Deck 4: The General Journal and the General Ledger

Question 1

If a journal entry that contains an error has already been posted, a correcting entry should be journalized and posted.

Answer 1

True

Question 2

The journal entry to record the sale of services on credit should include:

A)a debit to Accounts Receivable and a credit to Capital.
B)a debit to Accounts Receivable and a credit to Fees Income.
C)a debit to Cash and a credit to Accounts Receivable.
D)a debit to Fees Income and a credit to Accounts Receivable.

Answer 2

B

Question 3

A ledger account contains a complete record of the individual transaction activity in each account.

Answer 3

True

Question 4

Account names are written in the general journal exactly as they appear in the chart of accounts.

Question 5

Transactions are entered in the journal in chronological order.

Question 6

When an entry is made in the general journal,

A)the accounts to be credited should be indented.
B)liability, capital, and revenue accounts should be indented.
C)asset accounts should be indented.
D)the first account entered should be indented.

Question 7

If an error is discovered before the entry is posted, the incorrect amount can be erased and the correct amount recorded.

Question 8

Transactions are recorded in either a journal or a ledger, but not in both.

Question 9

The balance ledger form always shows the current balance of an account.

Question 10

Transactions in a journal are initially recorded in:

A)chronological order.
B)randomly.
C)dollar amount order.
D)alphabetical order.

Question 11

When an entry is made in the general journal,

A)accounts to be increased should be listed first.
B)assets should be listed first.
C)accounts may be listed in any order.
D)accounts to be debited should be listed first.

Question 12

An amount debited to Cash in a journal entry should be posted as a credit to the Cash account in the ledger.

Question 13

Posting references are part of the audit trail.

Question 14

A journal entry can consist of no more than one account to be debited and one account to be credited.

Question 15

Posting references provide a useful cross-reference when entries must be traced and verified.

Question 16

The revenue accounts come before the expense accounts in the general ledger.

Question 17

Which of the following statements is NOT correct?

A)A firm should be able to trace amounts through the accounting records and back to their source documents.
B)The description of a journal entry should include a reference to the source of the information contained in the entry.
C)The credit portion of a general journal entry is always recorded first.
D)If goods are purchased on credit, the supplier's invoice number is used as the source document for the transaction.

Question 18

When transactions are entered in a general journal, the asset accounts are listed first, followed by the liability and owner's equity accounts.

Question 19

A ledger is sometimes referred to as a record of original entry.

Question 20

When a transaction is entered in a general journal, the first account title is indented about half an inch from the left margin of the Description column.

Question 21

The first place a transaction is recorded is in the:

A)journal
B)trial balance
C)source document
D)general ledger

Question 22

Identify the entry below that records the purchase of office supplies on account.

A)debit Office Supplies Expense; credit Accounts Payable
B)debit Office Supplies; credit Cash
C)debit Accounts Payable; credit Office Supplies
D)debit Office Supplies; credit Accounts Payable

Question 23

Which of the following statements is CORRECT?

A)Accounts being debited should always follow the accounts being credited in a compound entry.
B)Compound entries affect more than one debit and/or more than one credit.
C)All transactions require compound entries.
D)Compound entries include only debits.

Question 24

If the owner of the business wants to see both the debit and credit entry for a specific transaction, he would look in:

A)the journal
B)the source document
C)the chart of accounts
D)the ledger

Question 25

The journal entry to record the payment of salaries for the month is:

A)Debit Cash; Credit Salaries Payable
B)Debit Salaries; Credit Accounts Payable
C)Debit Salaries Expense; Credit Cash
D)Debit Cash; Credit Salaries Expense

Question 26

The journal entry to record the receipt of cash from credit clients would include:

A)a debit to Cash and a credit to Fees Income.
B)a debit to Cash and a credit to Accounts Receivable.
C)a debit to Accounts Receivable and a credit to Cash.
D)a debit to Fees Income and a credit to Cash.

Question 27

The journal entry to record the payment of salaries should include:

A)a debit to Salaries Expense.
B)a credit to Accounts Receivable.
C)a credit to Salaries Expense.
D)a debit to Salaries Payable.

Question 28

If a transaction is properly analyzed and recorded,

A)one asset account will be debited and one liability account will be credited.
B)the total dollar amount debited will equal the total dollar amount credited.
C)only two accounts will be used to record the transaction.
D)one account balance will increase and another will decrease.

