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Journalizing and Posting Transactions

Terms in this set (83)

The Item column in a general ledger is used to provide ___________________ for special entries.
descriptions
The act of entering transactions in the journal is known as ____________.
journalizing
The flow of data through the accounting information system includes analyzing transactions, journalizing, posting, and preparing a trial balance.
True
An account in the chart of accounts is assigned a number at random.
False
Source documents begin the process of entering transactions in the accounting system.
True
Source documents provide objective, verifiable evidence of business transactions.
True
Copies of sales tickets or sales invoices issued to customers or clients provide information about sales of goods or services.
True
Information about cash disbursements can be obtained from check stubs and carbon copies of checks.
True
The purpose of a journal is to provide a chronological record of all transactions completed by the business.
True
The chart of accounts includes the account titles in numerical order.
True
The Description column of a two-column journal is used to enter the titles of the accounts affected by each transaction, together with a description of the transaction.
True
A separate line in the two-column journal should be used for each account title.
True
Entering transactions in a journal is called posting.
False
To make the posting process easier, posting reference entries are made at the same time that transactions are entered in the two-column journal.
False
The posting reference, amount, and description are the three items of information about each transaction that should be entered in the ledger accounts.
False
The main advantage of a two-column account is that it maintains a running balance.
False
It is permissible to enter information about a transaction in the ledger accounts first, before entering the information in the journal.
False
The journal provides the information needed to transfer the debits and credits to the accounts in the ledger.
True
The ledger is a reliable source of information only when all of the transactions entered in the journal have been posted.
True
The purpose of a trial balance is to prove that the totals of the debit and credit balances in the ledger accounts are equal.
True
A complete set of all the accounts used by a business is known as the general ledger.
True
When the trial balance indicates that the ledger is in balance, you can assume there are no errors in the ledger.
False
In some cases, erasures are better for corrections than the ruling method.
False
A list of all the accounts used by a business is called a trial balance.
False
The chart of accounts includes assets, liabilities, and owner's equity accounts only.
False
Source documents provide the input for the accounting process.
True
Almost any document that provides information about a business transaction is included in the chart of accounts.
False
Purchase invoices received from suppliers provide information about cash payments.
False
The process of copying the debits and credits from the journal to the ledger accounts is known as posting.
True
After posting journal information to the ledger accounts, a check mark should be entered in the Posting Reference column of the journal to indicate that the transaction item has been posted.
False
A two-column journal has only two amount columns—one for the amount of the entry and one for the running balance.
False
Each entry in the journal affects two or more accounts.
True
When entering titles of accounts in the two-column journal, the account to be credited is entered first and the account to be debited is entered second.
False
No entries are made in the Posting Reference column in a two-column journal when journalizing.
True
Firms are more likely to use a four-column general ledger account than T accounts.
True
Entering the account number in the Posting Reference column of the journal is the first step in the posting process.
False
A trial balance can only be accurately prepared on the last day of the accounting period after all transactions have been entered.
False
Transactions which do not affect the cash account do not need to be entered in the journal, because they do not affect net income or loss.
False
The general ledger is kept to supply management with desired information in summary form.
True
All transactions must be posted before preparing a trial balance.
True
An erasure may suggest that you are hiding something.
True
The flow of financial data through the accounting information system does NOT include:
a. journalizing and posting transactions.
b. receiving payment for all accounts receivable.
c. preparing a trial balance.
d. analyzing transactions.
receiving payment for all accounts receivable.
A chart of accounts does NOT include
a. liabilities.
b. names of suppliers.
c. owner's equity.
d. assets.
names of suppliers.
Purchase invoices received from suppliers provide information about
purchases of goods or services.
When delivery equipment is purchased on account, the transaction to be entered by the purchaser includes
debiting Delivery Equipment and crediting Accounts Payable.
A chronological record of financial transactions expressed as debits and credits to accounts is provided by the
journal.
The month in the journal is recorded
as the first entry on a page.
Forms and papers that provide information about a business transaction are called
source documents.
Because the first formal accounting record of a transaction is made in a journal from source document information, a journal is commonly referred to as a(n)
book of original entry.
For EVERY transaction, the accountant enters the
day.
The transaction to record payment for delivery equipment that was purchased on account in the previous month would include
debiting Accounts Payable and crediting Cash.
Journalizing does NOT include
a. crediting account(s) that are affected.
b. entering the date.
c. posting the debits and credits to the accounts.
d. debiting account(s) that are affected.
posting the debits and credits to the accounts.
Copies of sales tickets or sales invoices issued to customers or clients provide information about
sales of goods or services.
Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information about
cash receipts.
The accounts in the chart of accounts are arranged in
numerical order.
The steps in the journalizing process include all of the following EXCEPT
a. enter the debit.
b. enter the credit.
c. enter the date.
d. enter the balance.
enter the balance.
The journal entry to purchase equipment on account includes a:
credit to Accounts Payable.
The simplest form of journal is one with
two columns.
If the owner of a company invested cash in a business enterprise, the transaction would include
debiting Cash and crediting Capital.
Sales revenue received in cash is entered by
debiting Cash and crediting Sales Revenue.
Every entry in the journal should include all of the following EXCEPT
a. the amounts.
b. the balance of the accounts affected.
c. a brief description.
d. the title of each account affected.
the balance of the accounts affected.
The Posting Reference column of the journal provides a cross-reference between the
journal and ledger.
The Item column in the general ledger is used to describe special entries NOT including which of the following?
forwarding entries
Posting from the journal to the ledger does NOT involve which of the following steps?
Enter the description of the entry.
Instead of T accounts, businesses are more likely to use a
four-column account.
Cash is used to pay for a car for personal use by the owner. The transaction includes
debiting Drawing and crediting Cash.
Corrections in accounts should be made by
preparing a correct entry.
Corrections in accounts should be
corrected by preparing a correcting entry.
The payment of a utility bill (such as electricity) for the month would include
debiting Utilities Expense and crediting Cash.
If cash is paid for worker salaries, the transaction includes
debiting Salaries Expense and crediting Cash.
To find an error, you should do all of the following EXCEPT
a. find the difference between debits and credits.
b. retrace any math computations.
c. erase questionable entries.
d. double-check every entry.
erase questionable entries.
Almost any document that provides information about a business transaction can be called a(n) ______________ ________________.
source document
When two digits in a debit or credit amount are reversed, a(n) ____________ _____________ has occurred.
transposition error
When an incorrect entry has been journalized and posted to a wrong account or for the wrong amount, a(n) _____________ _____________ is required.
correcting entry
Copying the debits and credits from the journal to the ledger accounts is a process called ______________ .
posting
A list of all accounts (account titles) used by a business is called a(n) ___________ _____ ___________ .
chart of accounts
The payment of rent is journalized as a debit to Utilities Expense and a credit to Cash. This will require a _______________ _______________ .
correcting entry
The journal is commonly referred to as a(n) __________ ______ _________ _______________, because it is here that the first formal accounting record of a transaction is made.
book of original entry
Journal entries requiring more than one debit and/or one credit are called ______________ _______________.
compound entries
The information in the Posting Reference columns of the journal and the ledger that provides a link between the journal and the ledger is known as a(n) _______________-______________.
cross-reference
If the difference between the debits and credits of a trial balance is divisible by nine, you may have committed a slide error or a(n) _________________ error.
transposition
A(n) _____________ _____________ occurs when debit or credit amounts move a digit or two to the left or right when entered.
slide error
A(n) _______________ _______________ can be prepared daily, weekly, monthly, or whenever desired to prove the equality of the debits and credits in the ledger accounts.
trial balance
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