Chapter 4 Accounting

Errors discovered after an entry is posted may be corrected by ruling through the item.

false

An additional journal entry made to correct an incorrect journal entry,

correcting 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

The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.

file maintenance

If posting is interrupted, the accounting personnel know to resume posting __________.

on the line with a blank post ref column in the journal

Writing an account title and number on the heading of an account.

opening an account

The procedure for transferring information from a journal entry to a ledger account is __________.

posting

Determining that the amount of cash agrees with the accounting records is __________.

proving cash

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

If the previous account balance and the current entry posted to an account are both debits, the new account balance is a debit.

true

The Cash account is the first asset account and is numbered 110.

true

The account number is placed in the Post. Ref. column of the journal as the last step in the posting procedure.

true

The procedure of arranging accounts in a general ledger, assigning account numbers, and keeping records current is known as file maintenance.

true

The third division of the chart of accounts for Delgado Web Services is the owner's equity division.

true

A ledger that contains all accounts needed to prepare financial statements.

general ledger

Posting references in a journal are __________.

none of these

When posting is complete, the Post. Ref. column in the General Journal is completely filled in with account numbers.

true

The number assigned to an account.

account number

The last step in the posting procedure is to write the __________.

account number in the post ref column of the account

When accounts are arranged in a general ledger, account numbers are assigned, and the chart of accounts is kept up to date, the accounting personnel are __________.

doing file maintenance

The first digit in the account number 520 means that the account is in the_________.

expense division of the general ledger

A journal shows in one place all the changes in a single account.

false

If an error requires a correcting entry, the source document describing the correction to be made__________.

is a memorandum

5. The second step in the posting procedure is to write the __________.

journal page number in the post ref column of the account

A group of accounts.

ledger

A group of accounts is called a ledger.

true

After a journal has been posted, the Post. Ref. column is completely filled in with account numbers.

true

The only use for the Post. Ref. column of a journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted.

false

The posting reference should always be recorded in the journal's Post. Ref. column before amounts are recorded in the ledger.

false

The steps for posting are to write the date, the journal page number, the amount, and the balance.

false

The two steps for opening an account are writing the account title and recording the balance.

false

Transferring information from a journal entry to a ledger account.

posting

Determining that the amount of cash agrees with the balance of the Cash account in the accounting records.

proving cash

An account number in the journal's Post. Ref. column shows __________.

the account to which an amount is posted

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

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

When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515.

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

The cash account for Delgado Web Services is the first asset account and is numbered 110.

true

There are five steps in posting an amount from the Debit column of a general journal.

true