Ch 7 Accounting Review

What is the first step in posting journal entries to general ledger accounts?

• Calculate the new account balance

• Identify the accounts affected

• Record the date of the transaction

• Transfer the debit and credit amounts

Which of the following is NOT a general ledger account?

• Cash

• Sales Revenue

• Accounts Payable

• Purchase Order

What is the purpose of posting journal entries to general ledger accounts?

• To record business transactions chronologically

• To ensure that debits equal credits

• To update account balances for financial statement preparation

• To track individual customer transactions

What does a debit entry in a cash account signify?

• An increase in cash

• A decrease in cash

• No change in cash

• An error in the entry

Which of the following accounts normally has a credit balance?

• Equipment

• Accounts Receivable

• Sales Revenue

• Supplies

When posting a journal entry, what does the term "posting reference" refer to?

• The page number of the journal

• The account number in the ledger

• The date of the transaction

• The amount of the transaction

What is the effect of a debit to an expense account?

• It decreases the account balance

• It increases the account balance

• It has no effect on the account balance

• It indicates an error in the entry

Which document is primarily used to record transactions before they are posted to the ledger?

• The balance sheet

• The trial balance

• The journal

• The income statement

What is the main purpose of the general ledger?

• To record transactions in chronological order

• To summarize the financial information of a company

• To track individual customer and vendor transactions

• To prepare the trial balance

Which of the following statements about the posting process is TRUE?

• It is done annually at the end of the fiscal year

• It involves transferring information from the ledger to the journal

• It is an optional step in the accounting cycle

• It updates the balances of accounts in the ledger