Book 1, Chapter 3 - Journal Entries & Ledgers

Question 1

Journals

Answer 1

Books of original entry

No transactions got into the accounting records without getting entered into a journal first

Question 2

Journal for transactions affecting cash

Answer 2

Cash receipts journal

Cash disbursements journal
aka
Cash payments journal

Question 3

Type of payments entered into a cash receipts journal

Answer 3

Cash
Check
Credit card
Debit card

Question 4

Portfolio income

Answer 4

Interest and dividend income

Question 5

Structure of cash receipts journal

Answer 5

Date
Name of account
2 debit columns
4 credit columns

Debit columns
Receipt of cash
Sales discounts

Credit columns
Sales
Accounts receivable
Sales tax payable
Miscellaneous

Question 6

Structure of a cash disbursements/payments journal

Answer 6

Date
(Chk)
Account name
Pay-to-entity
2 Credit columns
     Cash
     Purchase discounts
2 Debit columns
     Accounts payable
     Miscellaneous

Question 7

Type of payments entered in a cash disbursements/payments journal

Answer 7

Merchandise purchases
Payments on outstanding
accounts
Payments for operating expenses

Question 8

Accrual transactions & journals

Answer 8

Whenever cash does not change hands
Sales journal
Purchases journal

Question 9

Sales journal

Answer 9

Business to customers on account with no exchange of money

Accounts receivable debit
Sales credit

Follow up by posting the transaction to the customer in the accounts receivable ledger

Question 10

Posting of sales return

Answer 10

Not to sales journal

Post to general journal

Question 11

Purchase journal entries and structure

Answer 11

Products or services purchased on account(credit)

Date
Number(invoice)
Amount

Accounts payable
Terms
Name
Account

Question 12

Terms notation
Example
2/10,n/30

Answer 12

2% discount if paid 10 days
Full amt(net) due 30 days

Question 13

Closing journal entries

Answer 13

Zero out all temporary accounts

Examples of temp accts
Revenue
Expense

Transfer net amounts to the balance sheet

Question 14

Closing journal entries(4)

Answer 14

Debit all revenue accts and credit income summary for the same amt

Credit all expenses and debit income summary for the same amt

Credit or debit the income summary acct to zero

Dividends credit cash and debit retained earnings

Question 15

Revenue account type

Answer 15

Equity

Question 16

General ledger

Answer 16

Every transaction in every account from the chart during the specified accounting period

Note subsidiary ledgers
Payroll subsidiary ledger
Accounts receivable ledger

Question 17

Trial balance

Answer 17

Listing of all the accounts in the general ledger and the balance if each account as of a certain date