accounting Flashcards
What is a journal in accounting?
A journal is a chronological record of all financial transactions of a business.
True or False: A cashbook records only cash transactions.
True
Fill in the blank: The __________ is used to summarize all transactions and prepare financial statements.
trial balance
What is the primary purpose of a ledger?
The primary purpose of a ledger is to categorize and summarize all transactions into accounts.
Which of the following is NOT a type of ledger? A) General Ledger B) Sales Ledger C) Cash Ledger D) Expense Journal
D) Expense Journal
What does the trial balance show?
The trial balance shows the balances of all accounts at a specific point in time.
True or False: All entries in the journal must be posted to the ledger.
True
What is the difference between a cashbook and a journal?
A cashbook records only cash transactions, while a journal records all types of transactions.
Define ‘debit’ in the context of accounting.
A debit is an entry on the left side of an account that increases assets or expenses and decreases liabilities or equity.
What is meant by ‘double-entry accounting’?
Double-entry accounting means that every transaction affects at least two accounts, with debits equaling credits.
Which financial statement is directly prepared from the trial balance?
The income statement and balance sheet.
True or False: A cashbook can also serve as a ledger.
True
What is an example of a source document in accounting?
Invoices, receipts, and bank statements are examples of source documents.
Multiple choice: What is the first step in the accounting cycle? A) Prepare financial statements B) Analyze transactions C) Record transactions D) Close the books
B) Analyze transactions
What does ‘posting’ refer to in accounting?
Posting refers to the process of transferring journal entries to the ledger accounts.
