Deck 16: Accounting for a Professional Service Business: The Combination Journal

Question 1

Amounts in the general columns of the combination journal are posted individually.

Answer 1

True

Question 2

Each entry is posted individually from the General Debit column of the combination journal to the proper general ledger account.

Answer 2

True

Question 3

If the owner has not made any additional investments during the period, the financial statements can be prepared directly from the work sheet.

Answer 3

True

Question 4

To be sure that the debits entered in the journal are equal to the credits, the journal must be posted.

Question 5

Financial statements are normally prepared at the end of the fiscal year.

Question 6

A journal with special and general columns is called a combination journal.

Question 7

Professional service business enterprises include attorneys, physicians, dentists, public accountants, artists, and educators.

Question 8

Many small professional service businesses use the modified cash basis of accounting.

Question 9

In using a combination journal, posting requires less time; however, the danger of making a posting error is increased.

Question 10

More time is required if a journal contains special columns for cash debits and cash credits.

Question 11

Posting from the combination journal to the general ledger must be done at the end of the month only.

Question 12

A considerable amount of time and space is saved if a journal contains a special column for cash debits and one for cash credits.

Question 13

Professional service enterprises include real estate, insurance, advertising, transportation, and various other firms.

Question 14

Businesses might set up special journal columns for different accounts depending on the frequency of their use.

Question 15

Each entry is posted individually from the Cash Credit column of the combination journal to the proper general ledger account.

Question 16

Frequently used accounts are entered in the General Debit column and the General Credit column of a special journal.

Question 17

Amounts in the special columns of the combination journal are posted individually.

Question 18

A journal with Debit and Credit columns for Cash, as well as General Debit and General Credit columns, is called a general journal.

Question 19

Adjusting and closing entries are made differently in the combination journal and in the general journal.

Question 20

Under the modified cash basis of accounting, adjustments are made only for prepaid items and depreciation on plant and equipment.

Question 21

The cash balance may be computed at any time during the accounting period.

Question 22

When an individual entry is posted from the combination journal to a ledger account, what information is entered in the "Post. Ref." column of the ledger account?

A) the letters "CJ"
B) the letters "CJ" and the page number
C) the letters "CJ" and the invoice number
D) the letters "CJ" and the year

Question 23

Which of the following would be placed in the "Post. Ref." column to indicate that the amount is not posted individually?

A) the abbreviation "CJ"
B) an "x"
C) a dash
D) a check mark

Question 24

Individual entries are posted from which of the following columns in the combination journal to the proper general ledger account?

A) Post. Ref. column
B) Date column
C) Cash Credit column
D) General Debit column

Question 25

A journal with special and general columns is called a

A) general journal.
B) combination journal.
C) two-column journal.
D) business journal.

Question 26

It is NOT necessary to post the total of which of the following columns to the related ledger accounts?

A) the Cash Debit and Credit columns totals
B) the Wages Expense Debit column total
C) the General Debit and Credit column totals
D) the Medical Supplies Debit column total

Question 27

Which of the following amounts should NOT be posted to any ledger account?

A) the total of the Cash Credit column
B) the total of the Professional Fees column
C) the total of the Supplies Expense column
D) the total of the General Debit and Credit column

Question 28

Professional service business enterprises include the following businesses EXCEPT

A) accounting.
B) real estate.
C) dentistry.
D) medicine.

Question 29

A type of business in which the principal source of revenue is compensation for services rendered to a business firm or to a person is a

A) mercantile enterprise.
B) manufacturing enterprise.
C) professional service enterprise.
D) retail enterprise.

Question 30

To record the purchase of assets on account under the modified cash accounting method,

A) no entry is required.
B) debit the asset and credit Accounts Payable.
C) debit the asset and credit Cash.
D) debit Accounts Receivable and credit Accounts Payable.

Question 31

The debits and credits to Cash are not posted until the end of the accounting period.

Question 32

The debits and credits to Cash in the combination journal are posted

A) daily.
B) weekly.
C) at the end of the accounting period.
D) after each transaction.

