18 Questions
Which of the following is NOT a characteristic of a Special Journal?
It is used for recording all types of transactions
What is the main purpose of maintaining a Purchases Book or Purchases Day Book?
To record all credit purchases
Which of the following is the purpose of maintaining a Sales Returns Book?
To record goods returned by customers
When would a business maintain a separate Bank Book, instead of using a multi-column Cash Book?
When the business has a large number of bank transactions
What is the main difference between a Cash Book and a Cash Journal?
A Cash Book is a general ledger account, while a Cash Journal is a book of original entry
According to the Golden Rule of Double Entry Book-keeping, what comes in for a Nominal Account?
Expenses and Losses
Which of the following is NOT a type of Special Journal?
General Journal
In the sub-division of Journal, which of the following is classified under Special Journal?
Bank Book
When journalizing a transaction, how is a Real Account typically treated according to the Golden Rule?
Debit what comes in
For a Personal Account, who is considered the giver according to the Golden Rule?
The receiver
Which type of account represents Capital as per the Accounting Equation?
Liabilities
In terms of the Golden Rule, how are Incomes and Gains treated for a Nominal Account?
Credit what goes out
Which of the following is NOT a function of the journal in accounting?
Calculating depreciation expenses
If a business purchases office supplies for $500 on credit, what would be the journal entry?
Debit Office Supplies, Credit Accounts Payable $500
In the accounting cycle, which step comes immediately after journalizing transactions?
Posting to the general ledger
If a company's equipment has a useful life of 5 years and a salvage value of $2,000, what is the annual depreciation expense using the straight-line method for an equipment that cost $20,000?
$4,000
The purpose of a trial balance is to:
Ensure that the total debits equal the total credits in the ledger accounts
Which of the following is NOT an advantage of using a journal in accounting?
It automatically calculates depreciation expenses
Test your knowledge on the process of recording transactions in a journal, known as 'journalisation', and the functions of a journal, including historical and analytical functions. Learn about the importance of journal entries in accounting practices.
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