FABM2 Review 2

The debit and credit analysis of a transaction normally takes place at what point in the accounting process?

• Prior to recording the transaction in a journal.

• When the journal entry is posted to the ledger.

• When the trial balance is prepared.

• At some other point in the accounting cycle.

Which of the following is correct regarding the journal?

• The journal is the accounting record where a transaction is initially recorded.

• A journal is a company's record of its daily transactions in chronological order.

• The journal is known as the book of original entry.

• All of these are correct regarding the journal.

The use of computers in processing accounting data

• Eliminates the need for accountants.

• Eliminates the double entry system.

• Eliminates the need for financial reporting standards.

• None of these are correct.

A general journal would have the following columns, except:

• Date of the transaction.

• Place of the transaction.

• Debit column.

• Credit column.

Journalizing is the process of recording transactions from

• Source document to the journal

• Journal to the source document

• Journal to the general ledger

• General ledger to the journal

It is an individual accounting record of the increases and decreases of a specific item.

• Account

• Journal

• Trial balance

• Financial statements

Which of the following is/are true?

I. A purchase of inventory on account can be recorded on the cash disbursement journal.

II. A machine sold on account can be recorded on the sales journal.

III. A building purchased in exchange for issuance of shares can be recorded in the purchase 

journal. 

IV. Depreciation expense can be recorded on the general journal.

• I, II and III

• II and III

• III and IV

• IV only

Which of the following statements is correct about chart of accounts?

• A chart of accounts is a list of all account titles in the general ledger.

• All account titles used by an entity are found in the chart of accounts.

• A chart of accounts represents the flowchart of all transactions of the entity.

• A and B

A simple journal entry

• Consists of one debit and one credit.

• Consists of two debits and one credit.

• Consists of one debit and two credits.

• Is in the form of a memorandum entry.

Journal entry that contains more than two accounts is called

• A simple journal entry

• A compound journal entry

• A complex journal entry

• An adjusting journal entry