Chapter 6

Question 1

journal

a.k.a book of original entry

Answer 1

a journal is a book in which the accounting entries for all transactions are first recorded, in order of date, before they are recorded in the ledger accounts

shows chronological order and continuous record

Question 2

journal entry

Answer 2

all of the accounting changes for a transaction in the form in which it is
written in the general journal

Question 3

journalizing

Answer 3

the process of recording accounting entries in the journal

Question 4

opening entry

Answer 4

the entry that starts the book off and is taken from the account balances of the balance sheet

Question 5

source document

Answer 5

a business paper that provides all the details about a business transaction

Question 6

cash sales slip

Answer 6

a business form used to record the details of a cash sale.

bank debit
sales credit

Question 7

sales invoice

Answer 7

a document that represents a sale of goods or services on account

POV - seller
A/R - debit
Sales - credit

Question 8

purchase invoice

Answer 8

a document that represents a purcchase of goods or services on account

POV - purchaser
expense/asset- debit
A/P - credit

Question 9

point of sale (POS) terminal

Answer 9

a computerized sales register that allows a business and its customers to exchange funds electronically

Question 10

cheque copy

Answer 10

a document supporting the accounting entry for a payment by cheque

Question 11

cash receipts daily summary

Answer 11

a source document for cheques coming in from customers on account

Question 12

remittance advice

Answer 12

a form accompanying the cheque explaining the payment

Question 13

bank debit advice

Answer 13

a bank document informing the business of a decrease made in the business’s bank account

interest expense -debit
bank - credit

Question 14

bank credit advice

Answer 14

a bank document informing the business of an increase made in the business’s bank account

bank - debit
interest earned - credit

Question 15

tax principles

Answer 15

1. tax is charged to the buyer of goods/services
2. tax is collected by the seller on behalf of the government
3. tax is recorded in a separate **liability ** account
4. the seller sends the collected tax dollars to the government on a specific date

Question 16

HST

Answer 16

harmonized sales tax

composed of provincial (PST) and federal (GST - 5%)

Question 17

remittance

Answer 17

a sum of money sent (sending the collected tax dollars to the government)

Question 18

clearing an account balance

Answer 18

bring it to zero

Question 19

contra account

Answer 19

an account that has a balance that reduces or offsets the balance of a closely related account (HST Recoverable <-> HST Payable)

Question 20

HST Payable

Answer 20

• tax charged to customer
• liability account
• credit entry

Question 21

HST Recoverable

Answer 21

• tax charged to the business
• contra liability account
• debit entry