Chapter 4 Flashcards
Which of the following is not an accurate statement regarding the transaction recording process?
a) The description should be as concise as possible and therefore excludes document numbers.
b) Account names are written exactly as shown in the chart of accounts.
c) A blank line is displayed between journal entries.
d) Transactions are listed in chronological order.
a) The description should be as concise as possible and therefore excludes document numbers.
What appears on the final row of a journal entry?
The journal entry description
Which of the following is an accurate statement regarding the debit and/or the credit in a journal entry?
a) The debit is listed after the credit within the journal entry.
b) The credit is listed on the same row as the date.
c) The credit is indented about one-half inch from the left margin.
d) The amount associated with the debit and the amount associated with the credit are entered within the same column.
c) The credit is indented about one-half inch from the left margin.
Which of the following is the final step in the posting process?
a) Enter the amount in either the Debit column or the Credit column in the general ledger.
b) On the general journal enter the ledger account number in the Posting Reference column.
c) Enter the date of the transaction and, if necessary, the description in the general ledger.
d) Compute the new balance and enter it in either the Debit Balance column or the Credit Balance column in the general ledger
b) On the general journal enter the ledger account number in the Posting Reference column.
Which of the following is not a benefit of posting transactions?
a) Provides a complete record of increases and decreases for each account
b) Displays the current balance for each account
c) Facilitates the preparation of the trial balance and the financial statements
d) Ensures that the journal entries have been properly recorded in the general journal
d) Ensures that the journal entries have been properly recorded in the general journal
Which of the following account types is listed last within the general ledger?
a) expenses
b) liabilties
c) revenue
d) owners equity
expenses
A description should accompany each entry made in the:
general journal
Which of the following statements is NOT correct?
a) The description of a journal entry should include a reference to the source of the information contained in the entry.
b) If goods are purchased on credit, the supplier’s invoice number is used as the source document for the transaction.
c) The credit portion of a general journal entry is always recorded first.
d) A firm should be able to trace amounts through the accounting records and back to their source documents.
c) The credit portion of a general journal entry is always recorded first.
When posting, what is recorded in the Posting Reference column of the journal?
the ledger account number
The process of transferring the data from the journal to the general ledger is called:
posting
What is the correct order of steps in the accounting cycle?
record journal entries, post journal entries to the ledger, prepare a trial balance, prepare the financial statements
Which of the following statements is CORRECT?
a) The general ledger contains the accounts that are used to prepare the financial statements.
b) Some companies use the general ledger instead of a general journal.
c) When entries are posted from the general journal to the general ledger, the account number is written in the Posting Reference column in the general ledger.
d) When entries are posted from the general journal to the general ledger, the page number is written in the Posting Reference column in the general journal.
a) The general ledger contains the accounts that are used to prepare the financial statements.
Which of the following is a correct step to take after discovering an error in the recording of a transaction?
a) If the error is discovered after the entry is posted, neatly cross out the item and write the correct data above it.
b) If the error is discovered before the entry is posted, erase the incorrect amount and replace with the correct figure.
c) If the error is discovered after the entry is posted, journalize and post a correcting entry.
d) If the error is discovered before the entry is posted, amend the description of the entry to identify the error.
c) If the error is discovered after the entry is posted, journalize and post a correcting entry.
What is recorded when there is an error in data that has been journalized and posted?
a correcting entry
A form of the partnerships business entity is:
LLP
