Chapter 7 Concept Assessment:Accounting
All of the following about a trial balance are true except:
It includes only the permanent accounts
Transposition errors are evenly divisible by the number:
9
Correcting entry
A correcting entry must be made when an error in a journal entry is discovered after posting
Ledger
A ledger is a book or file that contains the pages or cards for the accounts used by a business
Transpostion error
A transposition error results when two totals are accidentally reversed
Trial Balance
A trial balance is a proof of the equality of total debits and total credits
Proving the ledger
Adding all the debit balances and all the credit balances of accounts in the ledger to determine whether the two totals are equal is called proving the ledger
Which of the following steps in the accounting cycle is in the correct order?
Collect and verify source documents, analyze each transaction, journalize each transaction, post to the ledger, and prepare trial balance
The first step in the posting process is to:
Enter the date in the date column of the account debited
A trial balance is prepared before posting
False
All businesses do their posting daily
False
Errors discovered after posting has occurred should be corrected by drawing a like through the incorrect item and writing the correction directly above.
False
Every journal entry requires a posting to at least three ledger accounts
False
Every posting requires the year, month, and day to be entered in the Date column of the ledger account for every transaction.
False
If a transaction is journalized on the 6th, but not posted until the 8th, the date of the posting should be the 8th
False
If the account has a zero balance, it is not necessary to list it on the trial balance
False
If the trial balance is in agreement, there are no errors in the accounting records
False
You can easily see the increases and decreases taking place in the accounts of a business by looking at the general journal entries
False
to avoid forgetting a step in the posting process, always post from right to left
False
Ledger account forms
Ledger account forms are the accounting stationery used to record financial information about specific accounts
if the total debits and total credits of trial balance do not agree, the first step in locating the error is to:
Re-add the debit and credit columns
Posting
The process of transferring the information in a journal entry to an individual account is called posting
A ledger is sometimes called a book of "final entry/original entry"
True
An account may be opened by writing the account title and account number on the account form
True
An example of a transportation error is writing the number 45 when you should of written 54.
True
Every journal entry requires a posting to at least two ledger accounts.
True
Ideally, all businesses should post on a daily basis; however, businesses having few transactions may post only once a week.
True
If you discover an error before posting, a correcting entry is required.
True
Posting is the process of transferring information from the journal to the ledger accounts
True
Posting to the ledger is the fourth step in the accounting cycle
True
The accounts of a business are kept in a book called a ledger
True
The accounts of a business are kept in a special book called a ledger
True
The first step to posting is to write the date of the journal entry in the date column of the account being debited
True
The purpose of a trial balance is to prove the equality of the ledger
True
a line across the debit balance column shows that an asset account has a zero balance
True
Slide
When an amount such as $90 is written as $900, a slide error has occurred
