AF Ch 7 Test

Errors discovered after posting has taken place requires...

• posting

• correcting entry

• trial balance

• proving the ledger

Adding all the debit balances and credit balances and then comparing the two totals to whether they are equal is called

• ledger

• posting

• proving the ledger

A periodic report prepared by a business to test the equality of total debits and credits in the ledger is called

• trial balance

• general ledger

• correcting entry

The first step in the posting process is to:

• post the amount

• enter the page number in the posting reference column

• enter the date in the date column

• compute the new balance

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

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

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

What does a credit entry to a liability account indicate?

• A decrease in the liability

• An increase in the liability

• No change in the liability

• An error in the entry