Accounting Chapter 6

A Journal is like a diary of a business because it is the only place where complete details of a transaction are recorded.

• True

• False

An Accounting Period that begins on July 1 and ends on June 30 is a calendar-year accounting period.

• True

• False

For every transaction recorded in the general journal, these items are always written: date, account titles, amounts, and source document or brief explanation.

• True

• False

If an error is discovered immediately after journalizing, a single line should be placed through the incorrect data and the correct information should be written above it.

• True

• False

Since the debit and credit amounts in a business transaction are the same, the order in which the account titles are recorded in the general journal does not matter.

• True

• False

Never erase an error in a journal entry because an erasure looks suspicious.

• True

• False

The title of the account to be credited is indented from the left edge of the description column so it can be easily distinguished from the debit part of the transaction.

• True

• False

An expense account always has this normal balance side.

• credit

• debit

What is the most appropriate source document for the following situation:  Billed customers for pool services performed during the past week, $2,300.

• Invoice

• Receipt

• Check Stub

• Memo

What is the most appropriate source document for the following situation:                                    Invested in a used truck in the business; the truck is valued at $3,000.

• Invoice

• Receipt

• Check Stub

• Memo