Accounting Chapter 4 Study Guide
Ledger
A group of accounts.
Proving cash
Determining that the amount of cash agrees with the balance of the Cash account in the accounting records.
The two steps for opening an account are writing the account title and recording the balance.
False
If an error in posting is made but not discovered until additional postings have been made to the account, the correct posting should be made on the next available line in the correct account.
True
If an error requires a correcting entry, a memorandum is prepared as the source document describing the correction to be made.
True
Correcting entry
An additional journal entry made to correct an incorrect journal entry.
Delgado Web Services arranges expense accounts in chronological order in its general ledger.
False
Errors discovered before entries are posted must be corrected with a correcting entry.
False
If a credit is posted to a liability account, the amount of the credit will be subtracted from the previous account balance to determine the new account balance.
False
If a debit is posted to an asset account, the amount of the debit will be subtracted from the previous account balance to determine the new account balance.
False
If the payment of cash for rent was journalized and posted in error as a debit to Miscellaneous Expense instead of Rent Expense, the correcting entry will include a credit to Cash.
False
The asset division accounts for Delgado Web Services are numbered in the 200s.
False
The first digit of account numbers for accounts in the owner's equity ledger division is 4.
False
The last two digits in a 3-digit account number indicate the general ledger division of the account.
False
The only reason for the Post. Ref. columns of the journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted.
False
Account number
The number assigned to an account.
File maintenance
The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.
Posting
Transferring information from a journal entry to a ledger account.
After a journal has been posted, the Post. Ref. column is completely filled in with account numbers.
True
All corrections for posting errors should be made in a way that leaves no question as to the correct amount.
True
Because an account form has columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form.
True
Each amount in the Debit and Credit columns of a general journal is posted to the account written in the Account Title column.
True
If an incorrect amount is posted in an account, a line should be drawn through the incorrect amount, the correct amount should be written in above the correction, and the account balance should be recalculated.
True
The cash account for Delgado Web Services is the first asset account and is numbered 110.
True
The third division of the chart of accounts for Delgado Web Services is the owner's equity division.
True
There are five steps in posting an amount from the Debit column of a general journal.
True
When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515.
True
Opening an account
Writing an account title and number on the heading of an account.
Expenses Balance Sheet Accounts
(Alphabetical)
Owner's Equity Balance Sheet Accounts
(Alphabetical)
Revenue Balance Sheet Accounts
(Alphabetical)
Assets Balance Sheet Accounts
110 Cash 120 Petty Cash 130 Accounts Receivable 140 Accounts Receivable 150 Supplies 160 Prepaid Insurance
Liabilities Balance Sheet Accounts
210 Accounts Payable
General ledger
A ledger that contains all accounts needed to prepare financial statements.
