Deck 4: The Recording Process: the Journal, the Ledger, and the Trial Balance

Question 1

A new account is opened for each transaction entered into by a business firm.

Answer 1

False

Question 2

A simple journal entry requires only one debit to an account and one credit to an account.

Answer 2

True

Question 3

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

Answer 3

False

Question 4

Business documents can provide evidence that a transaction has occurred.

Question 5

In making a journal entry, the debit account and amount should be listed first and indented.

Question 6

Journalizing is the first step in the recording process.

Question 7

Transactions are entered in the ledger accounts and then transferred to journals.

Question 8

The journal provides a chronological record of transactions.

Question 9

The double-entry system is a logical method for recording transactions and results in equal amounts for debits and credits for each transaction.

Question 10

The first three steps in the recording process are: analyze, journalize and post.

Question 11

A compound journal entry requires several debits to one account and several credits to one account.

Question 12

When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

Question 13

A journal is also known as a book of original entry.

Question 14

The complete effect of a transaction on the accounts is disclosed in the journal.

Question 15

The recording process becomes more efficient and informative if all transactions are recorded in one account.

Question 16

Analyzing, journalizing and ledgering are the first three steps in the recording process.

Question 17

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Question 18

The first step in the recording process is to analyze the transaction for its effects on the accounts.

Question 19

Transactions are recorded in alphabetic order in a journal.

Question 20

Journalizing is the process of transferring information from the journal to the ledger.

Question 21

The trial balance will not balance if a purchase on account is mistakenly credited to Notes Payable.

Question 22

On January 14, Maxine Industries purchased supplies of $900 on account. The entry to record the purchase will include

A) a debit to Supplies and a credit to Accounts Payable.
B) a debit to Supplies Expense and a credit to Accounts Receivable.
C) a debit to Supplies and a credit to Cash.
D) a debit to Accounts Receivable and a credit to Supplies.

Question 23

The ledger is merely a bookkeeping device and therefore does not provide much useful data for management.

Question 24

After a transaction has been posted, the reference column in the journal should not be blank.

Question 25

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

Question 26

The chart of accounts is a special ledger used in accounting systems.

Question 27

The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

Question 28

The trial balance will not balance when incorrect account titles are used in journalizing or posting.

Question 29

The chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger.

Question 30

Madrid Industries purchased supplies for $1,200. They paid $500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,200, a credit to a liability account for $700. Which of the following would be the correct way to complete the recording of the transaction?

A) Credit an asset account for $500.
B) Credit another liability account for $500.
C) Credit the Capital account for $500.
D) Debit the Capital account for $500.

Question 31

The trial balance will balance if a purchase of Equipment is mistakenly debited to Supplies.

Question 32

The primary purpose of a trial balance is to prove the mathematical equality of the debits and credits after posting.

Question 33

The trial balance will not balance if a purchase of supplies is charged to Supplies Expense rather than Supplies.

Question 34

Phast Mail Service purchased equipment for $2,000. Phast paid $500 in cash and signed a note for the balance. Phast debited the Equipment account, credited Cash and

A) nothing further must be done.
B) debited the Capital account for $1,500.
C) credited another asset account for $500.
D) credited a liability account for $1,500.

Question 35

All business transactions must be entered first in the general ledger.

Question 36

A complete journal entry includes a brief explanation of the transaction.

Question 37

In making a journal entry, the credit account and amount should be listed first and indented.

Question 38

Posting is the process of proving the equality of debits and credits in the trial balance.

Question 39

A general ledger should be arranged in the order in which accounts are presented in the financial statements, beginning with the balance sheet accounts.

Question 40

The trial balance will not balance if the total of the accounts with debit balances does not equal the total of the accounts with credit balances.

Question 41

Transactions in a journal are initially recorded in

A) account number order.
B) dollar amount order.
C) alphabetical order.
D) chronological order.

Question 42

On July 7, 2022, Rancho Realty Co. performed cash services of $1,900. The journal entry to record this transaction would include

A) a debit to Service Revenue of $1,900.
B) a credit to Accounts Receivable of $1,900.
C) a debit to Cash of $1,900.
D) a credit to Accounts Payable of $1,900.

