Accounting Chapter 7

Opening an account in a ledger involves writing the account title and the account number on the account form.

• True

• False

Every posting requires the year, month, and day to be entered in the Date column of the ledger account for every transaction.

• True

• False

Every amount posted will either increase or decrease the balance of a ledger account.

• True

• False

The notation “G3 or J3” in the Posting Reference column of a ledger account indicates the data was posted from general journal page 3.

• True

• False

A credit posting to the Office Equipment account will result in an increase to that account.

• True

• False

An error in posting may cause:

• income to be overstated or understate in the income statement

• a business to pay too much to a vendor

• cash on hand to be less than the balance in the cash amount

• all of the answers are correct

When preparing a trial balance, which of the following would not be considered a procedure?

• check to see if both columns are equal

• double rule (line) both columns

• write the general ledger account names in the work sheet account name column

• all of these are correct procedures

What is the purpose of a trial balance?

• to prove the cash in bank account has the correct balance

• to correct any errors in the general journal

• to prove the ledger debit and credit balance are equal

• to prove that amounts were correctly posted from the journal

When the beginning a new page for a General Ledger account, placing a check mark in the Post. Ref column indicates that

• you verified the balance is correct

• the amount entered is not being posted from a journal

• you verified all the lines from the previous page were filled

• that the account is ready to be posted

When posting in the general ledger, the balance of the account should always be on what side?

• credit

• debit

• normal balance side

• both the debit and credit depending on balance (negative or positive)