Question 29

A purchase of office equipment for cash is journalized as:

A)Debit Office Equipment; Credit Cash
B)Debit Office Equipment; Credit Accounts Payable
C)Debit Equipment Expense; Credit Cash
D)Debit Cash; Credit Office Equipment

Question 30

The process of transferring the data from the journal to the general ledger is called:

A)footing
B)journalizing
C)posting
D)transposing

Question 31

The journal entry to record the payment of the monthly rent would include:

A)a debit to Rent Expense and a credit to Capital.
B)a debit to Rent Expense and a credit to Accounts Receivable.
C)a debit to Capital and a credit to Cash.
D)a debit to Rent Expense and a credit to Cash.

Question 32

Business papers, such as checks, invoices, receipts, letters, and memos, that furnish proof that a transaction has taken place are called:

A)source documents
B)accounts
C)debits
D)ledgers

Question 33

Anna Conda Landscaping service received a bill for the utilities used during September. The bill will be paid in October. The journal entry to record the utility bill received is:

A)Debit Utilities Expense; Credit Accounts Payable
B)Debit Utilities Expense; Credit Cash
C)Debit Accounts Payable; Credit Cash
D)Debit Cash; Credit Utilities Expense

Question 34

In which of the following transactions would Utilities Expense be debited:

A)the company paid a utility bill on account
B)the company received and paid a bill for utilities
C)the company received a bill for utilities to be paid the following month
D)both A and B

Question 35

On July 3, the ABC Company received $865 in cash on account from customers. The correct journal entry to record this transaction is:

A)debit Cash, $865; credit Accounts Receivable, $865
B)debit Accounts Receivable, $865; credit Cash, $865
C)debit Cash, $865; credit Accounts Payable, $865
D)debit Cash, $865; credit Income from Services, $865

Question 36

Agatha Panthis Landscape Architect Company earned $2,500 of revenue collecting $1,000 immediately and will correct the remaining amount in 30 days. The journal entry to record this transaction is:

A)Debit Fees Income $2,500; Credit Cash $1,000; credit Accounts Receivable $1,500
B)Debit Cash $1,000; Debit Accounts Receivable $1,500; Credit Fees Income $2,500
C)Debit Fees Income $2,500; Credit Accounts Receivable $2,500
D)Debit Cash $1,000; Credit Fees Income $1,000

Question 37

The journal entry to record the performance of services for cash would include:

A)a debit to Cash and a credit to Fees Income.
B)a debit to Accounts Receivable and a credit to Cash.
C)a debit to Fees Income and a credit to Cash.
D)a debit to Cash and a credit to Accounts Receivable.

Question 38

When recording a business transaction into the journal, certain steps are followed. Identify the statement below that is CORRECT regarding the journalizing process.

A)All transactions are recorded first in the general ledger and then they are journalized in the journal.
B)An explanation is indented and entered on the line underneath the last credit in the entry.
C)All credited accounts are listed first and then all debited accounts are indented and listed on the next lines.
D)No dates are used in the journal.

Question 39

The journal entry to record a payment made in January for rent for the months of February and March would include:

A)a debit to Rent Expense, and a credit to Sue Snow, Capital.
B)a debit to Sue Snow, Drawing and a credit to Rent Expense.
C)a debit to Rent Expense and a credit to Cash.
D)a debit to Prepaid Rent and a credit to Cash.

Question 40

The journal entry to record the withdrawal of cash by Sue Snow, the owner, to pay a personal utility bill would include:

A)a debit to Utilities Expense and a credit to Cash.
B)a debit to Sue Snow, Drawing and a credit to Cash.
C)a debit to Sue Snow, Capital and a credit to Utilities Expense.
D)a debit to Sue Snow, Capital, and a credit to Cash.

Question 41

The account numbers from the ledger are recorded in the Posting Reference column of the general journal:

A)as the first amount written in the journal.
B)as the transaction is journalized.
C)after each amount is posted.
D)after all entries on the journal page have been posted.

Question 42

Listed below in random order are the steps in the accounting cycle.

(1) prepare the financial statements
(2) post the journal entries to the ledger
(3) record journal entries
(4) prepare a trial balance

What is the proper order of these steps?

A)(3), (2), (1), (4)
B)(2), (3), (4), (1)
C)(4), (3), (2), (1)
D)(3), (2), (4), (1)

Question 43

On December 1, the Accounts Receivable account had a $22,000 debit balance. During December the business earned $10,500 in revenue on account and collected $13,200 from its charge-account customers. After posting these transaction, the balance in the Accounts Receivable account on December 31 is:
A)a $19,300 debit balance.

A)a $24,700 credit balance.
B)a $24,700 debit balance.
D)a $23,700 credit balance.

