ACT3014 - Topic 2 - The Recording Process

The first step in the recording process is to

• prepare financial statements.

• analyze each transaction for its effect on the accounts.

• post to a journal.

• prepare a trial balance.

Answer explanation

The correct first step in the recording process is to analyze each transaction for its effect on the accounts.

After transaction information has been recorded in the journal, it is transferred to the

• trial balance.

• income statement.

• book of original entry.

• ledger.

Answer explanation

After transaction information has been recorded in the journal, it is transferred to the ledger, where individual accounts are maintained for each transaction.

A debit is not the normal balance for which of the following?

• Asset account

• Drawings account

• Expense account

• Capital account

Answer explanation

A debit is not the normal balance for the Capital account. Capital accounts typically have a credit balance, not a debit balance.

The left side of an account is

• blank.

• a description of the account.

• the debit side.

• the balance of the account.

A trial balance is a listing of

• transactions in a journal.

• the chart of accounts.

• general ledger accounts and balances.

• the totals from the journal pages.

Issued by the seller when receive payments from the buyer.

• Purchase Order

• Payment Voucher

• Credit Notes

• Receipt

Answer explanation

The correct choice is 'Receipt' as it is issued by the seller when receiving payments from the buyer.

A ledger is a:

• Book of Accounts

• Book of Journals

• Book of numbers

• None of these

On January 14, Maxine Industries purchased supplies of $900 on account. The entry to record the purchase will include

• a debit to Supplies and a credit to Accounts Payable.

• a debit to Supplies Expense and a credit to Accounts Receivable.

• a debit to Supplies and a credit to Cash

• a debit to Accounts Receivable and a credit to Supplies.

Answer explanation

The correct entry to record the purchase of supplies on account is a debit to Supplies and a credit to Accounts Payable.

The usual sequence of steps in the transaction recording process is:

• journal - analyze - ledger.

• analyze- journal - ledger.

• journal -ledger -analyze.

• ledger - journal - analyze.

The procedure of transferring journal entries to the ledger accounts is called

• journalizing.

• analyzing.

• reporting.

• posting.

Answer explanation

The correct answer is 'posting.' This process involves transferring journal entries to the respective ledger accounts.