General Journals and Ledger Accounts Quiz

General Journal

• A function of the General Journal is to record transactions and events of a company in a chronological order.

Ledger Account

• The purpose of a Ledger Account is to provide a summary of all transactions related to a particular asset, liability, equity, revenue, or expense.

General Ledger

• The General Ledger consists of a collection of all Ledger Accounts, which in turn, contain the entire transactions and balances of a company.

T-Account

• The purpose of a T-Account is to provide a visual representation of a Ledger Account, with debits on the left side and credits on the right side, helping to analyze and record transactions.

Debit and Credit

• A debit is an entry that increases an asset or expense, or decreases a liability or equity, whereas a credit is an entry that increases a liability or equity, or decreases an asset or expense.

Trial Balance

• The trial balance is a list of all general ledger accounts and their corresponding debit or credit balances, used to ensure that the debits equal the credits, thus verifying the accuracy of the recording process.

Chart of Accounts

• The chart of accounts is a systematic organization of all Ledger Accounts, providing a comprehensive framework for classifying and recording transactions.

Journalizing

• Journalizing is the process of recording transactions and events in a General Journal, which involves analyzing the transaction, determining the accounts affected, and writing the journal entry.

Journal Entry

• A journal entry is a record of a transaction or event, including the date, accounts affected, and the corresponding debit and credit amounts, which is used to update the Ledger Accounts.

Cross-Referencing

• Cross-referencing is the process of linking a Ledger Account to its corresponding journal entry, allowing for easy tracing and verification of transactions.