Century 21 Accounting - Chapter 3

Receipt

A business form giving written acknowledgement for cash received. A source document for cash received from transactions other that sales.

Check

A business form ordering a bank to pay cash from a bank account. A source document that provides proof of a cash payment.

Source document

A business paper from which information is obtained for a journal entry.

Invoice

A form describing the goods or services sold, the quantity, and the price. A bill

Journal

A form for recording transactions in chronological order.

Memorandum

A form on which a brief message is written describing a transaction.

Sales invoice

An invoice used as a source document for recording a sale on account.

A transaction recorded in a journal is not considered a permanent record.

False

Every business uses the same journal to record transactions.

False

The accounting concept Unit of Measurement is being applied when a source document is prepared for each transaction.

False

The journal columns used to record receiving cash from the owner as an investment are Cash Debit and Sales Credit.

False

To correct an error in a journal one can simply erase the incorrect item and write the correct item.,

False

When an entry in an amount column is an even dollar amount either "00" or "--" can be entered in the cents column.,

False

Entry

Information for each transaction recorded in a journal.

Journalizing

Recording transactions in a journal.

Objective Evidence

The GAAP accounting concept that requires that a source document is prepared as proof that a transaction did occur.

Double-entry accounting

The recording of debit and credit parts of a transaction.

A complete journal entry consists of the date the debit amount, the credit amount, and a source document.,

True

A receipt is the source document for cash received from transactions other than sales.

True

Cash is always proved at the end of a month.

True

Double lines are ruled across a journal's amount columns to indicate that the totals have been verified as correct.

True

In double-entry accounting each transaction affects at least two accounts.

True

The source document for all cash payments is a check.

True

The source document used when supplies are bought on account is a memorandum.

True

Transactions are recorded in a journal in chronological order.

True