Pa postquiz chap 2

The final step in the recording process is to

• Analyze each transaction

• Enter the transaction in a journal

• Prepare a trial balance

• Transfer journal information to ledger accounts

Answer explanation

1. Analyze each transaction for its effects on the accounts.

2. Enter the transaction information in a journal.

3. Transfer the journal information to the appropriate accounts in the ledger

When two accounts are required in one journal entry, the entry is referred to as a

• Balanced entry

• Simple entry

• Posting

• Nominal entry

Another name for a journal is

• Listing

• Book of original entry

• Book of accounts

• Book of source documents

Answer explanation

- The journal is referred to as the book of original entry.

- A general journal: basic form of journal

The standard format of a journal would not include

• A reference column

• An account title column

• A T-account

• A date column

Transactions in a journal are initially recorded in

• Account number order

• Dollar amount order

• Alphabetical order

• Chronological order

Answer explanation

- The journal makes several significant contributions to the recording process:

• It discloses in one place the complete effects of a transaction.

• It provides a chronological record of transactions.

• It helps to prevent or locate errors because the debit and credit amounts for

each entry can be easily compared.

A journal is not useful for

• Disclosing in one place the complete effect of a transaction

• Preparing financial statements

• Providing a record of transactions

• Locating and preventing errors

A complete journal entry does not show

• The date of the transaction

• The new balance in the accounts affected by the transaction.

• A brief explanation of the transaction

• The accounts and amounts to be debited and credited

Answer explanation

A complete entry consists of

(1) the date of the transaction

(2) the accounts and amounts to be debited and credited

(3) a brief explanation of the transaction.

The name given to entering transaction data in the journal is

• Chronicling

• Listing

• Posting

• Journalizing

Answer explanation

Steps in the Recording Process

1. Analyze each transaction for its effects on the accounts.

2. Enter the transaction information in a journal.

3. Transfer the journal information to the appropriate accounts in the ledger

The standard form of a journal entry has the

• Debit account entered first and indented

• Credit account enter first and indented

• Debit account entered first at the extreme left margin

• Credit account entered first at the extreme left margin

When journalizing, the reference column is

• Left blank

• Used to reference the source document

• Used to reference the journal page

• Used to reference the financial statements,

Answer explanation

1. The date of the transaction is entered in the Date column.

2. The debit account title is entered first at the extreme left margin of the

column headed “Account Titles and Explanation,” and the amount of the

debit is recorded in the Debit column.

3. The credit account title is indented and entered on the next line in the

column headed “Account Titles and Explanation,” and the amount of the

credit is recorded in the Credit column

4. A brief explanation of the transaction appears on the line below the credit

account title.

5. The column titled Ref. (which stands for Reference) is left blank when the

journal entry is made. This column is used later when the journal entries are

transferred to the ledger accounts.

- It is important to use correct and specific account titles in journalizing.