10 Questions
What is the purpose of transaction analysis in accounting?
To identify and classify transactions
Salaries and wages are a type of asset account.
False
What is the purpose of a general journal?
To record infrequent or non-routine transactions that cannot be recorded in a specialized journal.
The _______________ ledger is a summary of all the general ledger accounts.
general
Match the following accounts with their respective ledger:
Accounts Payable = Creditors Ledger Accounts Receivable = Debtors Ledger Salaries and Wages Expense = General Ledger Cash = General Ledger
A company pays $10,000 in salaries and wages to its employees. What is the effect on the accounting equation and what would be the journal entry to record this transaction?
Assets decrease by $10,000, and Expenses increase by $10,000. Journal entry: Debit Salaries and Wages Expense ($10,000) and Credit Cash ($10,000).
A company purchases office supplies on credit for $5,000. What is the effect on the accounting equation and what would be the journal entry to record this transaction?
Assets increase by $5,000, and Liabilities increase by $5,000. Journal entry: Debit Office Supplies ($5,000) and Credit Accounts Payable ($5,000).
A company has a debit balance of $15,000 in its accounts payable account at the beginning of the period. During the period, it makes payments of $8,000 and purchases on credit of $12,000. What is the ending balance of the accounts payable account?
The ending balance of the accounts payable account would be $19,000 ($15,000 - $8,000 + $12,000).
A company has a credit balance of $20,000 in its accounts receivable account at the beginning of the period. During the period, it receives cash of $15,000 and makes sales on credit of $18,000. What is the ending balance of the accounts receivable account?
The ending balance of the accounts receivable account would be $23,000 ($20,000 + $18,000 - $15,000).
A company has a general ledger account called 'Rent Expense' with a debit balance of $10,000 at the beginning of the period. During the period, it pays rent of $8,000 and makes a journal entry to record rent expense of $12,000. What is the ending balance of the 'Rent Expense' account?
The ending balance of the 'Rent Expense' account would be $20,000 ($10,000 + $12,000).
Study Notes
Accounting Exam Study Notes
Transaction Analysis
- Identify and record financial transactions, such as revenue, expenses, assets, liabilities, and equity
- Classify transactions into debit and credit entries
- Understand the accounting equation: Assets = Liabilities + Equity
Salaries and Wages
- Salaries and wages are expenses incurred by a business to compensate employees
- Calculate salary and wage expenses, including gross pay, deductions, and net pay
- Record salaries and wages in the accounting system
Journals, GL, Debtors, and Creditors
- Journals: record transactions chronologically, with debit and credit entries
- General Ledger (GL): a ledger that summarizes all transactions, organized by account
- Debtors: individuals or businesses that owe the company money
- Creditors: individuals or businesses to whom the company owes money
- Record and manage transactions related to debtors and creditors
General Journal and Ledgers
- General Journal: a journal that records non-routine transactions, such as corrections, adjustments, and closing entries
- Ledgers: records of all transactions, including the General Ledger, Accounts Payable Ledger, and Accounts Receivable Ledger
- Understand the purpose and content of each ledger
Accounting Exam Study Notes
Transaction Analysis
- Identify and record financial transactions, such as revenue, expenses, assets, liabilities, and equity
- Classify transactions into debit and credit entries
- Understand the accounting equation: Assets = Liabilities + Equity
Salaries and Wages
- Salaries and wages are expenses incurred by a business to compensate employees
- Calculate salary and wage expenses, including gross pay, deductions, and net pay
- Record salaries and wages in the accounting system
Journals, GL, Debtors, and Creditors
- Journals: record transactions chronologically, with debit and credit entries
- General Ledger (GL): a ledger that summarizes all transactions, organized by account
- Debtors: individuals or businesses that owe the company money
- Creditors: individuals or businesses to whom the company owes money
- Record and manage transactions related to debtors and creditors
General Journal and Ledgers
- General Journal: a journal that records non-routine transactions, such as corrections, adjustments, and closing entries
- Ledgers: records of all transactions, including the General Ledger, Accounts Payable Ledger, and Accounts Receivable Ledger
- Understand the purpose and content of each ledger
Test your knowledge of accounting basics, including transaction analysis, accounting equation, and salaries and wages. Review key concepts and equations to prepare for your accounting exam.
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