Deck 4: The General Journal and the General Ledger

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

The ____________________ is a chain of references that makes it possible to trace information about transactions through the accounting process.

Question 6

A description should accompany each entry made in the ____________________ journal.

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

The number of the journal page is recorded in the Posting Reference column of the ledger account to indicate that the total debits equal total credits.

Question 12

A journal is referred to as a record of ____________________ entry.

Question 13

Transactions are entered in the journal in chronological order.

Question 14

Posting references are part of the audit trail.

Question 15

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 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

The number of the ____________________ is recorded in the Posting Reference column of the journal.

Question 22

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

Question 23

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

Question 24

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

Question 25

The journal entry to record the payment of a monthly utility bill would include

A) a debit to Utilities Expense and a credit to Capital.
B) a debit to Capital and a credit to Cash.
C) a debit to Utilities Expense and a credit to Cash.
D) a debit to Utilities Expense and a credit to Accounts Payable.

Question 26

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

Question 27

The ledger is referred to as the record of ____________________ entry.

Question 28

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

Question 29

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

Question 30

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

Question 31

The printed forms used for accounts appear on separate sheets in a book or a binder called a(n) ____________________.

Question 32

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

Question 33

The effects of each transaction are recorded in a financial record called a(n) ____________________.

Question 34

When an entry is made in the general journal,

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

Question 35

Which of the following statements is not correct?

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

Question 36

Posting is the ____________________ step in the accounting cycle.

Question 37

If a transaction is properly analyzed and recorded,

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

Question 38

When an entry is made in the general journal,

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

Question 39

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

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

Question 40

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 41

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

A) ledgers
B) source documents
C) debit entries
D) accounts

Question 42

The first place a transaction is recorded is in the:

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

Question 43

The process of transferring the data from the journal into the ledgers is called:

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

Question 44

The owner of the business would like to see the debit and credit entry for a specific transaction, he would look in

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

Question 45

Which of the following statements is correct?

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

Question 46

Which of the following statements is correct?

A) The general ledger contains the accounts that are used to prepare the financial statements.
B) Some companies use the general ledger instead of a general journal.
C) 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.
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 47

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

Question 48

Which of the following statements is correct?

A) For every transaction recorded in the general journal, the year, month, and day on which the event occurred are written in the Date column.
B) When a transaction is journalized, the total of the amounts debited must equal the total of the amounts credited.
C) Journalizing transactions is the last step of the accounting cycle.
D) The general journal cannot accommodate every type of transaction that a business may have.

Question 49

The journal entry to record $2,450 of revenue earned and received in cash by Agatha Panthis Landscape Architect Company is:

A) Debit Fees Income; Credit Accounts Receivable
B) Debit Cash; Credit Fees Income
C) Debit Fees Income; Credit Cash
D) Debit Accounts Receivable; Credit Fees Income

Question 50

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

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

Question 51

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

Question 52

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

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

Question 53

The journal entry to record the payment of salaries should include

A) a debit to Salaries Expense and a credit to Cash.
B) a debit to Capital and a credit to Cash.
C) a debit to Cash and a credit to Salaries Expense.
D) a debit to Salaries Expense and a credit to Accounts Payable.

Question 54

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

Question 55

The Posting Reference column of a journal is used to

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

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 Cash for $100.
B) a debit to Equipment for $500, a credit to Cash for $100, and a credit to Accounts Payable for $400.
C) a debit to Equipment 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 general ledger accounts are usually arranged in the following order:

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

Question 58

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

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

Question 59

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

Question 60

A purchase of office equipment for $380 cash is journalized as:

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

Question 61

The accounts with identification letters for Able Delivery Services are listed below. During January, the company completed the transactions listed below. Indicate the appropriate journal entry that needs to be recorded for each transaction by providing the account letter and amount. Some entries may need more than one debit and/or more than one credit. The first transaction is completed as an example.

