Bookkeeping 10

Question 1

1. When you enter transactions in the JOURNAL, they are in chronological order but otherwise mixed. The next step is to:

Answer 1

transfer them to a LEDGER, or BOOK OF ACCOUNTS, in which each individual TYPE of transaction is maintained separately.

Question 2

2. The LEDGER separates entries by TYPE, and this kind of record is called

Answer 2

an ACCOUNT.

Question 3

3. What is an example of an ACCOUNT on a LEDGER?

Answer 3

A LEDGER has a SEPARATE PAGE for CASH TRANSACTIONS, and that page is an ACCOUNT.

Question 4

4. How do you know how much customers owe you and to what vendors you owe money to?

Answer 4

Each one has their SEPARATE ACCOUNTS.

Question 5

5. What other items have separate ACCOUNTS?

Answer 5

A separate LEDGER PAGE (ACCOUNT) is created for EACH ASSET ACCOUNT, each TYPE OF LIABILITY, for CAPITAL, for REVENUE, and for EXPENSES.

Question 6

6. When transactions are recorded in the JOURNAL, we speak of “ENTERING”. Transferring info from the JOURNAL to the appropriate PAGE IN THE LEDGER (ACCOUNT) is called:

Answer 6

POSTING

Question 7

7. All ACCOUNTS in the LEDGER get an

Answer 7

ACCOUNT TITLE and an ACCOUNT NUMBER.

Question 8

8. The title of each ACCOUNT will be something like:

Answer 8

“Cash”
“Payroll Account”
“Accounts Receivable, Smith Co.”

Question 9

9. What is a CHART OF ACCOUNTS?

Answer 9

It is a list of all the ACCOUNT TITLES with their NUMBERS.