Questions and Answers
A journal shows in one place all the changes in a single account.
False
Account numbers may be assigned by 10s so that new accounts can be added easily.
True
The procedure of arranging accounts in a general ledger, assigning account numbers, and keeping records current is posting.
False
If a business has only two asset accounts, Cash and Supplies, the two accounts are numbered 110 and 120.
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A group of accounts is called a ledger.
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A journal page number is written in the Post.Ref. column of an account to show that posting of the entry is completed.
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The account number is placed in the Post.Ref. column of the journal as the last step in the posting procedure.
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If the previous account balance and the current entry posted to an account are both debits, the new account balance is a debit.
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The column total of the General Debit column is posted.
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Only the column totals for special amount columns in a journal are posted.
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The cash account is the first asset account and is numbered 100.
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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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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 accounts in special amount columns are not posted individually.
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The posting reference should always be recorded in the journal's Post.Ref. column before amounts are recorded in the ledger.
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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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The steps for posting are to write the date, journal page number, amount, and balance.
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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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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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What does the first digit in the account number 120 signify?
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What are accounting personnel doing when accounts are arranged in the general ledger, account numbers are assigned, and the chart of accounts is kept up to date?
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What is the procedure for transferring information from a journal entry to a ledger account?
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Study Notes
Account Management Basics
- A journal summarizes changes only in a single account, not in one place for all accounts.
- Account numbers are often assigned in increments of ten to facilitate the addition of new accounts.
- The proper term for arranging accounts in a general ledger and maintaining records is not posting.
Account Numbering
- Asset accounts like Cash and Supplies are commonly assigned account numbers such as 110 for Cash and 120 for Supplies.
- A collection of accounts is referred to as a ledger.
- The cash account is typically numbered 100, contrary to some claims.
Posting Procedure
- In posting, a journal page number is recorded in the ledger but not in the Post.Ref. column once the entry is finished.
- The account number is noted in the Post.Ref. column as the final step of posting.
- If both the previous balance and a new entry are debits, the resulting balance will be a debit.
Column Posting Mechanics
- Total columns in the General Debit column are not posted individually, only special amount column totals are.
- New expense accounts added amidst existing accounts receive a sequential account number, such as 515 when placed between 510 and 520.
Account Opening and Maintenance
- Opening an account requires more than just writing the account title and balance; additional steps are necessary.
- Special amount column entries are recorded collectively, not individually; only total amounts are posted.
Journal and Ledger Reference
- The Post.Ref. column should be filled after amount recording, not beforehand.
- The journals and ledgers' Post.Ref. columns serve multiple purposes, including keeping track of unposted entries.
Posting Procedures
- The steps for posting involve more than just the date, journal page number, amount, and balance.
- A check mark in parentheses beneath the General Debit column indicates that its total has not been posted.
- Aside from the totals line, the Post.Ref. column should include either an account number or a check mark, indicating all entries are accounted for.
File Maintenance
- The first digit in an account number can indicate the account division, such as ‘1’ for assets.
- Maintaining an updated chart of accounts along with account numbering reflects effective file maintenance by accounting personnel.
- Posting is defined as the procedure for transferring journal entries to ledger accounts.
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Prepare for your Accounting Chapter 4 test with this comprehensive study guide. It includes flashcards that cover key concepts, definitions, and true/false questions that are essential for mastering the material. Test your knowledge and understand the core principles of accounting.
