Race#1
What is posting?
The process of transferring the accounting entry form the journal to the ledger.
What is the name of the account that is more convenient than a t-account?
Balance Column Account.
What is balance column account?
It had three money columns: one for the credit amounts, one for the credit amounts, and a separate one for three balance.
What is Forwarding an account?
Forwarding is the process of continuing an account in a new account form by carrying forward the date and the balance from the completed page.
What is opening an account?
Preparing an account and placing it in its proper place in the ledger.
What has to be done if the sequence of balancing steps is completed but the ledger is still not balanced?
Repeat the 5 step procedure again
Could a trial balance of 2430 be caused by a decimal point error?
Yes because 2430 is divisible by 9.
Name the first four steps in the accounting cycle
1. Transactions occur
2. Accounting entries recorded in the journal
3. Journal entries posted to the ledger accounts
4. Ledger balanced by means of a trial balance
Describe cross referencing?
Cross referencing is the recording of the journal page number in the account and the recording of the account number in the journal
Name the 2 accounting books in the posting process
Ledger and journal
What are the 3 reasons for cross referencing?
1. Allows the journal to be traced to the accounts they have been posted
2. Allows entries in accounts to be easily traced back to their source in the general journal
3. If the posting process is interrupted, cross-referencing makes it easy to tell where to begin again
If the trial balance is not an even amount, which of the quick tests can be eliminated?
Divisible by 2 quick test.
Where are accounting entries first recorded
Journal
The __________ is posted into the ledger accounts
Journal Entries
What is a correcting journal entry?
It is an accounting entry that cancels out the effect of an error.
What kind of error does a trial balance that's off by 10$ suggest?
Error in addition!
When forwarding an account, what two things must you make sure you carry forward?
Make sure to carry forward the date and balance for the appropriate account.
What are the 5 steps of trial balance out of balance
1. Equal debit and credit amounts are recorded in a journal entry.
2. Debit and credit journal amounts are posted to debit and credit columns in ledger accounts.
3. New ledger account balances are calculated each time amounts from the journal are posted.
4. Final balances of each ledger account are identified as either a debit or credit. Then they are transferred to debit and credit columns of the trial balance.
5. The totals of the two columns in the trial balance are calculated. If both totals are the same, the ledger is in balance are then used to prepare the income statement and balance sheet
What happens mathematically when an amount is posted to the wrong side of an account?
The trial balance difference is always twice as large as the amount of the error.
What is a decimal point error?
It is a mistake caused by misplacing the decimal. This can cause your final balance to be under or over by 10, 100, 1000.....
What must be done before applying quick tests to find errors?
You must calculate the trial balance.
What are the sequence of balancing steps?
1. Re-add the trial balance columns
2.Check the transfer of account balances from the ledger to the trial balance.
3.Re-add the accounts from the points of the previous balance. Double-check the account indicator.
4.Check postings from the point of the previous balance
5.Check to see that each individual journal entry balances
Why do we not erase errors in the books of accounts?
This might make auditors suspicious when they review the records.
What is the P.R Column used for?
A posting reference is a column in the general journal that is used to indicate when entries have been posted into the ledger accounts.
What are the 6 steps of posting?
1.Record the date
2.Record the page # of the journal
3.Record the amount debited/credited
4.Calculate the new balance
5.Enter the balance into the balance column
6.Record this amount in the journal