Hardware Supply Jun. 30 Forwarded No Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 405

25 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 (continued) B. (continued) Clix Auto Joe Jay Transport Special Steel Products Jun. 30 Forwarded No. 147 Cr D. GENERAL LEDGER Bank No. 101 Jun. 30 Forwarded Dr Accounts Receivable No. 105 Jun. 30 Forwarded Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

26 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 (continued) D. (continued) Merchandise Inventory No. 110 Jun. 30 Forwarded Dr Supplies No. 115 Jun. 30 Forwarded Dr Store Equipment No. 120 Jun. 30 Forwarded Dr Accumulated Depreciation Store Equipment No. 121 Jun. 30 Forwarded Cr Delivery Equipment No. 130 Jun. 30 Forwarded Dr Accumulated Depreciation Delivery Equipment No. 131 Jun. 30 Forwarded Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 407

27 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 (continued) D. (continued) Accounts Payable No. 201 Jun. 30 Forwarded Cr HST Payable No. 205 Jun. 30 Forwarded Cr HST Recoverable No. 207 Jun. 30 Forwarded Dr Loan Payable Federal Finance No. 210 Jun. 30 Forwarded Cr F. Dunn, Capital No. 301 Jun. 30 Forwarded Cr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

28 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 (continued) D. (continued) F. Dunn, Drawings No. 302 Jun. 30 Forwarded Dr Sales No. 401 Jun. 30 Forwarded Cr Delivery Expense No. 505 Jun. 30 Forwarded Dr Freight-in No. 510 Jun. 30 Forwarded Dr General Expense No. 515 Jun. 30 Forwarded Dr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 409

29 SECTION 11.2 EXERCISES (continued) Exercise 5, p. 503 (continued) D. (continued) Purchases No. 520 Jun. 30 Forwarded Dr Rent Expense No. 525 Jun. 30 Forwarded Dr Wages Expense No. 530 Jun. 30 Forwarded Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

33 SECTION 11.3 EXERCISES (page 509) Exercise 1, p. 509 A. to D. Cash Receipts Journal PAGE: 1 Other Accounts Special Revenue Government Grant Rent Revenue Bank EXPLANATION DATE Dr Cr Cr Cr Account P.R. Dr Cr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

34 SECTION 11.3 EXERCISES (continued) Exercise 1, p. 509 (continued) A. to D. (continued) Cash Payments Journal PAGE: 1 Land Other Accounts Special Assess. Rent Expense Bank EXPLANATION DATE Cr Dr Dr Dr Account P.R. Dr Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 415

35 SECTION 11.3 EXERCISES (continued) Exercise 1, p. 509 (continued) B., C. Cash Proof Bank Debits (cash receipts journal) Less: Bank Credits (cash payments journal) Cash per Journals Less: Cash Count Cash Short or Over D. Bank ASSETS No Land No Houses No Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

36 SECTION 11.3 EXERCISES (continued) Exercise 1, p. 509 (continued) D. (continued) Railroads No Utilities No Mortgage Payable LIABILITIES No PARTNERS EQUITY N. Wang, Capital No L. Rivera, Capital No Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 417

37 SECTION 11.3 EXERCISES (continued) Exercise 1, p. 509 (continued) D. (continued) Government Grant No Rent Revenue REVENUE No Gain on Trade No Special Revenue No Travel Revenue No Utilities Revenue No Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

38 SECTION 11.3 EXERCISES (continued) Exercise 1, p. 509 (continued) D. (continued) Cash Short and Over EXPENSES No Income Tax Expense No Jail Expense No Loss on Sale No Loss on Trade No Mortgage Interest No Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 419

39 SECTION 11.3 EXERCISES (continued) Exercise 1, p. 509 (continued) D. (continued) Rent Expense No Special Assessments No Travel Expense No Utilities Expense No Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

