balance sheet
When posting only the totals are put into the ledger for
special amount columns
Typically, for small businesses charts of accounts are created with a __ digit numbering system
3
A chart of account should include what two items at the top
name of business & chart of accounts
The number assigned to an account
account number
Cash Basis Accounting
companies record revenue when they receive the cash (record an expense- when they pay out cash)
not always accurate fails to record revenue for a company that has performed services not yet received making expenses/revenues unequal. NOT accepted by GAAP
Totals should have a check mark in the post. ref. column
false
To add a new account between 510 Advertising Exp. and 520 Delivery Exp., what's the new account
515
to ensure you've posted the totals for special amount columns you need to add
ledger numbers under the totals
Arranging accounts in the general ledger , assigning account numbers, keeping records current
file maintenance
Adjusting entries
in order for revenues and expenses to be recognized in the period, ensure that the revenue recognition and expenses recognition principles are followed. includes one income statement account and one balance sheet account
An account number in the journal's Post Ref column shows
the account to which an amount is posted
Posting references in a journal are
always placed in an account's Post. Ref. column
The first step in the posting procedure is writing the
entry date in the Date column of the account
Transferring information from a journal entry to a ledger account
posting
deferrals
prepaid expenses, unearned revenue
Posting references in a journal are
always necessary
The first digit in the account number 120 means that the account is in the
asset division of the general ledger
If posting is interrupted, the accounting personnel know to resume posting
on the line with a blank Post. Ref. column in the journal
A list of accounts used by a business
chart of accounts
prepaid expenses
prepaid in cash. debit to expense, credit to asset
If all separate amounts on a journal line are recorded in special amount columns n
neither amount is posted individually
Separate amounts in the Sales Credit column of a journal are
not posted, only totals are posted
When accounts are arranged in a general ledger, assigned numbers, and kept up to date this is
doing file maintenance
A form for recording transactions in chronological order
journal
periodicity assumption
assumption that economic life of a business can be divided into periods. Determine the impact of each transaction on the specific accounting period