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Questions and Answers
What is the primary purpose of a general journal?
What is the primary purpose of a general journal?
- To track inventory levels.
- To record unusual or non-routine transactions. (correct)
- To summarize daily sales.
- To record all business transactions.
A general journal entry requires a narrative explanation.
A general journal entry requires a narrative explanation.
True (A)
List four details that a journal entry records.
List four details that a journal entry records.
The date, the account(s) debited, the account(s) credited, and the amounts involved.
The term 'journal entry' describes any ______ entry transaction.
The term 'journal entry' describes any ______ entry transaction.
Match the transactions with the appropriate journal entry descriptions:
Match the transactions with the appropriate journal entry descriptions:
Why is a narrative explanation necessary for each general journal entry?
Why is a narrative explanation necessary for each general journal entry?
General journals are only used in computerized accounting systems.
General journals are only used in computerized accounting systems.
In the context of accruing for annual leave, the company is accruing the cost of the ______ of days of leave outstanding at the employees' rate of pay.
In the context of accruing for annual leave, the company is accruing the cost of the ______ of days of leave outstanding at the employees' rate of pay.
Match the account with its role in a payment transaction.
Match the account with its role in a payment transaction.
Why do companies need to make an accrual for annual leave?
Why do companies need to make an accrual for annual leave?
Accruing wages and salaries is always recorded as a debit to annual leave accrual and a credit to wages and salaries.
Accruing wages and salaries is always recorded as a debit to annual leave accrual and a credit to wages and salaries.
What account is debited when making a journal entry to accrue wages and salaries for annual leave?
What account is debited when making a journal entry to accrue wages and salaries for annual leave?
The entry to write off $1000 from a customer account and allocate it to allowance for credit losses account will ______ the 'allowance for credit losses' account.
The entry to write off $1000 from a customer account and allocate it to allowance for credit losses account will ______ the 'allowance for credit losses' account.
Which of the following is NOT a typical use of the Trade Receivables Control Account?
Which of the following is NOT a typical use of the Trade Receivables Control Account?
The General Journal only records transactions that have a direct impact on the cash balance of a company.
The General Journal only records transactions that have a direct impact on the cash balance of a company.
The provided text includes an example of Hair by Fiona Middleton; if Hair by Fiona Middleton paid electricity expenses, what accounts should be debited and credited in the general journal?
The provided text includes an example of Hair by Fiona Middleton; if Hair by Fiona Middleton paid electricity expenses, what accounts should be debited and credited in the general journal?
What would be the journal entry recorded on accrual for annual leave, assuming that ABC Co. employs five members of staff, paying each of them $1000 per month, each employee is entitled to 20 days' leave per annum, and one employee has only taken 10 days' leave during the year?
What would be the journal entry recorded on accrual for annual leave, assuming that ABC Co. employs five members of staff, paying each of them $1000 per month, each employee is entitled to 20 days' leave per annum, and one employee has only taken 10 days' leave during the year?
In a sole proprietorship, like Hair by Fiona Middleton, the owner's capital account and business accounts are interchangeable for accounting purposes.
In a sole proprietorship, like Hair by Fiona Middleton, the owner's capital account and business accounts are interchangeable for accounting purposes.
If a company discovers that it has overpaid a supplier invoice in a previous accounting period within the accounting system, what general ledger accounts will be credited and debited when correcting it using the general journal?
If a company discovers that it has overpaid a supplier invoice in a previous accounting period within the accounting system, what general ledger accounts will be credited and debited when correcting it using the general journal?
The general journal is used to record ______ that are not part of the main business transactions.
The general journal is used to record ______ that are not part of the main business transactions.
A business uses accounting software. If the software automatically generates a journal entry for a sale, what does this indicate about the nature of the sale transaction?
A business uses accounting software. If the software automatically generates a journal entry for a sale, what does this indicate about the nature of the sale transaction?
When an employee is paid salary during their annual leave, a journal entry is required to transfer the amount from the wages and salaries expense account to the annual leave expense account.
When an employee is paid salary during their annual leave, a journal entry is required to transfer the amount from the wages and salaries expense account to the annual leave expense account.
Based solely on the provided information, provide an example of a transaction that would require a journal entry in the general journal.
Based solely on the provided information, provide an example of a transaction that would require a journal entry in the general journal.
If a business consistently uses the trade receivables accounts, what could this indicate regarding its sales policy?
If a business consistently uses the trade receivables accounts, what could this indicate regarding its sales policy?
If a purchase is completed using cash, the sales account should be debited.
If a purchase is completed using cash, the sales account should be debited.
Trade ______ account is used to track the products sold from the business.
Trade ______ account is used to track the products sold from the business.
Match the term with its description.
Match the term with its description.
The trade receivables control account is the best choice for recording individual customer balances.
The trade receivables control account is the best choice for recording individual customer balances.
The ______ voucher form is used to enter information for accounts.
The ______ voucher form is used to enter information for accounts.
Match the item and side to show whether the account is a debit or credit, assuming a cash purchase was made with cash coming from the bank
Match the item and side to show whether the account is a debit or credit, assuming a cash purchase was made with cash coming from the bank
What is a General Journal?
What is a General Journal?
Typically, what type of transactions would not be part of the main business transactions?
Typically, what type of transactions would not be part of the main business transactions?
What is a narrative explanation?
What is a narrative explanation?
What is the distinction between a general ledger and a general journal?
What is the distinction between a general ledger and a general journal?
What types of transactions are recorded in the general journal?
What types of transactions are recorded in the general journal?
What is the general journal particularly useful for?
What is the general journal particularly useful for?
Why is annual leave accrued?
Why is annual leave accrued?
Flashcards
General Journal
General Journal
A journal used to record transactions not part of the main business activities, corrections, or year-end adjustments.
Journal Entry
Journal Entry
A formal way to record a double-entry transaction, including date, accounts debited and credited, amounts, and a narrative.
Narrative Explanation
Narrative Explanation
Explanation accompanying each journal entry, indicating purpose and authority outside main business transactions.
Accrual for Annual Leave
Accrual for Annual Leave
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Study Notes
The General Journal
- The general journal is used to record transactions not part of the main business transactions.
- It's a mechanism for recording individual transactions, making corrections, or adjusting year-end balances.
- The general journal is used to record individual double entries.
- These entries can be manually entered by an accounting technician or automatically generated by accounting software.
- The general journal keeps a record of unusual or non-routine movement between accounts.
- It is used to record double entries not arising from main business transactions, such as error corrections.
- A "journal entry" or "journal" describes any double entry transaction and records details.
- Details include: the date, account(s) debited, account(s) credited, amounts, and a narrative.
Format of a General Journal Entry
- Date
- Account to be debited
- Account to be credited
- A narrative explanation accompanies each general journal entry
- The narrative explains the purpose and authority of transactions outside the main business activities.
- Some organizations require a manual journal form (or voucher form) authorized by a staff member (e.g., Financial Controller).
Journal for Annual Leave
- Employees are entitled to paid annual leave (e.g., 20 days per year).
- If employees haven't used all leave by year-end, the company accrues the cost of the outstanding leave.
- The company is accruing the cost of the number of days of leave outstanding at the employees' rate of pay.
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