Chapter 4 Auding your Understanding Accounting

List the four parts of a journal entry.

-Date -Debit -Credit -Source Document

List the five steps to rule a journal at the end of a month.

1 Rule a single line across all amount columns directly below the last entry. 2 On the next line, write the date. 3 Write the words "Carried Forward" in the column. Also post a check mark in the Post. Ref. column. 4 Write each column total below the single line. 5 Rule double lines below the column totals across all amount columns.

List the three steps for proving a journal

1 add each of the amount columns. 2 add the debit column totals together and the credits as well. 3 verify the total of debits and credits are equal.

Which journal columns are used to record buying supplies on account?

Both General

Which journal columns are used to record paying cash to owner for personal use?

Cash and General

Which journal columns are used to record receiving cash on account?

Cash and General

Which journal columns are used to record receiving cash from sales?

Cash and Sales credit

State the formula for proving cash.

Cash on hand at the beginning of the month plus total cash recieved during the month equals total minus total cash paid during the month equals cash balance at the end of the month which should equal the checkbook balance on the next unused check stub.

In what order are transactions recorded in a journal?

Chronological order

Which journal columns are used to record paying cash for an expense?

General and Cash

Which journal columns are used to record paying cash for insurance?

General and Cash

Which journal columns are used to record paying cash on account?

General and Cash

Which journal columns are used to record sales on account?

Sales Credit and General

Why are source documents important?

Source documents verify the accuracy of a specific journal entry