Accounting chapter 4
Purchase invoices received from suppliers provide information about cash payments.
F
A trial balance can only be accurately prepared on the first day of the accounting period before any new transactions have been entered.
F
A complete set of all the accounts used by a business is known as the general ledger
T
A list of all the accounts used by a business is called a trial balance.
T
The process of copying the debits and credits from the journal to the ledger accounts is known as journalizing.
F
The ledger is a reliable source of information only when all of the transactions entered in the journal have been posted.
T
The purpose of a journal is to provide a chronological record of all transactions completed by the business.
T
The purpose of a trial balance is to prove that the totals of the debit and credit balances in the ledger accounts are equal.
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When the trial balance indicates that the ledger is in balance, you can assume there are no errors in the ledger.
T
A two-column journal has only two amount columns--one for the amount of the entry and one for the running balance.
F
An account in the chart of accounts is assigned a number at random.
F
The journal provides the information needed to transfer the debits and credits to the accounts in the ledger.
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Entering the account number in the Posting Reference column of the journal is the first step in the posting process.
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Entering transactions in a journal is called recording.
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In some cases, erasures (erasures mean to erase something...(use a dictionary)) are better for corrections than the ruling method.
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Information about cash receipts can be obtained from check stubs and carbon copies of checks.
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The posting reference, amount, and description are the three items of information about each transaction that should be entered in the ledger accounts.
F
A separate line in the two-column journal should be used for each account title.
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After posting journal information to the ledger accounts, a check mark should be entered in the Posting Reference column of the journal to indicate that the transaction item has been posted.
F
It is permissible to enter information about a transaction in the ledger accounts first, before entering the information in the journal.
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The chart of accounts includes assets, liabilities, and owner's equity accounts only.
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The main advantage of a two-column account is that it maintains a running balance.
F
To make the posting process easier, posting reference entries are made at the same time that transactions are entered in the two-column journal.
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Transactions which do not affect the cash account do not need to be entered in the journal, since they do not affect net income or loss.
F
When entering titles of accounts in the two-column journal, the account to be credited is entered first and the account to be debited is entered second.
F
All transactions must be posted before preparing a trial balance
T
An erasure may suggest that you are hiding something.
T
Copies of sales tickets or sales invoices issued to customers or clients provide information about sales of goods or services.
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Each entry in the journal affects two or more accounts.
T
No entries are made in the Posting Reference column in a two-column journal when journalizing
T
Source documents begin the process of entering transactions in the accounting system.
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Source documents provide objective, verifiable evidence of business transactions.
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Source documents provide the input for the accounting process.
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The Description column of a two-column journal is used to enter the titles of the accounts affected by each transaction, together with a description of the transaction.
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The chart of accounts includes the account titles in numerical order.
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The flow of data through the accounting information system includes analyzing transactions, journalizing, posting, and preparing a trial balance.
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The general ledger is kept to supply management with desired information in summary form.
T
Almost any document that provides information about a business transaction is included in the chart of accounts.
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