College Accounting Chapters 1 27 22nd Edition Heintz Test Bank 1

Chapter 4—Journalizing and Posting Transactions
COLLEGE ACCOUNTING CHAPTERS 1 27

22ND EDITION HEINTZ
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1. The flow of data through the accounting information system includes analyzing transactions, journalizing, posting, and
preparing a trial balance.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: COLL.HEIN.17.12 - LO: 4-1
ACCREDITING STANDARDS: AICPA FN-Measurement
BUSPROG: Communication
TOPICS: ACBSP: APC-05-Accounting Cycle
KEYWORDS: Bloom's: Remembering
NOTES: 1 min.
2. An account in the chart of accounts is assigned a number at random.

a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
TOPICS: ACBSP: APC-06-Recording Transactions
Cengage Learning Testing, Powered by Cognero Page 1
NOTES: 1 min.
3. Source documents begin the process of entering transactions in the accounting system.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
4. Source documents provide objective, verifiable evidence of business transactions.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
5. Copies of sales tickets or sales invoices issued to customers or clients provide information about sales of goods or
services.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
6. Information about cash disbursements can be obtained from check stubs and carbon copies of checks.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Understanding
NOTES: 1 min.
7. The purpose of a journal is to provide a chronological record of all transactions completed by the business.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
8. The chart of accounts includes the account titles in numerical order.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
9. The Description column of a two-column journal is used to enter the titles of the accounts affected by each
transaction, together with a description of the transaction.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
10. A separate line in the two-column journal should be used for each account title.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
11. Entering transactions in a journal is called posting.

a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
12. To make the posting process easier, posting reference entries are made at the same time that transactions are
entered in the two-column journal.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
13. The posting reference, amount, and description are the three items of information about each transaction that should
be entered in the ledger accounts.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
14. The main advantage of a two-column account is that it maintains a running balance.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
15. It is permissible to enter information about a transaction in the ledger accounts first, before entering the information
in the journal.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
COLL.HEIN.17.16 - LO: 4-5
NOTES: 1 min.
16. The journal provides the information needed to transfer the debits and credits to the accounts in the ledger.
a. True

b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
17. The ledger is a reliable source of information only when all of the transactions entered in the journal have been
posted.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
18. The purpose of a trial balance is to prove that the totals of the debit and credit balances in the ledger accounts
are equal.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
19. A complete set of all the accounts used by a business is known as the general ledger.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
20. When the trial balance indicates that the ledger is in balance, you can assume there are no errors in the ledger.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
21. In some cases, erasures are better for corrections than the ruling method.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
22. A list of all the accounts used by a business is called a trial balance.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
23. The chart of accounts includes assets, liabilities, and owner's equity accounts only.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
24. Source documents provide the input for the accounting process.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
25. Almost any document that provides information about a business transaction is included in the chart of accounts.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
26. Purchase invoices received from suppliers provide information about cash payments.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
27. The process of copying the debits and credits from the journal to the ledger accounts is known as posting.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
28. After posting journal information to the ledger accounts, a check mark should be entered in the Posting Reference
column of the journal to indicate that the transaction item has been posted.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
29. A two-column journal has only two amount columns—one for the amount of the entry and one for the running
balance.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
30. Each entry in the journal affects two or more accounts.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
31. When entering titles of accounts in the two-column journal, the account to be credited is entered first and the account
to be debited is entered second.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
32. No entries are made in the Posting Reference column in a two-column journal when journalizing.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
33. Firms are more likely to use a four-column journal account than T accounts.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
34. Entering the account number in the Posting Reference column of the journal is the first step in the posting process.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
35. A trial balance can only be accurately prepared on the last day of the accounting period after all transactions
have been entered.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
36. Transactions which do not affect the cash account do not need to be entered in the journal, since they do not affect
net income or loss.
a. True

b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
37. The general ledger is kept to supply management with desired information in summary form.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
38. All transactions must be posted before preparing a trial balance.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
39. An erasure may suggest that you are hiding something.

a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
40. The flow of financial data through the accounting information system does NOT include
a. analyzing transactions.
b. journalizing and posting transactions.
c. preparing a trial balance.
d. receiving payment for all accounts receivable.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
41. A chart of accounts does NOT include

a. assets.
b. liabilities.
c. owner's equity.
d. names of suppliers.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
42. Purchase invoices received from suppliers provide information about

a. cash receipts.
b. sales of goods.
c. purchases of goods or services.
d. cash payments.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy

NOTES: 1 min.
43. When delivery equipment is purchased on account, the transaction to be entered by the purchaser includes
a. debiting Delivery Equipment and crediting Accounts Payable.
b. debiting Delivery Expense and crediting Cash.
c. debiting Delivery Expense and crediting Accounts Payable.
d. debiting Delivery Equipment and crediting Cash.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
44. A chronological record of financial transactions expressed as debits and credits to accounts is provided by the
a. ledger.
b. journal.
c. balance sheet.
d. trial balance.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
45. The month in the journal is recorded

a. with every transaction.
b. as the first entry on a page.
c. for the first and last transaction of the month.
d. for the last transaction of the month.
ANSWER: b
POINTS: 1

