Week 4 - Topic 3 - Recording Information (Part 2)

Question 1

What are General Journals used for?

Answer 1

are used to keep a chronological record of all transactions and events that occur in a business during an accounting period.

Question 2

When are Special Journals used?

Answer 2

used when there are large volumes of repetitive transactions that a general journal could not handle efficiently.

Question 3

Where are totals transferred from into relevant ledger accounts?

Answer 3

From special journals

Question 4

Fill in the following one word gap: Every item in the business must have its ______ ledger account.

Answer 4

own

Question 5

What is an example of adjusting an entry?

Answer 5

Changing from an asset to an expense account

Question 6

What are Trial Balances used for?

Answer 6

are used to check whether your accounting equations are still in balance, due to the large number and nature of information recorded. Take ach account number, name and numerical balance.

Question 7

What are the 4 key pieces of information that every general journal entry must have?

Answer 7

1. Date
2. Names of ledger accounts involved (including their numbers)
3. Amounts for debits and credits
4. A narration

Question 8

What is a ‘Chart of accounts’?

Answer 8

a list of all ledger accounts and their respective numbers.

Question 8

Define ‘General ledger’?

Answer 8

all of our ledger accounts compiled together into one.

Question 9

Define ‘Posting’?

Answer 9

is the process of moving the transaction from the general journal to the ledger account. We need to know the date, cross-reference and amount for each. IT MUST ALWAYS REMAIN IN BALANCE

Question 10

Fill in the following gap: For the Income Statement, include the _____________ accounts ONLY

Answer 10

income and expense

Question 10

Define Cross-Reference in terms of accounting?

Answer 10

is just the opposite account name involved in the transaction. It isn’t the description of what happened in the transaction.

Question 11

Fill in the following gaps: For the Statement of Changes in Equity, include the ______ accounts ONLY, along with _______ from the income statement and the ______ of capital from the end of the last period.

Answer 11

equity, profit (loss), balance

Question 12

Fill in the following gaps: For the Balance Sheet, include the __________ accounts ONLY, along with the ________ of capital from the statement of changes in equity.

Answer 12

asset and liability, closing balance.