Questions and Answers
All corrections for posting errors should be made in a way that leaves no questions as to the correct amount.
True
A journal shows in one place all the changes in a single account.
False
The account number is placed in the Post.Ref. column of the journal as the last step in the posting procedure.
True
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 two steps for opening an account are writing the account title and recording the balance.
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The procedure of arranging accounts in a general ledger, assigning account numbers, and keeping records current is known as file maintenance.
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The Cash account is the first asset account and is numbered 110.
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The steps for posting are to write the date, the journal page number, the amount, and the balance.
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If the payment of cash for rent was journalized and posted in error as a debit to Miscellaneous Expense instead of Rent Expense, the correcting entry will include a credit to Cash.
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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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A group of accounts is called a ledger.
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The only use for the Post.Ref. column of a 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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When posting is complete, the Post.Ref. column in the General Journal is completely filled in with account numbers.
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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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Errors discovered after an entry is posted may be corrected by ruling through the item.
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Study Notes
Posting Procedures
- Corrections for posting errors must clearly indicate the correct amount for transparency.
- The posting reference is recorded in the journal's Post.Ref column after amounts have been posted.
Journal and Ledger Management
- A journal does not provide a comprehensive view of all changes for a single account, contrary to an account ledger.
- The two crucial steps for opening an account involve writing the title and recording the initial balance.
Account Structure
- File maintenance refers to organizing accounts in a general ledger and ensuring records are up-to-date, including assigning account numbers.
- The Cash account is the first asset account, designated with the account number 110.
Posting Steps
- In the posting process, steps include writing the date, journal page number, amount, but do not include a balance.
- Mistakes in transaction postings (e.g., misclassifying Rent Expense as Miscellaneous Expense) require a specific correction entry, often involving a credit to Cash.
Account Balances
- When both the previous account balance and the current entry are debits, the resulting balance remains a debit.
- The collection of accounts in a financial system is known as a ledger.
Post Reference Column
- The Post.Ref column holds significance beyond tracking unposted entries; it is filled with account numbers when posting is complete.
- New account numbers are assigned logically within existing account ranges (e.g., inserting account number 515 between 510 and 520).
Error Corrections
- Incorrect entries cannot simply be corrected by ruling through the item after posting; proper procedures must be followed for accurate bookkeeping.
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Description
Test your knowledge on accounting posting procedures with this true or false quiz. Determine the accuracy of various statements regarding journal corrections and posting references. Ideal for students within accounting courses.
