Adjusting entries Journal entries made at the end of

an accounting period to adjust

certain balances so that the
statements will accurately reflect the
transactions for the period.

Asset Goods owned by the business for

the purposes of earning income.

Bookkeeping The process of entering essential

facts about a business into books of
original entry.

Capital The difference between assets and

liabilities.

Credit Column The right hand column of a journal

entry, trial balance, or ledger sheet.

Customer A purchaser of goods and services.

Debit Column The left hand column of a journal

entry, trial balance, or ledger sheet.

Expenses The costs of earning revenue.

What three pieces of information should appear at the top of all financial statements?

1. Whom the statement is for (i.e., the name of company)

2. What type of statement (i.e., title of the statement)
3. The period of time to which the statement relates

the theory of double entry bookkeeping.

Double entry bookkeeping means that, for every debit or series of debits, there must always be
a corresponding credit or series of credits.
Explain how T-accounts work.
T-accounts, which look like the letter "T", have the account name at the top, increases are
recorded on one side of the account and decreases are recorded on the other side. The account
balance is the difference between the sums of the left and right sides of the account.

Define net income

Net income is the difference between revenues and expenses when revenues are greater than
expenses.

What type of entry is recorded in the General Journal?

All transactions that are not recorded in any other journal are recorded in the General Journal.
What type of entry is recorded in the Purchases Journal?
Purchases on account.
What is a Vendor's Invoice and what information from the invoice is recorded in the Purchases
Journal?

A Vendor's Invoice is an itemized statement of goods purchased. The following

information is recorded in the Purchases Journal:

 Date of invoice
 Vendor's name
 Vendor number (from the Vendor List)
 Total of invoice
 GST
 Cost of goods

If a vendor's invoice for the purchase of office supplies totaled $51.75, and this total included
$3.60 PST and $3.15 GST, what amount would be recorded in the Office Supplies column of
the Purchases Journal?

The total cost of the office supplies plus the PST would be recorded in the Office
Supplies column.
Total cost – GST = Cost of supplies including PST$51.75 – $3.15 = $48.60
If a sales invoice for the sale of a stereo system totaled $300.00, and this total included
$20.87 PST and $18.26 GST, what amount would be recorded in the Sales column of
the Sales Journal?
The retail price of the stereo system would be recorded in the Sales column.
Total cost – GST – PST
= $300.00 – $20.87 – $18.26
= $260.87

What type of entry is recorded in the Cash Receipts Journal?

All cash received from customers on account and cash from other sources such as cash sales,
interest, and miscellaneous revenue.
Describe what the Payroll Journal is used for, and how it differs from the Payroll Ledger.
The Payroll Journal records the payroll of all the employees, while the Payroll Ledger takes this
information and compiles it for each individual employee.
Why does a company require its employees to complete a Personal Tax Credits Return?
A Personal Tax Credits Return is required by the Income Tax Act for all employees who will be
making a claim for more than the basic personal exemption. From the total claim amount on the
Personal Tax Credits Return, the employee's claim code is identified and used to determine
income tax deductions.
Why is there only one table for Employment Insurance deductions?
Only one table is needed for EI deductions because deductions are based on maximum annual
insurable earnings of $39,000 and a fixed maximum employee premium of $819.
When are employee deductions usually remitted to the government?
Employee deductions are usually remitted to the government within 15 days of the month
following the deduction.
Explain what is meant by the Employer's Share of Payroll Deductions and how the calculation is
made for Canada Pension Plan and Employment Insurance.
Each employer is required by law to pay a share of deductions made by employees for Canada
Pension and Employment Insurance. The employer must match the amount paid by the
employee for Canada Pension, and pay 1.4 times the amount deducted for Employment
Insurance.
What form is used when you remit monthly deductions to the Canada Customs and Revenue
Agency?

The form is called a Form RC107 or PD7A and is used to report the total amount
remitted.
 
In which month would you remit December deductions to the Canada Customs and Revenue
Agency?
You would remit December deductions to the Canada Customs and Revenue Agency the
following January.
Why is it important to make adjustments to the Trial Balance for items such as depreciation,
prepaid expenses, and accruals?
Your Answer:
This means that adjustments  are needed to reduce the asset account and transfer the
consumption of the asset's cost to an appropriate expense account.
When preparing a monthly statement it is important to match revenue and expenses as closely as
possible to arrive at an accurate financial report. Therefore, these items need to be adjusted to
make them reflect actual portions applicable to the period in question.
 
