If an error is recorded in a journal entry

cancel the error by drawing a neat line through the error

correct the entry by writing the correct item above the canceled error

do not erase the incorrect item

The first step in the posting procedure is writing the

entry date in the Date column of the account

journal page number in the Post. Ref. column of the journal

account number in the Post. Ref. column of the account

entry amount in the Debit or Credit column of the account

The entry to establish a $200.00 petty cash fund is

debit Petty Cash, $200.00; credit Cash, $200.00

debit Petty Cash, $200.00; credit Miscellaneous Expense, $200.00

debit Miscellaneous Expense, $200.00; credit Cash, $200.00

debit Cash, $200.00; credit Petty Cash, $200.00

The first digit in the account number 410 means that the account is in the

Revenue division of the general ledger

Assets division of the general ledger

Liabilities division of the general ledger

Expenses division of the general ledger

The journal entry to close Income Summary when there is a net income is

debit Income Summary; credit owner’s capital

debit Sales; credit Income Summary

debit owner’s capital; credit Income Summary

debit Income Summary; credit Sales

The formula for calculating the net income ratio is

net income divided by total sales

total sales divided by total expenses

total sales minus total expenses divided by net income

The normal balance side of any expense account is

either the debit side or credit side

Define: Accounting System

A planned process designed to compile financial data and summarize the results in accounting records and reports

A financial statement that reports assets, liabilities, and owner’s equity on a specific date

A list of accounts used by a business

A person or business to whom a liability is owed

Define: Balance Sheet

A financial statement that reports assets, liabilities, and owner’s equity on a specific date

A list of accounts used by a business

A person or business to whom a liability is owed

Transferring information from a journal entry to a ledger account

Define: Chart of Accounts

A list of accounts used by a business

A person or business to whom a liability is owed

Transferring information from a journal entry to a ledger account

An increase in equity resulting from the sale of goods or services

A person or business to whom a liability is owed

Transferring information from a journal entry to a ledger account

An increase in equity resulting from the sale of goods or services

A proof of the equality of debits and credits in a general ledger

Transferring information from a journal entry to a ledger account

An increase in equity resulting from the sale of goods or services

A proof of the equality of debits and credits in a general ledger

Reporting income when earned and expenses when incurred

An increase in equity resulting from the sale of goods or services

A proof of the equality of debits and credits in a general ledger

Reporting income when earned and expenses when incurred

Journal entries recorded to update general ledger accounts at the end of a fiscal period

Define: Trial Balance

A proof of the equality of debits and credits in a general ledger

Reporting income when earned and expenses when incurred

Journal entries recorded to update general ledger accounts at the end of a fiscal period

Journal entries used to prepare temporary accounts for a new fiscal period

Define: Accrual Basis of Accounting

Reporting income when earned and expenses when incurred

Journal entries recorded to update general ledger accounts at the end of a fiscal period

Journal entries used to prepare temporary accounts for a new fiscal period

The cost of goods or services used to operate a business

Define: Adjusting Entries

Journal entries recorded to update general ledger accounts at the end of a fiscal period

Journal entries used to prepare temporary accounts for a new fiscal period

The cost of goods or services used to operate a business

A financial statement showing the revenue and expenses for a fiscal period