Accounting Process: Chapter 5

Question 1

It is a series of steps taken in gathering, processing, and summarizing data so as to produce meaningful information which are communicated to statement users by way of financial reports.

Answer 1

Accounting Cycle

Question 2

It is the book of original entry.

Answer 2

General Journal

Question 3

It is the book of final entry.

Answer 3

General Ledger

Question 4

It is issued when service or merchandise is given to a customer or client.

Answer 4

Invoice

Question 5

It is used when cash is received by the entity.

Answer 5

Official Receipt

Question 6

It is a document used when cash is paid or a check is issued.

Answer 6

Cash or Check Voucher

Question 7

It is a negotiable instrument used as a substitute for cash, the payment for which is drawn against the entity’s or individual’s current account.

Answer 7

Check

Question 8

It is a written promise to pay a certain sum of money at a future date.

Answer 8

Promissory Note

Question 9

It is a bill presented to a customer for service rendered or merchandise given for which payment is demandable.

Answer 9

Statement of Account

Question 10

It is a device used to record the increases and decreases affecting each of the different assets, liabilities, and owner’s equity.

Answer 10

Account

Question 11

It is a listing of account titles which guides the bookkeeper in the recording of transactions.

Answer 11

Chart of Accounts

Question 12

It is the simplest tool used to analyze the effects of the transactions on each account.

Answer 12

T account

Question 13

It is the left side of an account.

Answer 13

Debit

Question 14

It is the right side of an account.

Answer 14

Credit

Question 15

This states that the transactions must always affect two accounts and at least two accounting elements.

Answer 15

Double Entry Bookkeeping System or Venetian Model

Question 16

It is the difference between the debit total and the credit total.

Answer 16

Account Balance

Question 17

If the debit total is higher than the credit total, the account balance is called a _________.

Answer 17

Debit Balance

Question 18

If the credit total is higher than the debit total, the account balance is called a _________.

Answer 18

Credit Balance

Question 19

When the debit total is equal to the credit total, it is a ____________.

Answer 19

Zero Account Balance

Question 20

It is the process of recording in a general journal.

Answer 20

Journalization

Question 21

Every entry made in the general journal is called a _________.

Answer 21

Journal Entry

Question 22

A journal entry with one debit and one credit is called a ________________.

Answer 22

Simple Journal Entry

Question 23

When an entry has more than one debit or more than one credit, it is called a __________.

Answer 23

Compound Journal Entry

Question 24

It provides a complete recording of a transaction in chronological order.

Answer 24

Journal

Question 25

It shows in one page all the changes (increases or decreases) that took place for a particular account.

Answer 25

Ledger

Question 26

It is the process of transferring the debits and credits from the journal to the ledger.

Answer 26

Posting

Question 27

It facilitates the tracing of an entry to and from the journal and ledger.

Answer 27

Cross Reference

Question 28

It is a list of accounts with ledger balances.

Answer 28

Trial Balance

Question 29

Errors: A difference of ___ would indicate probably an error in addition.

Answer 29

Ten

Question 30

Errors: If the difference is divisible by ___, then the error probably is in posting to the wrong side.

Answer 30

Two

Question 31

Errors: the order of the digits are interchanged.

Answer 31

Transposition

Question 32

Errors: the decimal point is misplaced.

Answer 32

Transplacement

Question 33

The accounts receivable and accounts payable in the general ledger are called ________________.

Answer 33

Control Accounts

Question 34

An individual record is kept for each customers or creditors called ___________ or customer's card and creditor's card, where the details of their accounts are entered.

Answer 34

Subsidiary Ledger