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