Question 43

A journal provides

A) the balances for each account.
B) information about a transaction in several different places.
C) a list of all accounts used in the business.
D) a chronological record of transactions.

Question 44

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

A) the company's bank.
B) owner's equity.
C) ledger accounts.
D) financial statements.

Question 45

When two accounts are required in one journal entry, the entry is referred to as a

A) balanced entry.
B) simple entry.
C) posting.
D) nominal entry.

Question 46

When three or more accounts are required in one journal entry, the entry is referred to as a

A) compound entry.
B) triple entry.
C) multiple entry.
D) simple entry.

Question 47

The standard format of a journal would not include

A) a reference column.
B) an account title column.
C) a T-account.
D) a date column.

Question 48

The final step in the recording process is to

A) analyze each transaction.
B) enter the transaction in a journal.
C) prepare a trial balance.
D) transfer journal information to ledger accounts.

Question 49

In recording business transactions, evidence that an accounting transaction has taken place is obtained from

A) business documents.
B) the Internal Revenue Service.
C) the public relations department.
D) the SEC.

Question 50

Another name for a journal is

A) listing.
B) book of original entry.
C) book of accounts.
D) book of source documents.

Question 51

The usual sequence of steps in the transaction recording process is:

A) journal $\rightarrow$ analyze $\rightarrow$ ledger.
B) analyze $\rightarrow$ journal $\rightarrow$ ledger.
C) journal $\rightarrow$ ledger $\rightarrow$ analyze.
D) ledger $\rightarrow$ journal $\rightarrow$ analyze.

Question 52

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

A) cash register sales tape.
B) bill.
C) advertising brochure.
D) check.

Question 53

The usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the

A) journal, and transfer the information to the ledger accounts.
B) ledger, and transfer the information to the journal.
C) book of accounts, and transfer the information to the journal.
D) book of original entry, and transfer the information to the journal.

Question 54

A compound journal entry involves

A) two accounts.
B) three accounts.
C) three or more accounts.
D) four or more accounts.

Question 55

The recording process occurs

A) once a year.
B) once a month.
C) repeatedly during the accounting period.
D) infrequently in a manual accounting system.

Question 56

The final step in the recording process is to transfer the journal information to the

A) trial balance.
B) financial statements.
C) ledger.
D) file cabinets.

Question 57

On July 7, JT Industries purchased supplies of $1,000 for cash. The entry to record the purchase will include

A) a debit to Supplies and a credit to Accounts Payable.
B) a debit to Supplies Expense and a credit to Accounts Receivable.
C) a debit to Supplies and a credit to Cash.
D) a debit to Accounts Receivable and a credit to Supplies.

Question 58

After transaction information has been recorded in the journal, it is transferred to the

A) trial balance.
B) income statement.
C) book of original entry.
D) ledger.

Question 59

The first step in the recording process is to

A) prepare financial statements.
B) analyze each transaction for its effect on the accounts.
C) post to a journal.
D) prepare a trial balance.

Question 60

On May 17, Burchel Industries purchased equipment with a cost of $2,000 on account. The entry to record the purchase will include

A) a debit to Equipment and a credit to Accounts Payable.
B) a debit to Equipment Expense and a credit to Accounts Receivable.
C) a debit to Equipment and a credit to Cash.
D) a debit to Accounts Receivable and a credit to Equipment.

Question 61

Which of the following journal entries is recorded correctly and in the standard format?

Question 62

Posting of journal entries should be done in

A) account number order.
B) alphabetical order.
C) chronological order.
D) dollar amount order.

Question 63

When journalizing, the reference column is

A) left blank.
B) used to reference the source document.
C) used to reference the journal page.
D) used to reference the financial statements.

Question 64

Which of the following is the correct sequence of steps in the recording process?