Question 33

To record wages earned but not paid under the modified cash accounting method,

A) debit Wages Payable and credit Wages Expense.
B) debit Cash and credit Wages Expense.
C) debit Wages Expense and credit Wages Payable.
D) no entry is required.

Question 34

The column totals of the combination journal for Davis Manufacturing are: Cash Debit, $1,500; Cash Credit, $1,328.50; General Debit, $868.20; General Credit, $1,300. If the totals are correct, and the Wages Expense is the only other column, what must be the total of the Wages Expense Debit column?

A) $171.50
B) $260.30
C) $431.80
D) $1,039.70

Question 35

If a business records revenues when earned, regardless of whether cash has been received, and records expenses when they are incurred, the accounting system is a(n)

A) accrual basis of accounting.
B) cash basis of accounting.
C) modified cash basis of accounting.
D) revenue basis of accounting.

Question 36

Which of the following is the proper sequence for end-of-the-month work with the combination journal?

A) complete the individual postings, total and rule the columns, prove the journal, complete the summary postings
B) prove the journal, total and rule the columns, complete the individual posting, complete the summary postings
C) total and rule the columns, complete the individual postings, complete the summary postings, prove the journal
D) total and rule the columns, complete the summary postings, complete the individual postings, prove the journal

Question 37

Under the modified cash basis of accounting, no accounts receivable are entered in the accounting system.

Question 38

From the combination journal, the total of the Cash Debit column is posted as one amount to the debit side of the Cash account and the total of the Cash Credit column is posted as one amount to the credit side of the Cash account.

Question 39

When an individual entry is posted from the combination journal to a ledger account, what information is entered in the "Post. Ref." column of the combination journal?

A) the letters "CJ"
B) the letters "CJ" and the page number
C) the letters "CJ" and the invoice number
D) the account number

Question 40

Accounting for revenue when no entry of revenue is made in the accounts until cash is received for the services performed is called

A) matching basis revenue.
B) cash basis expense.
C) service basis accounting.
D) modified cash basis.

Question 41

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
The column in the combination journal used to enter the account titles for the General Debit and General Credit columns, to identify specific creditors when assets are purchased on account, and to identify amounts forwarded.

Question 42

End-of-period activities include all of the following EXCEPT

A) adjusting entries.
B) closing entries.
C) a work sheet.
D) appointment records.

Question 43

The end-of-period work sheet is used to facilitate

A) preparing financial statements.
B) posting the special journal.
C) updating appointment records.
D) recording transactions in the general ledger.

Question 44

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
A journal with special and general columns.

Question 45

The amounts in the general columns of the combination journal should be posted

A) daily.
B) weekly.
C) at the end of the accounting period.
D) whenever there is time.

Question 46

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
The column in the combination journal used to debit accounts that are used infrequently.

Question 47

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
A method of accounting that combines aspects of the cash and accrual methods. It uses the cash basis for recording revenues and most expenses. Exceptions are made when cash is paid for assets with useful lives greater than one accounting period.

Question 48

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
A method of accounting under which revenues are recorded when earned and expenses are recorded when incurred.

Question 49

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
The column in the combination journal where the account number is entered after posting.

Question 50

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
Columns in journals for frequently used accounts.

Question 51

A cash balance may be computed

A) daily.
B) weekly.
C) at the end of the accounting period.
D) whenever desired.

Question 52

Match the terms with the definitions.a.accrual basis of accounting
b.combination journal
c.Description column
d.General Credit column
e.General Debit column
f.modified cash basis
g.Posting Reference column
h.special columns
The column in the combination journal used to credit accounts that are used infrequently.

Question 53

Once an amount has been posted to the general ledger account from the combination journal, what is entered in the "Post. Ref." column of the combination journal?

A) the abbreviation "CJ"
B) your initials
C) a check mark
D) the account number

Question 54

Once the total of a special column has been posted, what is written under the total of the column in the journal?

A) a check mark
B) the account number
C) the abbreviation "CJ"
D) the date