a. b. Accounting period f. Book value g. Compound journal entry h. Cross-referencing i. Depreciation j. Fiscal year Posting Slide Transposition Trial balance d. e. Answer 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. The copying of information from a journal to the ledger. Writing $396 as $936. An entry with one or more debits and/or credits. The period of time for which an income statement is prepared. The twelve month period representing a company's business year. The error that results by adding or deleting zeros in the writing of a number. An informal listing of accounts with their balances to prove debits equal credits. Allocating the cost of an asset over time. Cost of equipment less accumulated depreciation. Inserting the account number in the PR column of the ledger and the journal to indicate the source and the destination of the transaction, respectively. g. h. i. a. b. C. d. e. f. Accounting cycle Accounting period Adjusting Book value Cross-referencing General journal Posting Residual value Slide Transposition Trial balance Worksheet k. 1. Answer 1. 2. A multi-column form used by accountants as an aid in gathering data to complete the accounting cycle. An informal listing of the ledger accounts and their balances that aids in proving the equality of debits and credits. A form used to record business transactions in chronological order. The period of time for which an income statement is prepared. 3. 4. |||| 5. 6. 7. 8. The transferring or copying of information from the journal to the ledger. The error that results in adding or deleting zeros in the writing of a number. Estimated value of an asset after all the allowable depreciation has been taken. The process of calculating the latest up-to-date balance of each account at the end of an accounting period. Cost of equipment less accumulated depreciation. Adding account numbers to the PR columns in the ledger and the journal to indicate the source and destination of each transaction, respectively. 9. 10. a. Adjusting journal entries b. Cancelled check C. Closing entries d. Credit memorandum e. Debit memorandum f. Income summary g. Outstanding checks h. Permanent accounts 1. Petty cash j. Temporary accounts Answer 1. 2. 3. 4. 5. 6. 7. 8. Accounts whose balances are carried over to the next period. An increase to the depositor's balance shown on the bank statement. A fund that allows payment of small amounts without writing checks. Entries that are prepared to (a) reduce or clear all temporary accounts to a zero balance, and (b) update capital to a new balance. A temporary account in the ledger that summarizes revenue and expenses and transfers its balance (net income or net loss) to capital. A decrease to the depositor's balance shown on the bank statement. A check that is not negotiable. Checks written by the company that were not processed by the bank prior to preparation of the bank statement. Accounts whose balances at the end of an accounting period are not carried over to the next accounting period. Journal entries that are needed to update specific ledger accounts to reflect correct balances at the end of an accounting period. 9. 10. Indicate if the following questions are TRUE or FALSE (20 Points) PART IV: Answers 1. 2. 3. 4. The time period a customer is granted to pay the bill is the credit period. All credit sales should be recorded in the accounts receivable account and the accounts receivable subsidiary ledger. Sales Returns and Allowances has a normal debit balance. The accounts payable account also has a subsidiary ledger to which customer accounts are individually posted. Sales discounts are recorded in the general journal. Accounts receivable and accounts payable are known as controlling accounts. A debit memorandum is used to handle customer returns. The discount on an invoice reading $700, 3/10, n/30 paid within 10 days would be $21. Sales Tax Payable is a liability account with a credit balance. 5. 6. 7. 8. 9. 10. Net Sales is computed by adding Gross Sales, Sales Discounts, and Sales Returns and Allowances