Question 1

The proper format for a journal entry includes all of the following, except:

Accepted Answer

The credit portion of the transaction is not always first in a journal entry. The order depends on the type of transaction and the accounts involved. In some cases, the debit portion may come first. The other options (A, B, and D) are all correct requirements for the proper format of a journal entry.

Question 2

The trial balance listing is in the same order as the chart of accounts.

Accepted Answer

A trial balance is a list of all the accounts in the general ledger with their balances. It is usually prepared at the end of an accounting period to ensure that the total debits equal the total credits. The trial balance listing is typically in the same order as the chart of accounts to make it easier to compare and verify the account balances.

Question 3

Which of the following accounts would be credited in a proper journal entry?

Accepted Answer

In a proper journal entry, every debit entry must be accompanied by a credit entry of the same amount. Therefore, if Service Fees account is increased, it must be credited to balance the entry. Option A is incorrect as cash would be debited when it is increased. Option C is incorrect as Capital account would be credited when it is increased. Option D is incorrect as Accounts Payable would be credited when it is increased.

Question 4

The trial balance:

Accepted Answer

The trial balance includes all accounts with a balance in the ledger, which consists of assets, liabilities, capital, withdrawals, revenues, and expenses. Its purpose is to ensure that debits and credits are equal to each other. Therefore, option D, which states that all of the above choices are correct, is the best choice.

Question 5

Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means:

Accepted Answer

The statement "Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger" only means that the total debit dollar amount is equal to the total credit dollar amount. It does not guarantee the accuracy of individual account balances or that all information from the journal was correctly transferred to the ledger.

Question 6

If a trial balance is not equal, you should first:

Accepted Answer

Re-adding the trial balance and calculating the difference will help identify any errors made in recording and posting transactions. This process will also show if there are any errors in adding or subtracting the account balances. Once the difference is known, the next step would be to trace all postings and re-compute ledger balances to identify the source of the error. Looking for missing transactions would be a later step in the process.

Question 7

To correct an error made in the journal (prior to posting in the ledger):

Accepted Answer

Lining out the incorrect portion of the entry and writing in the correction is the appropriate method for correcting an error made in the journal prior to posting in the ledger. This creates a clear audit trail and maintains the original entry for reference purposes. Erasing the error could create confusion and suspicion of tampering, while ignoring the error or writing a new journal entry would not properly correct the mistake.

Question 8

A trial balance is a list of the accounts and account numbers.

Accepted Answer

A trial balance is a list of all the general ledger accounts (both revenue and capital) contained in the ledger of a business at a given point in time, showing the balances of each account, not just the accounts and account numbers.

Question 9

In preparing the trial balance of the K&L's Bridal Service, the Withdrawal account (which had a normal balance in the general ledger)was listed as a credit for $400. What will be the difference between the debit and credit sides of the trial balance?

Accepted Answer

The answer of In preparing the trial balance of the...

Question 10

Which of the following transactions would cause the trial balance to be out of balance?

Accepted Answer

A trial balance will be out of balance if both sides of a transaction are debited or credited, as in option A, where both Cash and Equipment are debited for the same amount. Normally, a transaction should include a debit and a corresponding credit to maintain balance.

Question 11

An $900 check written for supplies was journalized as $180. The entry to correct this error is:

Accepted Answer

The answer of An $900 check written for supplies was...

Question 12

A slide is an error that results when zeros have been added or deleted when writing an amount. Example: 30,000 is written as 3,000.

Accepted Answer

This statement is true. A slide is an error resulting from writing an incorrect amount by adding or deleting zeros.

Question 13

Correctly posting a transaction twice will cause the trial balance totals to be unequal.

Accepted Answer

Correctly posting a transaction twice will not cause the trial balance totals to be unequal because both the debit and credit sides increase by the same amount, maintaining the balance.

Question 14

A slide is evenly divisible by the number 8.

Accepted Answer

A slide is a piece of playground equipment and cannot be divided by numbers.

Question 15

If the trial balance is in balance, it proves that all transactions were properly recorded.

Accepted Answer

A trial balance being in balance only proves that the total debits equal the total credits. It does not guarantee that all transactions were properly recorded, as errors of omission, commission, or principle could still exist.

Question 16

The trial balance proves the equality of debits and credits.

Accepted Answer

The trial balance is a statement that lists all the accounts of a business and their balances. The total debits must equal the total credits, as every transaction affects at least two accounts, with a debit entry on one side and a credit entry on the other side. Therefore, the trial balance proves the equality of debits and credits, and the answer is true.

Question 17

An overpayment was discovered in computing and paying the wages of a Plum Hollow Country Club employee. When the employee returns the amount of the overpayment, Plum Hollow should make which of the following entries?

Accepted Answer

When the employee returns the overpayment, the company receives cash, so Cash is debited. Since the overpayment reduced the actual expense incurred, Wages Expense is credited to correct the previously recorded higher expense.

Question 18

Journalizing a transaction with both the debit and the credit for $75 instead of $57 will cause the trial balance to be out of balance.

Accepted Answer

The trial balance will still balance because the error is a transposition error that affects both sides of the transaction equally, keeping the total debits equal to the total credits.

Question 19

Which of the following errors would cause the trial balance to be out of balance?

Accepted Answer

Option D shows an error of recording an incorrect amount for the cash debit. It should have been $400 instead of $4,000. This would result in a difference of $3,600 between the debit and credit side, causing the trial balance to be out of balance. The other options do not show any errors that would cause the trial balance to be out of balance. Option A and B show errors of recording transactions in the wrong accounts, but the debit and credit amounts are equal. Option C shows an error of omission, but it does not affect the trial balance since no transaction was recorded.

Question 20

When the trial balance includes a debit column total of $10,350 and a credit column total of $11,350, it is probable that:

Accepted Answer

The difference between the debit and credit column totals is $1,000 ($11,350 - $10,350 = $1,000), which indicates that there is a $1,000 imbalance. Since the difference is in favor of the credit column, this means that a debit entry was mistakenly recorded as a credit entry. Therefore, option D is the most probable explanation, where a $500 debit was recorded as a credit.

Quiz 3: Beginning the Accounting Cycle