Deck 4: Journalizing and Posting Transactions

Question 1

To make the posting process easier, posting reference entries are made at the same time that transactions are entered in the two-column journal.

Answer 1

False

Question 2

The purpose of a journal is to provide a chronological record of all transactions completed by the business.

Answer 2

True

Question 3

It is permissible to enter information about a transaction in the ledger accounts first, before entering the information in the journal.

Answer 3

False

Question 4

The ledger is a reliable source of information only when all of the transactions entered in the journal have been posted.

Question 5

The main advantage of a two-column account is that it maintains a running balance.

Question 6

Copies of sales tickets or sales invoices issued to customers or clients provide information about sales of goods or services.

Question 7

A separate line in the two-column journal should be used for each account title.

Question 8

Information about cash receipts can be obtained from check stubs and carbon copies of checks.

Question 9

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.

Question 10

Source documents provide objective, verifiable evidence of business transactions.

Question 11

The posting reference, amount, and description are the three items of information about each transaction that should be entered in the ledger accounts.

Question 12

The purpose of a trial balance is to prove that the totals of the debit and credit balances in the ledger accounts are equal.

Question 13

A complete set of all the accounts used by a business is known as the general ledger.

Question 14

The flow of data through the accounting information system includes analyzing transactions, journalizing, posting, and preparing a trial balance.

Question 15

The chart of accounts includes the account titles in numerical order.

Question 16

Source documents begin the process of entering transactions in the accounting system.

Question 17

The journal provides the information needed to transfer the debits and credits to the accounts in the ledger.

Question 18

Entering transactions in a journal is called posting.

Question 19

When the trial balance indicates that the ledger is in balance, you can assume there are no errors in the ledger.

Question 20

An account in the chart of accounts is assigned a number at random.

Question 21

No entries are made in the Posting Reference column in a two-column journal when journalizing.

Question 22

Almost any document that provides information about a business transaction is included in the chart of accounts.

Question 23

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.

Question 24

Purchase invoices received from suppliers provide information about cash payments.

Question 25

The flow of financial data through the accounting information system does NOT include

A) analyzing transactions.
B) journalizing and posting transactions.
C) preparing a trial balance.
D) paying an account payable.

Question 26

Transactions which do not affect the cash account do not need to be entered in the journal, since they do not affect net income or loss.

Question 27

A trial balance can only be accurately prepared on the first day of the accounting period before any new transactions have been entered.

Question 28

In some cases, erasures are better for corrections than the ruling method.

Question 29

Firms are more likely to use a four-column journal account than T accounts.

Question 30

Entering the account number in the Posting Reference column of the journal is the first step in the posting process.

Question 31

The chart of accounts includes assets, liabilities, and owner's equity accounts only.

Question 32

A list of all the accounts used by a business is called a trial balance.

Question 33

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.

Question 34

Source documents provide the input for the accounting process.

Question 35

The general ledger is kept to supply management with desired information in summary form.

Question 36

A two-column journal has only two amount columns-one for the amount of the entry and one for the running balance.

Question 37

An erasure may suggest that you are hiding something.

Question 38

All transactions must be posted before preparing a trial balance.

Question 39

The process of copying the debits and credits from the journal to the ledger accounts is known as journalizing.

Question 40

Each entry in the journal affects two or more accounts.

Question 41

A chronological record of financial transactions expressed as debits and credits to accounts is provided by the

A) ledger.
B) journal.
C) balance sheet.
D) trial balance.

Question 42

Check stubs and carbon copies of checks provide information about

A) cash payments.
B) cash receipts.
C) sales of goods or services.
D) purchases of goods or services.

Question 43

Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information about

A) cash payments.
B) cash receipts.
C) accounts payable.
D) purchases of goods or services.

Question 44

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)

A) ledger.
B) account.
C) cross-reference.
D) book of original entry.

Question 45

The Posting Reference column of the journal provides a cross-reference between the

A) ledger and accounts.
B) journal and ledger.
C) ledger and financial statements.
D) journal and financial statements.

Question 46

The accounts in the chart of accounts are arranged in

A) alphabetical order.
B) numerical order.
C) chronological order.
D) the order they are created.

Question 47

The simplest form of journal is one with

A) four columns.
B) three columns.
C) two columns.
D) one column.

Question 48

The steps in the journalizing process include all of the following EXCEPT

A) enter the balance.
B) enter the debit.
C) enter the date.
D) enter the credit.

Question 49

For EVERY transaction, the accountant enters the

A) year, month, and day.
B) month and day.
C) day.
D) year and day.

Question 50

Service revenue received in cash is entered by

A) debiting Cash and crediting Service Revenue.
B) debiting Service Revenue and crediting Cash.
C) debiting Cash and crediting Accounts Payable.
D) debiting Accounts Payable and crediting Cash.

