Accounting: Chapter3 and Chapter 4 Review
*Journalizing:
recording transactions in a journal
Memorandum:
a form on which a brief message is written describing a transaction
Ledger:
a group of accounts
General Amount Column:
a journal amount column that is not headed with an account title
*General Ledger:
a ledger that contains all accounts needed to prepare financial statements
Sales Invoice:
an invoice used as a source document for recording a sale on account
Entry:
information for each transaction recorded in a journal
When is a correcting entry necessary?
A correcting entry is necessary if a mistake is found after being both journalized and posted.
Why are source documents important?
A source document proves that a transaction did occur.
Under what conditions will an account balance be a credit?
An account balance will be a credit when the credit amount exceeds the debit amount.
Separate amounts in general amount columns are not posted individually. (are)
False
Separate amounts in special amount columns are posted individually. (are not)
False
TechKnow Consulting arranges expense accounts in chronological order in its general ledger. (alphabetical)
False
The cash amount is the first asset account and is numbered 100. (110)
False
The last two digits in a 3 - digit account number indicate the general ledger division. (the location of each account within a general ledger division)
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 source document for all cash payment is a sale invoice. (check not sales invoice)
False
The totals of special amount columns in a journal are not posted. (are)
False
List the two steps for opening an account.
In order to open an account, you need the account title and account number.
Are the totals of the General Debit and General Credit columns posted? Why or why not?
No, the amounts are posted individually.
Which columns totals of a journal are posted?
Sales Credit, Cash Debit/Credit
A check mark in parentheses below a General Debit column total indicates that the total is not posted.
True
A receipt is the source document for cash received from transactions other than sales.
True
Double lines across column totals mean that the totals have been verified as correct.
True
Examples of source documents include checks, sales invoices, memorandums, receipts, and calculator tape.
True
The Objective Evidence accounting concept requires that there be proof that a transaction did occur.
True
The source document used when supplies are bought on account is a memorandum.
True
To correct an error in a journal, draw a line through incorrect item and write it correctly above.
True
To prove a journal page, the total debit amounts are compared with the total credit amounts to be sure they are equal.
True
With the exception of the totals lines, the Post. Ref. column is completely filled in with either an account number or a check mark.
True
*Receipt:
a business form giving written acknowledgement for cash received
*Check:
a business form ordering a bank to pay cash from a bank account
Source Document:
a business paper from which information is obtained for a journal entry
Special Amount Column:
a journal amount column headed with an account title
*Correcting Entry:
a journal entry made to correct an error in the ledger
*Proving Cash:
determining that the amount of cash agrees with the accounting records
*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
Double - Entry Accounting:
the recording of debit and credit parts of a transaction
*Posting:
transferring information from a journal entry to a ledger account
Opening an Account:
writing an account title and number on the heading of an account