48 CHAPTER 11 REVIEW EXERCISES Using Your Knowledge Exercise 1, p. 527 A Total Net Corrections Changes to control account figure Changes to subsidiary ledger figure B. Exercise 2, p. 527 In the Subsidiary Ledger In the General Ledger The accounting entry will be Source Document purchase invoice cash receipt on account sales invoice cheque copy on account Which subsidiary ledger is affected? Will the account be increased (I) or decreased (D)? Will the account be debited or credited? Bank Accounts Receivable Accounts Payable Asset or Expense Revenue A/R A/P I D Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 429

49 CHAPTER 11 REVIEW EXERCISES (continued) Comprehensive Exercises Exercise 3, p. 528 A., F. Bank GENERAL LEDGER No.101 Mar. 31 Forwarded Dr Accounts Receivable No.105 Mar. 31 Forwarded Dr Supplies No.110 Mar. 31 Forwarded Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

50 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 3, p. 528 (continued) A., F. (continued) Office Equipment No. 115 Mar. 31 Forwarded Dr Accumulated Depreciation Office Equipment No. 116 Mar. 31 Forwarded Cr Automobile No. 120 Mar. 31 Forwarded Dr Accumulated Depreciation Automobile No. 121 Mar. 31 Forwarded Cr Accounts Payable No. 205 Mar. 31 Forwarded Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 431

51 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 3, p. 528 (continued) A., F. (continued) HST Payable No. 206 Mar. 31 Forwarded Cr HST Recoverable No. 207 Mar. 31 Forwarded Dr R. Bragg, Capital No. 301 Mar. 31 Forwarded Cr R. Bragg, Drawings No. 302 Mar. 31 Forwarded Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

52 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 3, p. 528 (continued) A., F. (continued) Fees Income No. 401 Mar. 31 Forwarded Cr Car Expense No. 505 Mar. 31 Forwarded Dr Miscellaneous Expense No. 515 Mar. 31 Forwarded Dr Rent Expense No. 520 Mar. 31 Forwarded Dr Telephone Expense No. 525 Mar. 31 Forwarded Dr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 433

53 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 3, p. 528 (continued) A., F. (continued) Utilities Expense No. 510 Mar. 31 Forwarded Dr Wages Expense No. 530 Mar. 31 Forwarded Dr B., D. S RECEIVABLE LEDGER Blue Cab Company, 16 Fox Street Mar. 31 Forwarded No. 74 Dr Champion Store, 175 Main Street Mar. 31 Forwarded No. 75 Dr Oasis Restaurant, 325 Second Street Mar. 31 Forwarded No. 74 Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

54 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 3, p. 528 (continued) B., D. (continued) Village Restaurant, 400 Main Street Mar. 31 Forwarded No. 77 Dr C., D. S PAYABLE LEDGER M. Ball, Consultant, 430 Red Road, Bigtown Mar. 31 Forwarded Cr R. & R. Supply, 151 King Street Mar. 31 Forwarded Cr Stirling Company, 46 River Road Mar. 31 Forwarded Cr Tom s Garage, 705 Victoria Street Mar. 31 Forwarded Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 435

55 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 3, p. 528 (continued) E. GENERAL JOURNAL PAGE 76 DATE PARTICULARS P.R. DEBIT CREDIT 436 Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

56 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 3, p. 528 (continued) E. (continued) GENERAL JOURNAL PAGE 77 DATE PARTICULARS P.R. DEBIT CREDIT Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 437

59 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 A. C. Bruk S RECEIVABLE LEDGER Dec. 31 Forwarded No. 325 Dr M. Howard Dec. 31 Forwarded No. 296 Dr J. Joss Dec. 31 Forwarded No. 306 Dr S. Persaud Dec. 31 Forwarded No. 217 Dr D. Wilkins Dec. 31 Forwarded No. 331 Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

60 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 (continued) A. (continued) S PAYABLE LEDGER Smith s Service Station Stirling Company Dec. 31 Forwarded No. 245 Cr Triangle Electric Dec. 31 Forwarded No Cr Universal Vacuums Dec. 31 Forwarded No Cr Western Electric Dec. 31 Forwarded No. 246 Cr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 441

