Accounting Study Guide: Chapter 4 – Flashcards
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Account Number
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The number assigned to an account
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Correcting Entry
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A journal entry made to correct an error in a previous journal entry
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File Maintenance
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The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
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General Ledger
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A ledger that contains all accounts needed to prepare financial statements
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Ledger
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A group of accounts
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Opening an Account
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Writing an account title and number on the heading of an account
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Posting
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Transferring information from a journal entry to a ledger account
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Proving Cash
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Determining that the account of cash agrees with the balance of the cash account in the accounting records
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Because an account form has columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form.
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True
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The asset division accounts for TechKnow consulting are numbered in the 100s
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True
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The cash account is the first account and is numbered 100
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False
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The second division of TechKnow Consulting's chart of accounts is the owner's Equity division
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False
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The first digit of account numbers for accounts in the owner's equity ledger division is 3
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True
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The last two digits in a 3-digit account number indicate the general ledger division of the account
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True
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When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515
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True
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TechKnow Consulting arranges expense accounts in chronological order in its general ledger
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False
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The two steps for opening an account are writing the account title and recording the balance
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False
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Posting sorts journal entries so that all debits and credits affecting each account are brought together in one place
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True
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Each amount in the Debit and Credit columns of a general journal is posted to the account written in the Account Title column
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True
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The only reason for the Post. Ref. columns of the journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted
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False
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A blank in the Post. Ref. column of the journal indicates that posting for that line still needs to be completed
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True
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Recording the posting reference is always the last step in the posting procedure
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True
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The first step to post an amount from the Credit column is to write the date in the date column of the account
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True
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Whenever the credits in an account exceeded the debits, the balance is a credit
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True
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Cash can be proved at any time
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True
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if the cash balance in the checkbook equals the cash balance in the cash account, cash is proved.
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True
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Journal errors discovered before the entries are posted are corrected by first preparing a memorandum describing the correction to be made
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False
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When making a correcting entry, the same four steps are followed as when making any journal entry
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True
