Accounting Chapter 4

False

A list of all the accounts used by a business is called a balance sheet.

False

All transactions must be posted after preparing a trial balance.

False

An account in the chart of accounts is assigned a number at random.

True

Copies of sales tickets or sales invoices issued to customers or clients provide information about sales of goods or services.

False

Entering transactions in a journal is called posting.

True

Source documents provide the input for the accounting process.

True

The flow of data through the accounting information system includes analyzing transactions, journalizing, posting, and preparing a trial balance.

True

The journal provides the information needed to transfer the debits and credits to the accounts in the ledger.

True

The purpose of a journal is to provide a chronological record of all transactions completed by the business.

True

The purpose of a trial balance is to prove that the totals of the debit and credit balances in the ledger accounts are equal.

False

To make the posting process easier, posting reference entries are made at the same time that transactions are entered in the two-column journal.

False

Transactions which do not affect the cash account do not need to be entered in the journal, since they do not affect net income or loss.

False

When entering titles of accounts in the two-column journal, the account to be credited is entered first and the account to be debited is entered second.

False

When the trial balance indicates that the ledger is in balance, you can assume every account reflects the proper and correct balance.

False

You should always enter information about a transaction in the ledger accounts first, before entering the information in the journal.