Office Accounting Exam 2

Question 1

the journal or the first formal accounting record of a transaction

Answer 1

book of original entry

Question 2

a list of all accounts used by a business

Answer 2

chart of accounts

Question 3

a general journal entry that affects more than two accounts

Answer 3

compound entry

Question 4

an entry to correct an incorrect entry that has been journalized and posted to the wrong account

Answer 4

correcting entry

Question 5

the information in the Posting Reference columns of the journal and ledger that provides a link between the journal and ledger

Answer 5

cross-reference

Question 6

a complete set of all accounts used by a business. It accumulates a complete record of the debits and credits made to each account as a result of entries made in the journal

Answer 6

general ledger

Question 7

a day to day listing of the transactions of a business

Answer 7

journal

Question 8

entering the transactions in a journal

Answer 8

journalizing

Question 9

copying debits and credits from the journal to the ledger accounts

Answer 9

posting

Question 10

a method of correcting an entry in which a line is drawn through the error and the correct information is placed above it

Answer 10

ruling method

Question 11

an error that occurs when debit or credit amounts “slide” a digit or two to the left or right

Answer 11

slide error

Question 12

any document that provides information about a business transaction

Answer 12

source document

Question 13

an error that occurs when two digits are reversed

Answer 13

transposition error

Question 14

a lost used to prove that the totals of the debit and credit balances in the ledger accounts are equal

Answer 14

trial balance

Question 15

a journal with only two amount columns, one for debit amounts and one for credit amounts

Answer 15

two-column general journal

Question 16

a method of accounting under which revenues are recorded when earned and expenses are recorded when incurred

Answer 16

accrual basis of accounting

Question 17

the third pair of amount columns on the work sheet. They are used to prove the equality of the debits and credits in the general ledger accounts after making all end-of-period adjustments

Answer 17

adjusted trial balance columns

Question 18

journal entries made at the end of an accounting period to reflect changes in account balances that are not the direct result of an exchange with an outside party

Answer 18

adjusting entries

Question 19

the work sheet columns that show the amounts that will be reported in the balance sheet and the statement of owner’s equity

Answer 19

balance sheet columns

Question 20

the difference between the asset account and its related accumulated depreciation account. The value reflected by the accounting records

Answer 20

book value

Question 21

a method of accounting under which revenues are recorded when cash is received and expenses are recorded when cash is paid

Answer 21

cash basis accounting

Question 22

an account with a credit balance that is deducted from the related asset account on the balance sheet

Answer 22

contra asset

Question 23

the cost of an asset that is subject to depreciation

Answer 23

depreciable cost

Question 24

a method of matching an asset’s original cost against the revenues produced over its useful life

Answer 24

depreciation

Question 25

a 12 month period for which financial reports are prepared

Answer 25

fiscal year

Question 26

a principle that requires assets to be recorded at their actual cost

Answer 26

historical cost principle

Question 27

the work sheet columns that show the amounts that will be reported In the income statement

Answer 27

income statement columns

Question 28

the amount an item can be sold for under normal economic conditions

Answer 28

market value