Question 62

Antonio Baldez operates a delivery service. During the month of April, the firm had the following transactions. Record these transactions on page 5 of a general journal. Omit the descriptions.

Question 63

Indicate how each of the following would be reflected in the journal entry required to record the effects described by using debit or credit to indicate the increase or decrease in each affected account.

Question 64

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

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

Question 65

The accounts with identification letters for Smart Delivery Services are listed below. During the current month, the company completed the transactions listed below. Indicate the appropriate journal entry that needs to be recorded for each transaction by providing the account letter and amount. Some entries may need more than one debit and/or more than one credit. The first transaction is completed as an example.

Question 66

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

Question 67

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

A) the incorrect items should be erased and replaced with the correct data.
B) 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.
C) a correcting entry should be journalized and posted.
D) 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.

Question 68

Maria Sanchez operates a typing service. During the month of July, the first month of operations, the firm had the following transactions. Record these transactions on page 5 of a general journal. Omit the descriptions.

Question 69

The accounts with identification letters for Orly Delivery Services are listed below. During the current month, the company completed the transactions listed below. Indicate the appropriate journal entry that needs to be recorded for each transaction by providing the account letter and amount. Some entries may need more than one debit and/or more than one credit. The first transaction is completed as an example.

Question 70

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

Question 71

Indicate how each of the following would be reflected in the journal entry required to record the effects described by using debit or credit to indicate the increase or decrease in each affected account.

Question 72

Determine the accounts and amounts to be debited and credited for the following transactions for Monroe's Auto Repair.
A. Marilyn Monroe invested $50,000 in cash to start the firm
B. Issued check for $4,000 to pay the rent for current month
C. Purchased an automobile that will be used to visit clients; issued check for $32,500 in full payment
D. Purchased supplies for $800; paid immediately by check
E. Purchased office equipment for $18,500 on credit from Denton, Inc.; received invoice, payable in 30 days
F. Performed services for $2,580 in cash
G. Returned damaged supplies for a cash refund of $50
H. Issued check for $15,600 to Denton, Inc., as payment on account
I. Paid $120 for monthly telephone bill by check
J. Withdrew $500 in cash for personal expenses

Question 73

The accounts with identification letters for Sealy Delivery Services are listed below. During the current month, the company completed the transactions listed below. Indicate the appropriate journal entry that needs to be recorded for each transaction by providing the account letter and amount. Some entries may need more than one debit and/or more than one credit. The first transaction is completed as an example.

Question 74

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

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

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

Question 77

Determine the accounts and amounts to be debited and credited for the following transactions for Folk Furniture Repair.
A. Issued a check for $950 to pay the monthly rent.
B. Purchased $130 worth of supplies on credit.
C. The owner made an additional investment of $5,000 in cash.
D. Sent a $75 check to the utility company to pay the monthly bill.
E. Performed services for cash in the amount of $1,200.
F. Provided services on credit in the amount of $800.
G. Purchased new equipment for $300 and paid for it immediately by check.
H. Issued a $1,000 check to pay a creditor on account.
I. Collected $500 from credit customers.

Question 78

Indicate how each of the following would be reflected in the journal entry required to record the effects described by using debit or credit to indicate the increase or decrease in each affected account.

Question 79

Determine the accounts and amounts to be debited and credited for the following transactions for Madison's Clock Repair.
A. Purchased new equipment for $1,700 by issuing a check for $1,000 as a down payment with the balance due in 30 days.
B. Issued checks for $2,400 to pay the employees their monthly salaries.
C. Issued a check for $700 to pay a creditor on account.
D. Purchased supplies for $200 cash.
E. Provided services for $6,800 on credit.
F. Returned damaged supplies and received a $50 cash refund.
G. Issued a check for $100 to pay the monthly telephone bill.

Question 80

Which of the following statements is correct?

A) All errors made in journal entries should be corrected by the preparation of a correcting journal entry.
B) 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.
C) 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.
D) 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.