Accounting Journal Basics

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What is the primary purpose of the journal in accounting?

To create visuals for financial analysis.

To record transactions in chronological order. (correct)

To adjust the entries in the ledger.

To summarize financial statements.

In the general journal example, how much was the total debit for the transaction dated November 12?

$2,000

$12,000

$10,000

$14,000 (correct)

Which account reflects an increase in bank funds due to a loan in the journal example?

Revenue.

Accounts Payable.

Bank. (correct)

Expenses.

What does A/R stand for in the context of the general journal?

Accounts Receivable. Signup and view all the answers

What type of account is used for recording the supplies transaction from November 9?

Asset. Signup and view all the answers

What must be entered first when recording a journal entry?

The debited accounts and their amounts Signup and view all the answers

In the process of recording a journal entry, which of the following statements is true?

The debit amounts are recorded in the debit money column. Signup and view all the answers

What is the purpose of adding a brief explanation for each entry in the journal?

To distinguish each entry clearly and reference the source document Signup and view all the answers

What is the correct indentation format for recording credited accounts?

Credited accounts should be indented from the left margin. Signup and view all the answers

When creating journal entries, what must always be true about the total amounts?

The total credits must equal the total debits Signup and view all the answers

What information is not necessary when entering the particulars in a journal entry?

The type of transaction (e.g., cash sales) Signup and view all the answers

What is referred to as the 'opening entry' in journal accounting?

The first entry that initializes the books Signup and view all the answers

Which of the following is a common practice when writing a journal entry?

Including an explanation below the credit term Signup and view all the answers

When entering a journal entry, what should be noted regarding the amounts in the debit and credit columns?

The total of the debit column must always equal the total of the credit column. Signup and view all the answers

Which statement is false regarding the journal entries?

Debit amounts should always be noted first. Signup and view all the answers

What is the primary function of the two-column general journal?

To serve as the book of original entry Signup and view all the answers

When recording the month in the journal, what is the correct procedure?

Write the month only on the first entry of the page Signup and view all the answers

How is the day entered when multiple transactions occur on the same day?

The day is entered for each individual transaction Signup and view all the answers

Which statement is true regarding the journalizing process?

It involves recording both debit and credit entries Signup and view all the answers

What is a key characteristic of how transactions are recorded in the journal?

They are always recorded by date Signup and view all the answers

What is the primary function of a point of sale (POS) terminal?

To facilitate electronic fund exchanges between businesses and customers. Signup and view all the answers

In a sales transaction, who is considered the vendor?

The party selling the goods or services. Signup and view all the answers

Which journal entry corresponds to a cash sales slip?

Dr. Bank, Cr. Sales Signup and view all the answers

What does a sales invoice typically include?

Details of the transaction including an original and copies. Signup and view all the answers

Which of the following transactions would be recorded with a debit to Accounts Receivable?

A sale made on credit to S. & S. Boatworks. Signup and view all the answers

What is the primary purpose of a cheque copy?

To support the accounting entry for a payment by cheque Signup and view all the answers

When recording a journal entry for a cheque, what is true about the credit part?

It is always to the Bank account. Signup and view all the answers

What is the primary purpose of a cash sales slip?

To show the nature of a transaction and provide necessary accounting information Signup and view all the answers

What information is included in the cash receipts daily summary?

A list of money coming in from customers Signup and view all the answers

Which of the following is NOT typically included in a cash sales slip?

Customer feedback on service Signup and view all the answers

Why are cash sales slips generally pre-numbered?

To avoid duplication and loss of slips Signup and view all the answers

In the cash receipts daily summary, which account is typically debited?

Accounts Receivable Signup and view all the answers

What types of transactions can generate a cheque?

Various transactions like cash purchases and wages Signup and view all the answers

Who typically retains the original cash sales slip?

The customer Signup and view all the answers

What information is least likely to be found on a cash sales slip?

Sales tax percentage Signup and view all the answers

What information is typically included in a transaction log generated by a point of sale terminal?

Detailed information about each transaction Signup and view all the answers

Why are credit and debit card transactions treated as cash receipts in transaction logs?

They represent the net cash deposit for those transactions Signup and view all the answers

What is the primary purpose of a purchase invoice?

To differentiate between sales invoices and supplier invoices Signup and view all the answers

In which scenario would a journal entry credit the 'Sales' account?

When a sale is made on account Signup and view all the answers

What does the 'Dr' and 'Cr' signify in journal entry examples?

Debit and credit transactions Signup and view all the answers

What is the purpose of a bank debit advice?

To inform a business of a decrease in its bank account Signup and view all the answers

In what scenario is a bank credit advice used?

When there is an increase in the business' bank account Signup and view all the answers

If a business receives a cheque copy, which accounts are affected when paying an accounts payable?

Bank is credited; Accounts Payable is debited Signup and view all the answers

Which document serves to notify a business of cash received from customers on account?

Cash Receipts daily summary Signup and view all the answers

What accounts are typically debited and credited when documenting cash sales?

Bank debited; Sales credited Signup and view all the answers