Question 44

If a journal entry that contains an error has already been posted,

A)the journal need not be corrected but the posting to the ledger should be corrected by crossing out the incorrect data and writing the correct data above it.
B)the incorrect items should be corrected by crossing out the incorrect data and writing the correct data above it in both the journal and the ledger.
C)the incorrect items should be erased and replaced with the correct data.
D)a correcting entry should be journalized and posted.

Question 45

On December 1, the Accounts Receivable account had a $5,000 balance. The business received
$400 during the month from its charge-account customer. After posting this transaction, the new balance in the Accounts Receivable account is:
A)a $4,600 credit balance.

A)a $5,400 debit balance.
B)a $4,600 debit balance.
D)a $5,400 credit balance.

Question 46

The Posting Reference column of a journal is used to:

A)record the number of the ledger account to which the information is posted.
B)record the number of amounts posted to that ledger account since the beginning of the current accounting period.
C)record the page number of the ledger account.
D)record the date on which an amount is posted to a ledger account.

Question 47

The general ledger accounts are usually arranged in the following order:

A)first the temporary accounts, then the permanent accounts.
B)first the accounts with debit balances, then the accounts with credit balances.
C)first the accounts used most often, then those used less frequently.
D)first the balance sheet accounts, then the income statement accounts.

Question 48

On December 10, Yummy Catering purchased a new oven costing $10,000. They issued a check a check for $2,000 and promised to pay the balance in 30 days. The journal entry to record this transaction is:

A)
B)
C)
D)

Question 49

A firm purchased telephone equipment for cash. By mistake, the accountant debited Utilities Expense instead of Office Equipment. The error was discovered after the data posted. The correcting entry should contain:

A)a debit to Utilities Expense and a credit to Cash.
B)a debit to Cash and a credit to Office Equipment.
C)a debit to Office Equipment and a credit to Utilities Expense.
D)a debit to Office Equipment and a credit to Cash.

Question 50

ABC Co. performed $5,000 of consulting work. Their customer paid them $3,500 right away and agreed to pay the balance in 30 days. Select the correct journal entry from the options below to record the transaction:

A)a debit to Cash for $3,500, a debit to Accounts Receivable for $1,500 and a credit to Capital for $5,000.
B)a debit to Cash for $3,500 and a credit to Fees Income for $3,500.
C)a debit to Fees Income for $5,000, a credit to Cash for $3,500 and a credit to Accounts Receivable for $1,500.
D)a debit to Cash for $3,500; a debit to Accounts Receivable for $1,500 and a credit to Fees Income for $5,000.

Question 51

On September 1, Lazy A, Inc. paid $2,200 for a one year insurance policy. The journal entry to record this transaction is:

A)

B)

C)

D)

Question 52

On December 5, Honor Consulting Services issued a check to purchase $1,800 of office equipment. The journal entry to record this transaction is:

A)

B)

C)

D)

Question 53

On June 1, XYZ Inc. paid $400 to its landlord for rent for the current month. The journal entry to record this transaction is:

A)

B)

C)

D)

Question 54

The Accounts Payable account has a $3,000 credit balance. An entry for the payment of $1,000 on the amount owed is recorded and posted. The new balance of the Accounts Payable account is:

A)a $2,000 debit balance.
B)a $1,000 debit balance.
C)a $2,000 credit balance.
D)a $4,000 credit balance.

Question 55

The Cash account has a $15,000 debit balance. A $5,000 credit entry and a $7,000 debit entry are posted to the account. The final balance of the Cash account is:

A)a $17,000 debit balance.
B)a $27,000 debit balance.
C)a $3,000 debit balance.
D)a $13,000 debit balance.

Question 56

The journal entry to record the purchase of equipment for a $100 cash down payment and a balance of $400 due in 30 days would include:

A)a debit to Equipment for $100 and a credit to Accounts Payable for $400.
B)a debit to Equipment for $100 and a credit to Cash for $100.
C)a debit to Equipment for $500, a credit to Cash for $100, and a credit to Accounts Payable for
$400.
D)debit to Equipment for $500 and a credit to Cash for $500.

Question 57

The accounts on the Trial Balance are always listed in the following order:

A)Assets, Liabilities, Equity, Revenue, Expense
B)Assets, Expense, Liabilities, Equity, Revenue
C)Assets, Equity, Expense, Liabilities, Revenue
D)Expense, Revenue, Equity, Liabilities, Assets

Question 58

Which of the following statements is CORRECT?

A)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.
B)The general ledger contains the accounts that are used to prepare the financial statements.
C)Some companies use the general ledger instead of a general journal.
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.