Question 51

Every entry in the journal should include all of the following EXCEPT

A) the title of each account affected.
B) the amounts.
C) a brief description.
D) the balance of the accounts affected.

Question 52

When delivery equipment is purchased on account, the transaction to be entered by the purchaser includes

A) debiting Delivery Equipment and crediting Accounts Payable.
B) debiting Delivery Expense and crediting Cash.
C) debiting Delivery Expense and crediting Accounts Payable.
D) debiting Delivery Equipment and crediting Cash.

Question 53

Forms and papers that provide information about a business transaction are called

A) ledgers.
B) accounts.
C) source documents.
D) journals.

Question 54

The month in the journal is recorded

A) with every transaction.
B) as the first entry on a page.
C) for the first and last transaction of the month.
D) for the last transaction of the month.

Question 55

Journalizing does NOT include

A) debiting account(s) that are affected.
B) crediting account(s) that are affected.
C) posting the debits and credits to the accounts.
D) entering the date.

Question 56

The transaction to record payment for delivery equipment that was purchased on account in the previous month would include

A) debiting Cash and crediting Accounts Receivable.
B) debiting Cash and crediting Accounts Payable.
C) debiting Accounts Payable and crediting Cash.
D) debiting Delivery Equipment and crediting Cash.

Question 57

If the owner of a company invested cash in a business enterprise, the transaction would include

A) debiting Cash and crediting Capital.
B) debiting Capital and crediting Cash.
C) debiting Cash and crediting Revenue.
D) debiting Revenue and crediting Cash.

Question 58

A chart of accounts does NOT include

A) assets.
B) liabilities.
C) owner's equity.
D) names of customers.

Question 59

Copies of sales tickets or sales invoices issued to customers or clients provide information about

A) sales of goods or services.
B) purchases of goods or services.
C) cash receipts.
D) cash payments.

Question 60

Purchase invoices received from suppliers provide information about

A) cash receipts.
B) sales of goods.
C) purchases of goods or services.
D) cash payments.

Question 61

A complete set of all the accounts used by a business.

Question 62

A list of all accounts (account titles) used by a business.

Question 63

An entry requiring more than one debit and/or one credit.

Question 64

Contains columns for the debit or credit transactions and columns for the debit or credit running balance. In addition, there are columns for the date, description of the item, and posting reference.

Question 65

Match the terms with the definitions.a.book of original entry
b.chart of accounts
c.compound entry
d.correcting entry
e.cross-reference
f.four-column account
g.general ledger
h.journal
i.journalizing
j.posting
k.ruling method
l.slide error
m.source document
n.transposition error
o.trial balance
Occurs when debit or credit amounts move a digit or two to the left or right when entered.

Question 66

If cash is paid for office rent, the transaction includes

A) debiting Rent Expense and crediting Cash.
B) debiting Rent Expense and crediting Accounts Payable.
C) debiting Rent Expense and crediting Capital.
D) debiting Cash and crediting Rent Expense.

Question 67

The link provided by the information in the Posting Reference columns of the journal and ledger.

Question 68

Almost any document that provides information about a business transaction.

Question 69

Another name for a journal because it is here that the first formal accounting record of a transaction is made.

Question 70

The payment of a telephone bill for the month would include

A) debiting Capital and crediting Accounts Payable.
B) debiting Cash and crediting Telephone Expense.
C) debiting Telephone Expense and crediting Accounts Payable.
D) debiting Telephone Expense and crediting Cash.

Question 71

Posting from the journal to the ledger does NOT involve which of the following steps?

A) Enter the date of each transaction in the accounts.
B) Enter the amount of each transaction in the accounts.
C) Enter the page of the journal from which each transaction is posted in the accounts.
D) Enter the description of the entry.

Question 72

Entering the transactions in a journal.

Question 73

The Item column in the general ledger is used for

A) account titles.
B) the balance of the account.
C) a description of special entries.
D) footings.

Question 74

Instead of T accounts, businesses are more likely to use a

A) chart of accounts.
B) balance sheet.
C) four-column account.
D) general journal.

Question 75

A day-by-day listing of the transactions of a business.

Question 76

Cash is used to pay for a car for personal use by the owner. The transaction includes

A) debiting Cash and crediting Drawing.
B) debiting Drawing and crediting Cash.
C) debiting Capital and crediting Cash.
D) debiting Car Expense and crediting Cash.

Question 77

The process of copying the debits and credits from the journal to the ledger accounts.

Question 78

Corrections in accounts should be made by

A) correction fluid.
B) neat erasure.
C) the ruling method.
D) a permanent marker.

Question 79

Corrections in accounts should NOT be

A) traceable.
B) initialed.
C) ruled.
D) covered completely.

Question 80

To find an error, you should do all of the following EXCEPT

A) double-check every entry.
B) find the difference between debits and credits.
C) erase questionable entries.
D) retrace any math computations.