Accounting Study Guide

Posting is the process of transferring information from the journal to the trial balance.

False

The trial balance proves the equality of debits and credits.

False

When recording a transaction in a journal, the account listed first is always the

debit

Posting is performed by transferring information from the journal to the

ledger

To correct an error made in the journal (prior to posting in the ledger)

line out the incorrect portion of the entry and write in the correction

Revenue is traditionally recognized in the accounting records when

services are rendered

The proper format for a journal entry includes all of the following, except

the credit portion of the transaction is always first

The purpose of posting is to:

update the account balances in the ledger

The posting reference column in the ledger is:

used to record the journal and page number the transactions originated

The process that begins with recording business transactions into a journal and ends with a post-closing trial balance.

Accounting Cycle

The period of time for which an income statement is prepared.

Accounting Period

The 12-month period a business chooses for its accounting year that runs from January to December.

Calendar year

If the debit and credit totals of a trial balance are not equal, it could be due to the following type of error?

Correct answer: Incorrectly calculating the debit side of the trial balance

Adding to the PR column of the journal that account number of the ledger account that was updated from the journal.

Cross Referencing

An accounting period that runs for any 12 consecutive months.

Fiscal year

A listing of business transactions in chronological order.

General Journal

How are credits distinguished from debits in the journal?

Indenting

Business transactions are first recorded in the

Journal

The process of recording a transaction entry into the journal.

Journalizing

The transferring, copying, or recording of information from a journal to a ledger.

Posting

The informal listing of the ledger accounts and their balances in the ledger to aid in providing the equality of debits and credits is the journal

Trial Balance

An informal listing of the ledger accounts and their balances in the ledger to aid in proving the equality of debits and credits.

Trial balance

A running balance is maintained in the ledger after each transaction is posted.

True

The order of the flow of accounting data is to (1) record in a journal, (2) post in a ledger, (3) prepare a trial balance.

True

The time period for which an income statement is prepared is called the accounting period

True

The trial balance listing is in the same order as the chart of accounts.

True

Transactions are listed in chronological order in the journal.

True

The proper sequence used in recording a business transaction is

analyze, journalize, post, record the balance, and the reference column