Question 59

When recording a business transaction into the general ledger, certain steps are followed. Identify the statement below that is NOT CORRECT regarding this process.

A)All transactions are recorded first in the general journal and then they are transferred to the general ledger.
B)After posting a transaction, the new balance in an account can be seen in the general ledger.
C)The process of transferring data from the journal to the ledger is called posting.
D)All transactions are recorded first in the general ledger and then they are transferred to the journal.

Question 60

A company purchased equipment costing $15,000. They paid $1,000 right away and agreed to pay the balance in 30 days, the journal entry to record the purchase of equipment would include:

A)a debit to Equipment for $14,000 and a credit to Accounts Payable for $14,000.
B)a debit to Equipment for $15,000 and a credit to Cash for $15,000.
C)a debit to Equipment for $1,000 and a credit to Cash for $1,000.
D)a debit to Equipment for $15,000, a credit to Cash for $1,000 and a credit to Accounts Payable for $14,000.

Question 61

Constantine Corporation reported Net Income for the year ended December 31, 2019, of $23,760 then discovered that the entry to pay the rent for December in the amount of $1,600 was not journalized and posted. What is the Net Income after the correcting journal entry is journalized and posted?

A)$20,560
B)$22,160
C)$25,360
D)$23,760

Question 62

When posting, the ________ is recorded in the Posting Reference column of the journal.

Question 63

Which of the following statements is CORRECT?

A)If an error in a journal entry is discovered before the entry is posted to the general ledger, the entry can simply be erased and replaced with the correct journal entry.
B)If an error in a journal entry is discovered before the entry is posted to the general ledger, the error in the entry should be crossed out and the correct data written above it.
C)If an error in a journal entry is discovered before the entry is posted to the general ledger, a journal entry should be made to correct the erroneous entry.
D)All errors made in journal entries should be corrected by the preparation of a correcting journal entry.

Question 64

Kelly Corporation reported Net Income for the year ended December 31, 2019, of $16,900 then discovered that an entry for revenue earned on December 30, 2019, in the amount of $1,400 had not been journalized and posted. What is the Net Income after the correcting journal entry is journalized and posted?

A)$15,500
B)$16,900
C)$14,100
D)$18,300

Question 65

A permanent, classified record of all accounts used in a firm's operation is called a(n)________.

Question 66

For each of the accounts listed below, enter the words, Increase or Decrease, in the Debit and Credit columns to indicate the effects of each on the account balance. The first row has been completed for reference.

Question 67

For each of the accounts listed below, enter the words, Increase or Decrease, in the Debit and Credit columns to indicate the effects of each on the account balance.

Question 68

Bertrand Inc. performed services for clients in the amount of $1,350 on credit. If this transaction had been posted in error to the Cash account instead of the Accounts Receivable account, what correcting entry would be necessary?

A)Debit Accounts Receivable $1,350; credit Fees Income $1,350
B)Debit Fees Income $1,350; credit Cash $1,350
C)Debit Accounts Receivable $1,350; credit Cash $1,350
D)Debit Cash $1,350; credit Accounts Receivable $1,350

Question 69

The process of transferring data from a journal to a ledger is known as ________.

Question 70

Bertrand Inc. purchased some shop equipment for $4,500 in cash. By mistake, the journal entry debited the Office Equipment account rather than the Shop Equipment account. What correcting entry would be necessary?

A)Debit Shop Equipment $4,500; credit Office Equipment $4,500
B)Debit Cash $4,500; credit Shop Equipment $4,500
C)Debit Office Equipment $4,500; credit Cash $4,500
D)Debit Office Equipment $4,500; credit Shop Equipment $4,500

Question 71

The ________ is recorded in the Posting Reference column of the ledger account.

Question 72

When a transaction is entered in the general journal, the account to be______ is always recorded first in the Description column.

Question 73

The______ is referred to as the record of final entry.

Question 74

A description should accompany each entry made in the ________.

Question 75

For each of the accounts listed below, enter the words, Increase or Decrease, in the Debit and Credit columns to indicate the effects of each on the account balance. The first row has been completed for reference.

Question 76

Notations that allow transactions to be quickly and easily traced from the journal to the ledger or from the ledger to the journal are called ______ references.

Question 77

A journal entry containing more than one debit or more than one credit is called a(n)________ entry.

Question 78

A(n)______ entry is recorded when there is an error in data that has been journalized and posted.

Question 79

The process of recording transactions in a journal is referred to as ________.

Question 80

A ________ is referred to as a record of original entry.