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Questions and Answers
Which book of account is used to initially record financial transactions in chronological order?
Which book of account is used to initially record financial transactions in chronological order?
- Ledger
- Trial balance
- Journal (correct)
- Cash book
What is the basis for creating an accounting voucher to record transactions in the journal book?
What is the basis for creating an accounting voucher to record transactions in the journal book?
- Source documents (correct)
- Balance sheet
- Bank statements
- Income statement
What is another term for the journal?
What is another term for the journal?
- General Ledger
- Income Statement
- Book of Primary Entry (correct)
- Balance Sheet
What is the first step in the process of journalizing?
What is the first step in the process of journalizing?
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What are the three types of accounts that can be affected by a transaction?
What are the three types of accounts that can be affected by a transaction?
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Study Notes
Journal and Journalizing
- The journal is the book of original entry where financial transactions are initially recorded in chronological order.
- An accounting voucher is created to record transactions in the journal book based on supporting documents such as invoices, receipts, or bank statements.
- The journal is also referred to as the "daybook".
- The first step in the process of journalizing is to identify and analyze the transaction to determine the type of account affected.
- A transaction can affect one of three types of accounts: asset accounts, liability accounts, or equity accounts.
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Description
Test your knowledge on the meaning and importance of a journal in accounting. Assess your understanding of how financial transactions are recorded in chronological order and how source documents are used to create accounting vouchers.
