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Exam 4: The General Journal and the General Ledger

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Question 51

True/False

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Posting references provide a useful cross-reference when entries must be traced and verified.

A) True
B) False

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verified

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Question 52

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A description should accompany each entry made in the ________.

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verified

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Question 53

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On July 3, the ABC Company received $865 in cash on account from customers. The correct journal entry to record this transaction is:

A company purchased equipment costing $15,000. They paid $1,000 right away and agreed to pay the balance in 30 days, the journal entry to record the purchase of equipment would include:

Posting references are part of the audit trail.

The accounts on the Trial Balance are always listed in the following order:

The account numbers from the ledger are recorded in the Posting Reference column of the general journal:

A ________ is referred to as a record of original entry.

If a transaction is properly analyzed and recorded,

On December 10, Yummy Catering purchased a new oven costing $10,000. They issued a check a check for $2,000 and promised to pay the balance in 30 days. The journal entry to record this transaction is:

The accounts with identification letters for Smart Delivery Services are listed below. During the current month, the company completed the transactions listed below. Indicate the appropriate journal entry that needs to be recorded for each transaction by providing the account letter and amount. Some entries may need more than one debit and/or more than one credit. The first transaction is completed as an example. $\begin{array} { l | l | l | l | l | l } \hline \text { F. } & \begin{array} { l } \text { Issued check for } \$ 750 \text { for } \\\text { current month's utilities }\end{array} & & & & \\\hline \text { G. } & \begin{array} { l } \text { The owner withdrew } \$ 1,500 \\\text { cash for personal use }\end{array} & & & & \\\hline \text { H. } & \begin{array} { l } \text { Received } \$ 900 \text { on account from } \\\text { credit clients }\end{array} & & & & \\\hline\end{array}$

Determine the accounts and amounts to be debited and credited for the following transactions for Madison's Clock Repair. A. Purchased new equipment for $3,400 by issuing a check for $1,400 as a down payment with the balance due in 30 days. B. Returned damaged supplies and received a $80 cash refund. C. Purchased supplies for $300 on account. D. Provided services for $8,600 on credit. E. Issued a check for $700 to pay a creditor on account. F. Issued checks for $3,800 to pay the employees their monthly salaries. G. Issued a check for $180 to pay the monthly telephone bill

The accounts with identification letters for Orly Delivery Services are listed below. $\begin{array}{l|l|l|l}\text { Letter } & \text { Account Title } & \text { Letter } & \text { Account Title } \\\hline \text { A } & \text { Cash } & \text { I } & \text { Orly, Drawing } \\\hline \text { B } & \text { Accounts Receivable } & \text { J } & \text { Delivery Fee Income } \\\hline \text { C } & \text { Supplies } & \mathrm{K} & \text { Advertising Expense } \\\hline \text { D } & \text { Prepaid Rent } & \text { L } & \text { Equipment Repairs Expense } \\\hline \text { E } & \text { Delivery Equipment } & \text { M } & \text { Rent Expense } \\\hline \text { F } & \text { Office Equipment } & \text { N } & \text { Salaries Expense } \\\hline \text { G } & \text { Accounts Payable } & \text { O } & \text { Utilities Expense } \\\hline \text { H } & \text { Orly, Capital } & &\\\hline\end{array}$ During the current month, the company completed the transactions listed below. Indicate the appropriate journal entry that needs to be recorded for each transaction by providing the account letter and amount. Some entries may need more than one debit and/or more than one credit. The first transaction is completed as an example. $\begin{array}{|l|c|l|l|l|l|}\hline && {\text { Debit }} &&{\text { Credit }} \\\hline& \text { Transaction } & \text { Letter } & \text { Amount } & \text { Letter } & \text { Amount } \\\hline \text { A. } & \begin{array}{l}\text { The owner invested } \$ 25,000 \\\text { cash in the business }\end{array} & \text { A } & \$ 25,000 & \text { H } & \$ 25,000 \\\hline \text { B. } & \begin{array}{l}\text { Purchased delivery equipment } \\\text { on account } \$ 16,500 .\end{array} \\\hline \text { C. } & \begin{array}{l}\text { Performed delivery services for } \\\$ 6,200 \text { cash }\end{array} \\\hline \text { D. } & \begin{array}{l}\text { Issued check for } \$ 7,200 \text { to pay } \\\text { the rent for six months }\end{array} \\\hline \text { E. } & \begin{array}{l}\text { Issued check for } \$ 360 \text { to } \\\text { purchase supplies }\end{array} \\\hline \text { F. } & \begin{array}{l}\text { Issued check for } \$ 4,000 \text { in } \\\text { partial payment of the delivery } \\\text { equipment purchased in 'B' } \\\text { above }\end{array} \\\hline \text { G. } & \begin{array}{l}\text { Purchased an advertisement } \\\text { space in the local newspaper for } \\\text { \$ 600 for one month }\end{array} \\\hline\end{array}$

A permanent, classified record of all accounts used in a firm's operation is called a(n)________.

For each of the accounts listed below, enter the words, Increase or Decrease, in the Debit and Credit columns to indicate the effects of each on the account balance. The first row has been completed for reference.

The process of recording transactions in a journal is referred to as ________.

For each of the accounts listed below, enter the words, Increase or Decrease, in the Debit and Credit columns to indicate the effects of each on the account balance.

A(n)______ entry is recorded when there is an error in data that has been journalized and posted.