Lesson 1

Question 1

Entering transaction data in the journal is known as __________.

Answer 1

Journalizing

Question 2

An entry that requires three or more accounts is called __________.

Answer 2

Compound Entry

Question 3

An entry that only involves one debit and one credit is known as __________.

Answer 3

Simple entry

Question 4

Recording transactions involving receipt or collection of cash is called __________.

Answer 4

Cash Receipts Journal

Question 5

The journal where all cash payments are recorded is known as __________.

Answer 5

Cash Disbursement Journal

Question 6

The accounting book in which the accounts and their related amounts are recorded in the journal is referred to as __________.

Answer 6

Ledger

Question 7

The grouping of all accounts used in the preparation of financial statements is called __________.

Answer 7

General ledger

Question 8

The group of accounts containing the independent data of a specific general ledger is referred to as __________.

Answer 8

Subsidiary ledger

Question 9

Recurring transactions of purchases on account are recorded in __________.

Answer 9

Purchase Journal

Question 10

Cash Receipts Journal, Cash Disbursement Journal, Sales Journal are examples of __________.

Answer 10

Special Journal

Question 11

Accounting is the process of identifying, recording, and __________.

Answer 11

Communicating

Question 12

Companies initially record transactions and events in __________ order.

Answer 12

Chronological

Question 13

There are two types of journals: the general journal and __________.

Answer 13

Special journals

Question 14

A brief explanation of the transaction is entered in the __________ column.

Answer 14

Description Column

Question 15

The date of transaction is entered in the __________ column.

Answer 15

Date

Question 16

The book of original entry where transactions are initially recorded.

Answer 16

General Journal

The general journal captures all transactions before they are posted to other accounts.

Question 17

The book of final entry, summarizing all the transactions from the journals.

Answer 17

General Ledger

The general ledger provides a complete record of all financial transactions.

Question 18

Used to record purchases made on account (credit).

Answer 18

Purchases Journal

This journal helps track credit purchases specifically.

Question 19

Records sales made on credit.

Answer 19

Sales Journal

It is essential for tracking accounts receivable.

Question 20

Records all cash receipts.

Answer 20

Cash Receipts Journal

This journal is crucial for cash flow management.

Question 21

Records all cash payments.

Answer 21

Cash Disbursement Journal

This journal helps monitor outflows of cash.

Question 22

Contains the details supporting the balances in the general ledger accounts.

Answer 22

Subsidiary Ledger

Subsidiary ledgers provide more detailed information about specific accounts.

Question 23

Why is the general ledger referred to as the controlling account?

Answer 23

Because it summarizes all the subsidiary ledgers.

It acts as an aggregate of all detailed accounts.

Question 24

What defines a simple entry?

Answer 24

Involves only two accounts: one debit and one credit.

Simple entries are straightforward and commonly used in accounting.

Question 25

What characterizes a compound entry?

Answer 25

Involves three or more accounts. ## Footnote Compound entries are necessary for more complex transactions.

Question 26

What type of receipts do cash disbursement journals typically use?

Answer 26

Official receipts issued by companies as proof of payment. ## Footnote These receipts are critical for validating cash payments.

Question 27

What type of documentation do purchase journals rely on?

Answer 27

Transactions supported by official receipts from suppliers. ## Footnote This ensures that purchases are properly documented.

Question 28

What do sales journals use as proof of sale?

Answer 28

Sales invoices issued by companies. ## Footnote Sales invoices are essential for tracking sales transactions.

Question 29

What is typically found within sales journals concerning suppliers?

Answer 29

Sales invoices from suppliers. ## Footnote This can occur especially if the supplier is also a customer.

Question 30

How do purchase journals utilize receipts?

Answer 30

Utilize official receipts from suppliers as proof of payment. ## Footnote This reinforces the validity of the recorded transactions.

Question 31

How is a cash purchase recorded differently than other transactions?

Answer 31

Typically in a general journal or cash book. ## Footnote Cash purchases can be recorded in multiple ways depending on the accounting system.