Ledger Accounts
Accounts can be designed on paper to form a paper ledger
Accounts can be prepared in no more than a single method.
Beginning values are placed on the same side as the balance sheet
Accounts can be prepared in no more than a single method.
Truth: Accounts can be prepared in multiple ways, such as electronically or paper
Debit is the left side of an account
Any increase in an account is a debit
An asset increasing is a debit
Any increase in an account is a debit
Truth: Assets, Expenses and Drawings increasing is a debit
Pin totals are always circled
The name of the account is written at the top of the ledger
Pin totals are always written as a debit
Pin totals are always written as a debit
Truth: Pin totals can be debit or credit.
A Trial Balance is used to see if the value of the debits and credits balance
When talking about a trial balance we use the word taking off.
The date on a trial balance is written as year ended
The date on a trial balance is written as year ended
Truth: The date of a trial balance is written as the day it is made on
A ledger is a group of accounts
If the trial balance totals are even numbers, then it is in balance
In the double-entry system, every transaction is recorded in two steps
If the trial balance totals are even numbers, then it is in balance
Truth: If the trial balance totals are equal, then it’s in balance
A ledger is a group or file of accounts
A separate account is created for every item on a balance sheet
In a T-account, beginning values of Bank loans, and Capital, are recorded on the left side.
In a T-account, beginning values of Bank loans, and Capital, are recorded on the left side.
Truth: Beginning values for those accounts are recorded on the right side.
The total debits and credit entries must be equal
An accounts receivable decreasing is a credit
Transactions affect only one debit and one credit
Transactions affect only one debit and one credit
Truth: Transactions affect AT LEAST one debit and credit
A/R is debited for a sale on account
To find the pin total, add the smaller number to the larger
Bank is credited for a payment on account
To find the pin total, add the smaller number to the larger
Truth: To find the pin total, subtract the smaller total from the larger.
A trial balance that is in balance means there are no errors
A Trial Balance is a listing of account balances in a ledger.
A heading must show the name of the individual or business, the tittle “Trial Balance” and the date.
A trial balance that is in balance means there are no errors
Truth: Can still be errors, just ones that still balance, such as accidentally switching a debit for a credit and the credit as a debit.
The trial balance is out of balance if the debits and credits aren’t equal
Taking off a trial balance means to make a trial balance
An item purchased on account is called a sale on account
An item purchased on account is called a sale on account
Truth: An item purchased on account is called a purchase on account
A transaction recorded in a ledger, does not require a corresponding transaction.
An account is a record that documents each change to items in the accounting equation
Accounts can be created electronically in a software program
A transaction recorded in a ledger, does not require a corresponding transaction.
Truth: A transaction always needs at least one corresponding transaction.
Drawings increasing is a credit
Drawings increasing is a debit
A/P is a credit
Drawings increasing is a credit
Truth: Drawings increasing is a debit
Exceptional balances don’t last long due to ordinary business activities
A/P is credited for a purchase on account
Bank is credited for a receipt on account
Bank is credited for a receipt on account
Truth: Bank is debited for a receipt on account
If a ledger is out of balance, there is at least one error in the accounts
Numbers are placed on the debit or credit side of a trial balance according to the placement on a ledger
A heading must show the name of the individual or business, and the date. Nothing more.
A heading must show the name of the individual or business, and the date. Nothing more.
Truth: The heading must show which type of accounting document it is. “Who, what, when”
Money paid to decrease amount owed is a payment on account
An account balance gives the dollar value of an account
An account is a group or file of ledgers
An account is a group or file of ledgers
Truth: An account is a record that documents each change to items in the accounting equation.
Each individual balance sheet item is given its own T-account with the name of the item at the top
In a T-account, beginning values for an items such as cash or supplies are recorded on the right side.
The T-Account is mainly used to help you understand the accounting theory
In a T-account, beginning values for an items such as cash or supplies are recorded on the right side.
Truth: Cash/supplies are recorded on the left side of the ledger.
The double entry system of accounting affects at least two accounts
The word credit comes from the word credere
For each type of account, record decreases on its beginning value side and increases on the other side
For each type of account, record decreases on its beginning value side and increases on the other side
Truth: In most cases, accounts increase on their beginning value side and decreases on the other.
An exceptional balance occurs on A/P if a business overpays an account
To find the pin total subtract the smaller number from the larger
Bank is debited for a payment on account
Bank is debited for a payment on account
Truth: Bank is credited for a payment on account
The first three steps to fix a trial balance are:
1. Re-add the trial balance
2. Check the account balances from the ledger against those on the trial balance
3. Check that there is a balanced accounting entry for each transaction
Check that there is a balanced accounting entry for each transaction
Truth: 3. Recalculate the account balances
An accounting entry is all the changes in the accounts caused by one transaction
A ledger is a group of asset accounts
An account balance shows whether an account is a debit or credit value
A ledger is a group of asset accounts
Truth: A ledger is a group of accounts, not just assets
Accounts can be designed on cards to form a card ledger
Ledgers along with computer software accounts dominate the business world
Pin totals cannot be used to find the net income or net loss of a business
Pin totals cannot be used to find the net income or net loss of a business
Truth: Pin totals of expenses and revenue are used to find net income/loss.
The balance of an account that is not zero must be a debit or a credit
For each transaction, all of the account changes together must balance
The word debit comes from the latin word derebe
The word debit comes from the latin word derebe
Truth: The word debit comes from the latin word debere.
Exceptional accounts occur frequently
A debit account with a credit balance is either an error or an exceptional balance
An exceptional balance on A/R is a temporary liability
Exceptional accounts occur frequently
Truth: Exceptional accounts are rare, for example if a business goes into debt, their bank account can be a credit
The ledger is not in balance if the total of added Debit Balances doesn’t equal the total of added Credit Balances.
As long as a Trial Balance is not out of balance, it means no mistakes have not been made
Once the Dr Total and Cr Total equal each other, you must wright the totals and finish by drawing a rule above and a double rule below them to indicate a final balance amount.
As long as a Trial Balance is not out of balance, it means no mistakes have not been made
Truth: The fourth step in taking off the trial balance is to add up the total credits and debits.
The starting balance of each account is called the pin total
Pin totals are also called pencil footings
Money received from a debtor to reduce amount owed is a receipt on account`
The starting balance of each account is called the pin total
Truth: The ending total after all transactions have been recorded and calculated is called the pin total