61 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 (continued) B., C. Cash Receipts Journal Month of: January, PAGE: 61 Sales HST Payable Other Accounts Accounts Receivable Bank PARTICULARS DATE Dr Cr Cr Cr Account P.R. Dr Cr Ref. No. Sales Journal Month of: January, PAGE: 82 Sales HST Payable Sales Rtr/Allow Other Accounts Accounts Receivable PARTICULARS DATE Dr Cr Cr Dr Account P.R. Dr Cr Purchases Journal Month of: January, PAGE: 74 Ref. No. Supplies HST Recoverable Other Accounts Purchases Accounts Payable PARTICULARS DATE Cr Dr Dr Dr Account P.R. Dr Cr Ref. No. 442 Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

62 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 (continued B., C. (continued) Cash Payments Journal Month of: January, PAGE: 177 Purchases Other Accounts Wages Expense HST Recoverable Accounts Payable Bank PARTICULARS DATE Cr Dr Dr Dr Dr Account P.R. Dr Cr Ref. No. Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 443

63 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 (continued) C. (continued) GENERAL JOURNAL PAGE 29 DATE PARTICULARS P.R. DEBIT CREDIT SAK pt1 GENERAL LEDGER Bank No. 105 Dec. 31 Forwarded Dr Accounts Receivable No. 110 Dec. 30 Forwarded Dr Supplies No. 115 Dec. 31 Forwarded Dr Merchandise Inventory No. 120 Dec. 31 Forwarded Dr Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

64 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 (continued) C. (continued) Equipment No. 125 Dec. 31 Forwarded Dr Accumulated Depreciation Equipment No. 126 Dec. 31 Forwarded Cr Truck No. 130 Dec. 31 Forwarded Dr Accumulated Depreciation Truck No. 131 Dec. 31 Forwarded Cr Accounts Payable No. 205 Dec. 30 Forwarded Cr Bank Loan No. 210 Dec. 31 Forwarded Dr Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 445

65 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 (continued) C. (continued) HST Payable No. 220 Dec. 31 Forwarded Cr HST Recoverable No. 225 Dec. 31 Forwarded Dr S. Scales, Capital No. 305 Dec. 31 Forwarded Cr S. Scales, Drawings No. 310 Sales No Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

66 CHAPTER 11 REVIEW EXERCISES (continued) Exercise 5, p. 530 (continued) C. (continued) Purchases No. 505 Delivery Expense No. 510 General Expense No. 515 Rent Expense No. 520 Telephone Expense No. 525 Wages Expense No. 530 Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 447

70 CHAPTER 11 REVIEW EXERCISES (continued) Cases for Further Thought, p CASE STUDIES (page 535) Case 1 Gaining Control over Accounts Receivable (p. 535) 1. Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 451

71 CASE STUDIES (continued) Case 1 Gaining Control over Accounts Receivable (p. 535) (continued) 2. Case 2 Looking After Number One: Good or Bad? (p. 536) Case 3 A Personalized Synoptic Journal? (p. 536) Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

72 CASE STUDIES (continued) Case 4: Challenge No Journal!, (p. 537) CAREER Roberta Lei, LLB Legal Counsel/Australia and New Zealand Banking Group Limited (ANZ), Hong Kong (page 539) Discussion (p. 540) Copyright 2013 Pearson Canada Inc. Chapter 11 Modifying Accounting Systems 453

73 CAREER Roberta Lei, LLB Legal Counsel/Australia and New Zealand Banking Group Limited (ANZ), Hong Kong (continued) Discussion (continued) Research and Writing Questions (p. 540) Accounting 1 Student Workbook Copyright 2013 Pearson Canada Inc.

Fundamental Accounting Principles, 21st Edition Author(s): Wild, John; Shaw, Ken; Chiappetta, Barbara ISBN-13:

Fundamental Accounting Principles, 21st Edition Author(s): Wild, John; Shaw, Ken; Chiappetta, Barbara ISBN-13: Dakota College at Course Syllabus Course Prefix/Number/Title: ACCT 200 Elements of Accounting I Credits: 3 Instructor: Kara Bowen Office: Thatcher Hall 109, Bottineau campus Phone: 701 228 5432 Email: