Questions and Answers
What is a group of accounts called?
ledger
What is a ledger that contains all accounts needed to prepare financial statements called?
general ledger
What is the number assigned to an account?
account number
What is the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current called?
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What is the term for writing an account title and number on the heading of an account?
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What is the process of transferring information from a journal entry to a ledger account called?
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What do you call a journal entry made to correct an error in a previous journal entry?
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Because an account form has columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form.
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The asset division accounts for TechKnow Consulting are numbered in the 100s.
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The cash account is the first asset account and is numbered 100.
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The second division of TechKnow Consulting's chart of accounts is the owner's equity division.
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The first digit of account numbers for accounts in the owner's equity ledger division is 3.
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The last two digits in a 3-digit account number indicate the general ledger division of the account.
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When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515.
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TechKnow Consulting arranges expense accounts in chronological order in its general ledger.
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The two steps for opening an account are writing the account title and recording the balance.
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Separate amounts in special amount columns are posted individually.
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Separate amounts in general amount columns are posted individually.
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The only reason for the Post.Ref. columns of the journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted.
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A check mark in parentheses below a general debit column total indicates that the total is not posted.
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The totals of special amount columns in a journal are not posted.
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With the exception of the totals lines, the Post.Ref. column is completely filled in with either an account number or a check mark.
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Study Notes
Ledger and Account Basics
- A ledger consists of a group of accounts, essential for financial tracking.
- The general ledger contains all accounts necessary to prepare financial statements.
Account Management
- Each account is assigned a unique account number for identification.
- File maintenance involves organizing accounts, assigning account numbers, and ensuring records remain current.
- Opening an account entails writing the account title and number on the heading.
Posting and Correcting Entries
- Posting refers to transferring information from journal entries to ledger accounts.
- Correcting entries are journal entries created to amend errors from previous entries.
True or False Statements
- Balance-ruled account forms include columns for both debit and credit balances (True).
- Asset division accounts for TechKnow Consulting are categorized in the 100s (True).
- The first asset account, the cash account, is incorrectly numbered; it is not 100 (False).
- The second division of TechKnow Consulting’s chart of accounts is not the owner's equity (False).
- Owner's equity accounts start with the digit 3 (True).
- The last two digits in a 3-digit account number do not indicate the general ledger division (False).
- New expense accounts inserted between existing accounts are numbered sequentially, e.g., 515 between 510 and 520 (True).
- Expense accounts in TechKnow Consulting are not arranged chronologically (False).
- Opening an account requires more than two steps, contrary to simplified definitions (False).
- Separate amounts in special amount columns are not posted individually (False).
- General amount columns do not involve individual posting of separate amounts (False).
- The Post.Ref. column in journals and ledgers serves purposes beyond indicating unposted entries (False).
- A check mark below a general debit column total signifies that the total is not posted (True).
- Totals from special amount columns in a journal are posted (False).
- The Post.Ref. column is generally filled with either account numbers or check marks, excluding total lines (True).
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Description
Test your knowledge with these flashcards covering key terms and definitions from Chapter 4 of Accounting. Learn about concepts such as ledgers, account numbers, and file maintenance essential for understanding financial statements.
