Question 1

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

Accepted Answer

The cash balance can be computed at any time during the accounting period, as long as accurate records are being kept of all cash inflows and outflows.

Question 2

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?

Accepted Answer

The "Post. Ref." column in the ledger account should include the letters "CJ" to indicate that the entry came from the combination journal, as well as the page number in the combination journal where the entry can be found. This helps to track back to the original entry and ensures accuracy in recording transactions.

Question 3

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

Accepted Answer

A dash is typically used in accounting to indicate that there is no entry or transaction to report for a specific column or row. In this case, placing a dash in the "Post. Ref." column would indicate that the amount is not posted individually.

Question 4

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

Accepted Answer

Individual entries are usually posted from the General Debit and General Credit columns of the combination journal to the proper general ledger account. The Post. Ref. column is used for reference purposes, the Date column is used to record the date of the transaction, and the Cash Credit column is specific to cash transactions only.

Question 5

A journal with special and general columns is called a

Accepted Answer

A journal with special and general columns is a combination journal as it combines both specific columns for certain transactions and general columns for all other transactions. Option A is incorrect because a general journal does not have special columns. Option C is incorrect because a two-column journal only has debit and credit columns. Option D is also incorrect because a business journal is not a specific type of journal, but rather a term used to refer to any journal used in a business setting.

Question 6

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

Accepted Answer

The General Debit and Credit column totals are not posted to the related ledger accounts because these columns are used for individual transactions that are posted separately, not in total.

Question 7

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

Accepted Answer

The total of the General Debit and Credit column is a summary of all the transactions in the journal and should not be posted to any individual ledger account. Instead, each transaction should be posted to the appropriate ledger account based on its specific account title. The totals of the other columns (Cash Credit, Professional Fees, and Supplies Expense) represent specific accounts and should be posted to their respective ledger accounts.

Question 8

Professional service business enterprises include the following businesses EXCEPT

Accepted Answer

All of the businesses listed are examples of professional service business enterprises, except for real estate. Real estate is typically classified as a real estate or property management business, rather than a professional service.

Question 9

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

Accepted Answer

A professional service enterprise is a type of business where the primary source of revenue is providing services to businesses or individuals. This can include professions such as lawyers, doctors, accountants, or consultants. Mercantile, manufacturing, and retail enterprises all involve selling physical goods as the primary source of revenue.

Question 10

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

Accepted Answer

Under the modified cash accounting method, only transactions involving actual cash receipts or payments are recorded. Purchasing assets on account means that no cash is exchanged at the time of the transaction, but a liability (Accounts Payable) is created. Therefore, the appropriate entry would be to debit the asset (increasing the value on the balance sheet) and credit the liability (creating a record of the amount owed).

Question 11

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

Accepted Answer

The answer of The debits and credits to Cash are...

Question 12

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

Accepted Answer

The answer of The debits and credits to Cash in...

Question 13

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

Accepted Answer

The answer of To record wages earned but not paid...

Question 14

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?

Accepted Answer

To find out the total of the Wages Expense Debit column, we need to use the equation:

Total Debits = Total Credits

We can substitute the given values into the equation:

$1,500 (Cash Debit) + $868.20 (General Debit) + Wages Expense Debit = $1,328.50 (Cash Credit) + $1,300 (General Credit)

Simplifying the equation:

Wages Expense Debit = $1,328.50 + $1,300 - $1,500 - $868.20

Wages Expense Debit = $260.30

Therefore, the total of the Wages Expense Debit column is $260.30, which corresponds to choice B.

Question 15

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)

Accepted Answer

The description given in the question matches the accrual basis of accounting, where revenues are recorded when earned (regardless of when cash is received) and expenses are recorded when incurred (regardless of when cash is paid).

Question 16

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

Accepted Answer

The correct sequence for end-of-the-month work with the combination journal involves completing individual postings first, which ensures all entries are accurately recorded. Next, total and rule the columns to finalize the figures. Then, prove the journal to ensure the debits and credits balance. Finally, complete the summary postings to summarize the period's activities. This sequence ensures accuracy and completeness in the accounting records.

Question 17

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

Accepted Answer

Under the modified cash basis of accounting, accounts receivable are not recorded until they are actually received or paid. Only cash transactions are recorded in the accounting system.

Question 18

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.

Accepted Answer

This is correct. The combination journal summarizes all the cash transactions for a period, and the totals of each column are posted as one amount to the Cash account. The Cash Debit total is posted as a debit, and the Cash Credit total is posted as a credit.

Question 19

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?

Accepted Answer

The "Post.Ref." column in the combination journal is used to indicate the account number to which the entry is posted in the ledger. This helps in tracking and cross-referencing between the journal and the ledger accounts.

Question 20

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

Accepted Answer

The practice of accounting for revenue only when cash is received is known as the modified cash basis. This method is considered a hybrid of the accrual and cash basis methods, as it recognizes revenues when cash is received but still records expenses when they are incurred.

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