Accounting 1: Final Exam Review (#2)

If the previous account balance and the current entry posted to an account are both credits, the new account balance is a credit

• true

• false

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 error

• all of these

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

Income Summary is a(n)

• asset account

• liability account

• temporary account

• permanent account

Assets taken out of a business for the personal use of the owner are called

• withdrawals

• net income

• net loss

• investments

The entry to establish a $200 petty cash fund is

• debit Cash, $200; credit Petty Cash $200

• debit Petty Cash $200; credit Cash $200

• debit Miscellaneous Expense, $200; credit Cash $200

• debit Petty Cash $200; credit Miscellaneous Expense

If an amount is recorded on the side of a T account opposite the normal balance side, the account balance is

• increased

• unaffected

• decreased

• correct

On a work sheet, the balance of the owner's drawing account is extended to the

• Income Statement Debit column

• Income Statement Credit column

• Balance Sheet Debit column

• Balance Sheet Credit column

Temporary accounts are used to accumulate information until it is transferred to the owner's capital account

• True

• False

Adjusting entries must be posted to the general ledger accounts

• true

• false