Activity 1: True or False - Write TRUE when the statement is correct and FALSE if it is incorrect.

1.  AIS can only be made with a mechanical process.

2.  AIS are designed to transfer economic information into meaningful financial reports.

3.  Poor AIS poses greater risk to business.

4.  The basic accounting terminology is not included as part of AIS.

5.  AIS must have an adequate audit trail.

6.  The purpose or function of AIS is closely related to accounting.

7.  All accounting information system are computerized or done through EDP.

8.  The computerized accounting information system is intended only to serve external users.

9.  Manual accounting system is better for paper audit trail.

10.               In computerized accounting systems, the financial reports are commonly prepared at periodic intervals.

11.               A computerized accounting system is faster and more accurate than manual accounting system.

12.               Ledger-less bookkeeping eliminates all errors in recording.

13.               Only computerized accounting systems can use accounting devices and forms to transform and maintain business data into financial information.

14.               Recording of data in the accounting books must be evidenced by supporting documents with approval for recording from an authorized officer.

15.               An official receipt is a commercial invoice.

16.               A check voucher is used to record payments with minimal amount.

17.               A debit memo issued by a trading enterprise would increase its collectible to clients.

18.               The double-entry system is more useful in checking recording errors committed by accountants.

19.               Whether using the double-entry or single-entry system, debit and credit entries are used in recording business transaction.

20.               An account is an accounting form used to record and classify business transactions.

21.               Transactions are recorded first in the ledger and then transferred to the general ledger.

22.               A chart of accounts is a listing of all the account names or titles use to record the economic activity of the business.

23.               Accountants are not supposed to record in the books of accounts an arm's length transaction without source document.

24.               The recording process of accounting includes the chronological recording of transactions and verification of their existence through source documents.

25.               The process of transferring the debit and credit values in the journal to their respective account in the ledger is called journalizing.

26.               The double-entry system is the most acceptable accounting system because it provides financial reports that are free from error.

27.               Only a memorandum entry is recorded in the single-entry accounting system.

28.               A liability can be used to change or pay another form of liability.

29.               An account number is used to facilitate recording and cross-referencing.

30.               Once the debits and credits are equal, the trial balance contains accurate financial statements.

31.               A single-entry has only one debit account and one credit account.

32.               Only those economic activities that will increase or decrease any of the accounting elements are recorded in the books of accounts.

33.               To credit an account is to record the value received in a business transaction.

34.               The posting on the post-reference column of the general journal will indicate that the peso value of an account was already posted to its respective account in the general ledger.

35.               The general ledger is the source of the account balances listed in the trial balance.

36.               The classifying function of accounting is done in the book of final entry called the ledger.

37.               The journalizing and the posting of transactions are done in just one recording under the computerized accounting system.

38.               AIS should also observe cost-benefit measures.

39.               The general ledger is the book of original entry.

40.               The source documents are first recorded in the general ledger.

41.               The entries in the general journal are arranged chronologically.

42.               An account with equal debit and credit amounts shall be transferred to the trial balance.

43.               Footing helps check the correctness of the totals of debit and credit balances of reportable accounts.

44.               A working paper facilitates the adjustments of accounts.

45.               The adjusted trial balance is a required column the accounting worksheet.

46.               A worksheet is part of the formal accounting records.

47.               The general ledger is a modified T-accounts.

48.               The payroll sheet includes withholding tax on wages.

49.               Loss due to theft is recordable business transaction.

50.               Electronic accounting software expedites the accounting work.

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