Ch. 3 pt 1 Flashcards
general ledger, t accounts, unadjusted trial balance,
What is the purpose of a general journal in accounting?
To record all business transactions in chronological order.
True or False: A T-account is used to visualize the effects of transactions on individual accounts.
True
Fill in the blank: The ________ trial balance lists all the accounts and their balances before any adjusting entries are made.
unadjusted
What do adjusting entries typically address?
They address transactions that have occurred but are not yet recorded in the accounts.
What is the format of a general journal entry?
Date, Account Title and Description, Debit amount, Credit amount.
In a T-account, which side is used for debits?
The left side.
What is the effect of a debit on an asset account?
It increases the asset account.
Multiple Choice: Which of the following is an example of an adjusting entry? A) Cash sale B) Depreciation expense C) Owner’s investment
B) Depreciation expense
What does a trial balance ensure?
That total debits equal total credits.
True or False: Adjusting entries are only made at the end of an accounting period.
True
What is the primary purpose of closing entries?
To transfer the balances of temporary accounts to permanent accounts.
Fill in the blank: The ________ is a record of financial transactions that provides a detailed history of all account activities.
general ledger
What is the typical order of accounts in a trial balance?
Assets, Liabilities, Equity, Revenues, Expenses.
What type of account is affected by a credit entry?
Liabilities and equity accounts typically increase with a credit entry.
Multiple Choice: Which of the following accounts would NOT typically require an adjusting entry? A) Prepaid Expenses B) Cash C) Accrued Revenues
B) Cash
What is recorded in the description section of a journal entry?
A brief explanation of the transaction.
Fill in the blank: An unadjusted trial balance is prepared before ________ entries are recorded.
adjusting
What is the first step in the accounting cycle?
Identifying and analyzing transactions.
True or False: The general journal can have multiple entries for the same transaction.
True
What is the relationship between debits and credits in double-entry accounting?
For every debit entry, there must be an equal credit entry.
What happens to an expense account when it is debited?
It increases the expense account.
Fill in the blank: A ________ entry is necessary when revenue has been earned but not yet received.
receivable
What does the term ‘accrual basis’ refer to in accounting?
Recording revenues and expenses when they are incurred, regardless of when cash is exchanged.
What is the final step in the accounting cycle?
Preparing financial statements.
Multiple Choice: Which account is typically debited when recording an adjusting entry for accrued salaries? A) Salaries Payable B) Cash C) Salaries Expense
C) Salaries Expense
What is the significance of the trial balance in the accounting process?
It helps to verify the accuracy of the ledger balances before preparing financial statements.