A) Posting, journalizing, analyzing
B) Journalizing, analyzing, posting
C) Analyzing, posting, journalizing
D) Analyzing, journalizing, posting

Question 65

On June 1, 2022, Ben Casey buys a copier machine for his business and finances this purchase with cash and a note. When journalizing this transaction, he will

A) use two journal entries.
B) make a compound entry.
C) make a simple entry.
D) list the credit entries first, which is proper form for this type of transaction.

Question 66

Able2 Company received a cash advance of $800 from a customer. As a result of this event,

A) assets increased by $800.
B) owner's equity increased by $800.
C) liabilities decreased by $800.
D) assets and owner's equity both increased by $800.

Question 67

Eastman Service Enterprises bills Trait Company for janitorial services rendered. Eastman's journal entry to record the collection of the account will include a credit to

A) Service Revenue.
B) Owner's Capital.
C) Accounts Receivable.
D) Cash.

Question 68

Which of the following is false about a journal?

A) It discloses in one place the complete effects of a transaction.
B) It provides a chronological record of transactions.
C) It helps to prevent or locate errors because debit and credit amounts for each entry can be readily compared.
D) It keeps in one place all the information about changes in specific account balances.

Question 69

Haselhof Company purchases equipment for $2,400 and supplies for $700 from Behrman Co. for $3,100 cash. The journal entry for this transaction will include a

A) debit to Equipment $2,400 and a debit to Supplies Expense $700 for Behrman.
B) credit to Cash for Behrman.
C) credit to Accounts Payable for Haselhof.
D) debit to Equipment $2,400 and a debit to Supplies $700 for Haselhof.

Question 70

Sara Bernheat withdraws $700 cash from her business for personal use. The journal entry for this transaction will include a debit of $700 to

A) Owner's Drawings.
B) Owner's Capital.
C) Owner's Salaries Expense.
D) Salaries and Wages Expense.

Question 71

Beethoven Company provided consulting services and billed the client $3,600. As a result of this event,

A) assets remained unchanged.
B) assets increased by $3,600 and owner's equity decreased by $3,600.
C) owner's equity increased by $3,600 and assets decreased by $3,600
D) assets and owner's equity both increased by $3,600.

Question 72

On October 3, Ken Steele, a carpenter, received a cash payment for services previously billed to a client. Ken paid his telephone bill, and he also bought equipment on credit. For the three transactions, at least one of the journal entries will include a

A) credit to Owner's Capital.
B) credit to Notes Payable.
C) debit to Accounts Receivable.
D) credit to Accounts Payable.

Question 73

A complete journal entry does not show

A) the date of the transaction.
B) the new balance in the accounts affected by the transaction.
C) a brief explanation of the transaction.
D) the accounts and amounts to be debited and credited.

Question 74

Camper Van Company purchased equipment for $2,300 cash. As a result of this event,

A) owner's equity decreased by $2,300.
B) total assets increased by $2,300.
C) total assets remained unchanged.
D) owner's equity decreased and total assets increased by $2,300.

Question 75

The standard form of a journal entry has the

A) debit account entered first and indented.
B) credit account entered first and indented.
C) debit account entered first at the extreme left margin.
D) credit account entered first at the extreme left margin.

Question 76

A journal is not useful for

A) disclosing in one place the complete effect of a transaction.
B) preparing financial statements.
C) providing a record of transactions.
D) locating and preventing errors.

Question 77

The name given to entering transaction data in the journal is

A) chronicling.
B) listing.
C) posting.
D) journalizing.

Question 78

Eastman Service Enterprises bills Trait Company for services rendered. Trait's journal entry to record payment of the account will include a debit to

A) Maintenance Expense.
B) Owner's Capital.
C) Accounts Receivable.
D) Accounts Payable.

Question 79

On August 13, 2022, Accounting Services Co. purchased office equipment for $1,700 and office supplies of $300 on account. Which of the following journal entries is recorded correctly and in the standard format?

Question 80

Jackson Tucker withdraws $2,700 cash from his business for personal use. The journal entry for this transaction will include a credit of $2,700 to

A) Owner's Drawings.
B) Owner's Capital.
C) Owner's Salaries Expense.
D) Cash.