Question 1

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 the total of the Wages Expense Debit column, we need to use the equation: 
Wages Expense Debit = Total Debits – Total Credits 
Substituting the given values: 
Wages Expense Debit = (Cash Debit + General Debit) – (Cash Credit + General Credit) 
Wages Expense Debit = ($1,500 + $868.20) – ($1,328.50 + $1,300) 
Wages Expense Debit = $2,368.20 – $2,628.50 
Wages Expense Debit = -$260.30 
Since the answer is negative, it means that there has been an error in the journal. To balance the journal, we need to add $260.30 to the Wages Expense Debit column. Hence, the correct answer is B.

Question 2

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

Accepted Answer

Cash is an asset account, and asset accounts are not updated until the end of the accounting period.

Question 3

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

Accepted Answer

The debits and credits to Cash in the combination journal are typically posted at the end of the accounting period to summarize and reflect the total cash movements within the period.

Question 4

Professional service business enterprises include the following businesses EXCEPT

Accepted Answer

The three options listed (accounting, dentistry, medicine) all involve providing professional services to clients/customers, whereas real estate involves the buying, selling, and renting of properties. While real estate agents may provide guidance and advice to clients, it is not considered a traditional professional service like the other options listed.

Question 5

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 6

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 7

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

Accepted Answer

Under the modified cash accounting method, transactions are recorded when cash is paid or received, or when a liability is incurred or settled. Purchases of assets on account constitute incurring a liability, so an entry is required. The transaction would be recorded by debiting the asset account (e.g. Equipment) and crediting the Accounts Payable account.

Question 8

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 9

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 given scenario describes the accrual basis of accounting, where revenues and expenses are recognized when they are earned and incurred, respectively, regardless of the cash flow. This method provides a more accurate representation of the financial performance of a business than the cash basis of accounting, where revenues and expenses are recorded only when cash is received or paid. The other options, modified cash basis of accounting and revenue basis of accounting, are not commonly used accounting methods.

Question 10

A journal with special and general columns is called a

Accepted Answer

A combination journal is designed to include both special and general columns, allowing for the recording of various types of transactions in a more organized manner.

Question 11

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 usually indicates that the amount is not posted individually.

Question 12

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 described in the question is called modified cash basis accounting, where revenue is recognized only when cash is received instead of at the time when the service is performed. This approach is similar to the cash basis of accounting, but with minor adjustments to reflect accrual accounting principles. Options A, B, and C are not relevant to the specific scenario described in the question.

Question 13

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

The definition provided matches the characteristics of a professional service enterprise, where the main source of revenue comes from providing services to clients, such as legal or accounting services, consulting, or healthcare. The other options are not a good fit since they are related to buying and selling goods (mercantile and retail enterprises) or producing tangible goods (manufacturing enterprise).

Question 14

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 15

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 is coming from the combination journal, as well as the page number where the entry was taken from. This helps to trace back the original source of the entry when necessary. Including the invoice number or year is not necessary or relevant for this column.

Question 16

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 17

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

Accepted Answer

In accounting, the total of the Cash Debit column is posted as one amount to the debit side of the Cash account in the ledger, and the total of the Cash Credit column is posted as one amount to the credit side of the Cash account, reflecting increases and decreases in cash respectively.

Question 18

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 it is a current asset account that can be easily tracked and reconciled.

Question 19

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 posted from the General Debit column in the combination journal to the proper general ledger account. The General Credit column is also used for posting entries, but it is not listed as an option in the question. The Post.Ref. column and Date column are used for reference and identification purposes, while the Cash Credit column is used for recording cash transactions only.

Question 20

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

Accepted Answer

The total of the General Debit and Credit column should not be posted to any ledger account. This column is used to calculate the balance of the journal entries and is not a transaction in itself that affects a specific account.

Quiz 10: Module Accounting For A Professional Service Business The Combination Journal