Question 2
Not yet graded / 1 pts
Explain the meaning of a Prepaid Expense.
Your Answer:
Prepaid expenses are future expenses that are paid in advance. On the balance
sheet, prepaid expenses are first recorded as an asset.
A Prepaid Expense is the portion of an expense that was paid for in advance and that is still on
hand at the statement date. It is considered an asset because it represents the unused portion of
the asset that was used to pay for the expense and because it has economic benefit to the
company.
 
Question 3
Not yet graded / 1 pts
Give one example of a prepaid expense and one example of an accrued expense.
Your Answer:
An example of an accrued expense is when a company purchases supplies from a vendor but has
not yet received an invoice for the purchase
Prepaid Expense: InsuranceAccrued Expenses:Professional fees, interest expense, wages payable
 
Question 4
Not yet graded / 1 pts
What accounts are closed when you close the books?
Your Answer:
In accounting, we often refer to the process of closing as closing the books. Only revenue,
expense, and dividend accounts are closed
Temporary revenue and expense accounts, as well as the drawings account.
 
Question 5
Not yet graded / 1 pts
Would you debit or credit the capital account to close a credit balance in the Income Summary
account?
Your Answer:
The Income Summary will be closed with a debit for that amount and a credit to Retained
Earnings or the owner's capital account
Credit
 
Question 6
Not yet graded / 1 pts
What is meant by reversing entries?
Your Answer:
A reversing entry is a journal entry made in an accounting period, which reverses
selected entries made in the immediately preceding period
A process used to reverse an adjustment made at the end of the previous accounting period.

Previous Next
xplain when you would use the General Journal and give an example.
Your Answer:
General Journal is means of posting entries into the General Ledger when other
journals are not approriate. 
example :
 
entering items from the company bank statement, such as bank charges and
interests.POsting
You would use the General Journal to record all items that are not recorded in any other
journal. An example would be a sales return.
 
Question 2
Not yet graded / 1 pts
What is meant by the term posting?
Your Answer:
Posting is a term is used in bookkeeping for copying certain data from the books of
original entry to the ledgers.
Posting is the transfer of data from one source, such as a Journal, to another source,
such as the General Ledger.
 
Question 3
Not yet graded / 1 pts
When do you post to the General Ledger from all journals EXCEPT the General
Journal?
Your Answer:
all entries from the general journal will be posted on teh date they are entered in the
general journal.
You would post from every journal except the General Journal at the end of the month,
once all the journal entries for the month have been made and the journals have been
balanced.
 
Question 4
Not yet graded / 1 pts
List five items that should appear on a customer's Accounts Receivable Ledger.
Your Answer:
Data on customers
Payments and Balancescomapring
 
Any five of the following: customer name, address, telephone number, fax number,
customer number, information regarding payment terms, payments, and balances.
 
Question 5
Not yet graded / 1 pts
Define the term balancing.
Your Answer:
comparing the total of the individual accounts in the accounts receivable ledger with the
total of the accounts receivable control account in the general ledger.
The term is used to verify that all the debit entries equal all the credit entries.
 
Question 6
Not yet graded / 1 pts
What is the purpose of preparing a Trial Balance of the General Ledger accounts?
Your Answer:
The purpose of a trial balance is to ensure that all entries made into an
organization's general ledger are properly balanced. A trial balance lists the
ending balance in each general ledger account. The total dollar amount of the debits
and credits in each accounting entry are supposed to match.
The purpose of preparing a Trial Balance of the General Ledger accounts is to ensure
the General Ledger is in balance and the total of all debits equals the total of all credits.
 
Question 7
Not yet graded / 1 pts
What is a control account?
Your Answer:
A control account is a summary-level account in the general ledger. This
account contains aggregated totals for transactions that are individually stored in 
subsidiary-level-ledger accounts.
A control account is an account in the General Ledger that relates to the balance of the
total accounts in a Subsidiary Ledger. For example, Accounts Receivable in the General
Ledger represents the total of all the customer accounts in the Accounts Receivable
Ledger.
 
Question 8
Not yet graded / 1 pts
Why is it necessary to have an Accounts Receivable Ledger?
Your Answer:
Accounts receivable are the lifeblood of a business's cash flow. ... Your
business's accounts receivable are an important part of calculating your profitability, and
provide the clearest indicator of the business's income. They are considered an asset,
as they represent money coming into the company.
An Accounts Receivable Ledger is necessary for collection and control purposes.
Management needs to know what the customer owes, when it is due, if a discount
applies, and the payment history to make informed business decisions.