Identifying Accounting Terms, Concepts and Practice

200

Liabilities

Accounting 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

300

Owner's Equity

500

Expense

Ledger

A group of accounts

General Ledger

A ledger that contains all accounts needed to prepare financial statements

Correcting Entry

An additional journal entry made to correct an incorrect journal entry

100

Asset

Proving Cash

Determining that the amount of cash agrees with the balance of the cash account in the accounting records

Delgado Web Services arranges expense accounts in chronological order in its general ledger

False

Errors discovered before entries are posted must be corrected with a correcting entry

False

If a credit is posted to a liability account, the amount of the credit will be subtracted from the previous account balance to determine the new account balance

False

If a debit is posted to an asset account, the amount of the debit will be subtracted from the previous account balance to determine the new account balance

False

If the payment of cash for rent was journalized and posted in error as a debit to Miscellaneous Expense instead of Rent Expense, the correcting entry will include a credit to Cash.

False

The first digit of account numbers for accounts in the owner's equity ledger division is 4

False

The last two digits in a 3-digit account number indicate the general ledger division of the account

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 two steps for opening an account title are writing the account title and recording the balance

False

The asset division accounts for Delgado Web Services are numbered in the 200s

False The 100s

400

Revenue

Posting

Transferring information from a journal entry to a ledger account

After a journal has been posted, the Post. Ref. column is completely filled in with account numbers

True

All corrections for posting errors should be made in a way that leaves no question as to the correct amount.

True

Because an account form has columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form

True

Each amount in the Debit and Credit columns of a general journal is posted to the account written in the Account Title column.

True

If an error in posting is made but not discovered until additional posting have been made to the account, the correct posting should be made on the next available line in the correct account

True

If an error requires a correcting entry, a memorandum is prepared as the source document describing the correction to be made.

True

If an incorrect amount is posted in an account, a line should be drawn through the incorrect amount, the correct amount should be written in above the correction, and the account balance should be recalculated

True

The cash account for Delgado Web Services is the first asset account and is numbered 110

True

The third division of the chart of accounts for Delgado Web Services is the owner's equity division

True

There are five steps in posting an amount from the debit column of a general journal

True

When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515

True

What are the five steps in posting an amount from the credit column of a general journal?

Write the date, Write the journal number, Write the credit amount, Write the new account balance and Return to the journal and write the account number

What are the five steps in posting an amount from the debit column of a general journal?

Write the date, Write the journal number, Write the debit amount, Write the new account balance and Return to the journal and write the account number

Opening An Account

Writing an account title and number on the heading of an account