DIFFICULTY: Easy
NOTES: 1 min.
46. Forms and papers that provide information about a business transaction are called
a. ledgers.
b. accounts.
c. source documents.
d. journals.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
47. Because the first formal accounting record of a transaction is made in a journal from source document information,
a journal is commonly referred to as a(n)
a. ledger.
b. account.
c. cross-reference.
d. book of original entry.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
48. For EVERY transaction, the accountant enters the

a. year, month, and day.
b. month and day.
c. day.
d. year and day.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
49. The transaction to record payment for delivery equipment that was purchased on account in the previous month
would include
a. debiting Cash and crediting Accounts Receivable.
b. debiting Cash and crediting Accounts Payable.
c. debiting Accounts Payable and crediting Cash.
d. debiting Delivery Equipment and crediting Cash.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
50. Journalizing does NOT include

a. debiting account(s) that are affected.
b. crediting account(s) that are affected.
c. posting the debits and credits to the accounts.
d. entering the date.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
51. Copies of sales tickets or sales invoices issued to customers or clients provide information about
a. sales of goods or services.
b. purchases of goods or services.
c. cash receipts.
d. cash payments.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
52. Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information
about
a. cash payments.
b. cash receipts.
c. accounts payable.
d. purchases of goods or services.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
53. The accounts in the chart of accounts are arranged in

a. alphabetical order.
b. numerical order.
c. chronological order.
d. the order they are created.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
54. The steps in the journalizing process include all of the following EXCEPT
a. enter the balance.
b. enter the debit.
c. enter the date.
d. enter the credit.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
55. Purchase invoices received from suppliers provide information about

a. cash payments.
b. cash receipts.
c. sales of goods or services.
d. purchases of goods or services.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
56. The simplest form of journal is one with

a. four columns.
b. three columns.
c. two columns.
d. one column.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
57. If the owner of a company invested cash in a business enterprise, the transaction would include
a. debiting Cash and crediting Capital.
b. debiting Capital and crediting Cash.

c. debiting Cash and crediting Revenue.
d. debiting Revenue and crediting Cash.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
58. Sales revenue received in cash is entered by

a. debiting Cash and crediting Sales Revenue.
b. debiting Sales Revenue and crediting Cash.
c. debiting Cash and crediting Accounts Payable.
d. debiting Accounts Payable and crediting Cash.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
59. Every entry in the journal should include all of the following EXCEPT
a. the title of each account affected.
b. the amounts.
c. a brief description.
d. the balance of the accounts affected.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
60. The Posting Reference column of the journal provides a cross-reference between the
a. ledger and accounts.

b. journal and ledger.
c. ledger and financial statements.
d. journal and financial statements.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
61. The Item column in the general ledger is used to describe special entries not including the following entries?
a. Adjusting entries
b. Reversing entries
c. Correcting entries
d. Forwarding entries
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
62. Posting from the journal to the ledger does NOT involve which of the following steps?
a. Enter the date of each transaction in the accounts.
b. Enter the amount of each transaction in the accounts.
c. Enter the page of the journal from which each transaction is posted in the accounts.
d. Enter the description of the entry.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
63. Instead of T accounts, businesses are more likely to use a

a. chart of accounts.
b. balance sheet.
c. four-column account.
d. special journal.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
64. Cash is used to pay for a car for personal use by the owner. The transaction includes
a. debiting Cash and crediting Drawing.
b. debiting Drawing and crediting Cash.
c. debiting Capital and crediting Cash.
d. debiting Car Expense and crediting Cash.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
65. Corrections in accounts should be made by

a. correction fluid.
b. neat erasure.
c. the ruling method.
d. a permanent marker.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.

66. Corrections in accounts should NOT be
a. traceable.
b. initialed.
c. ruled.
d. covered completely.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
67. The payment of a utility bill (like electricity) for the month would include
a. debiting Capital and crediting Accounts Payable.
b. debiting Cash and crediting Utilities Expense.
c. debiting Utilities Expense and crediting Accounts Payable.
d. debiting Utilities Expense and crediting Cash.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
68. If cash is paid for worker salaries, the transaction includes

a. debiting Salaries Expense and crediting Cash.
b. debiting Salaries Expense and crediting Accounts Payable.
c. debiting Salaries Expense and crediting Capital.
d. debiting Cash and crediting Salaries Expense.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.

69. To find an error, you should do all of the following EXCEPT
a. double-check every entry.
b. find the difference between debits and credits.
c. erase questionable entries.
d. retrace any math computations.
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
70. Organize a chart of accounts, using correct headings from the list of account titles below:
Accounts Payable
Accounts Receivable
Building
Cash
Equipment
Insurance Expense
Prepaid Insurance
Rent Expense
Service Fees
Dunlop, Capital
Dunlop, Drawing
Supplies
Wage Expense
Wages Payable
ANSWER:
Chart of Accounts
Assets Owner's Equity
Cash Dunlop, Capital
Accounts Receivable Dunlop, Drawing
Prepaid Insurance
Supplies Revenues
Building Service Fees
Equipment
Liabilities Expenses
Accounts Payable Insurance Expense
Wages Payable Rent Expense
Wages Expense
POINTS: 1
DIFFICULTY: Easy

BUSPROG: Analytic
NOTES: 5 min.
71. In the two-column general journal page below, each capital letter represents a part of a journal entry. Write
the proper letter next to the item in the list below to identify the proper part of the journal entry.
GENERAL JOURNAL Page 1
G
H I J O M
K P N
L
1. Ledger account number of account credited

2. Month
3. Explanation
4. Title of account debited
5. Year
6. Day of the month
7. Title of account credited
8. Amount of debit
9. Amount of credit
10. Ledger account number of account debited
ANSWER: 1. P
2. H
3. L
4. J
5. G
6. I
7. K
8. M
9. N
10. O
POINTS: 1
DIFFICULTY: Easy
NOTES: 5 min.
72. Prepare general journal entries to record the following transactions. Omit the explanations after each entry.
Mar. 1 J. Lynch invested in a neighborhood movie house. Land, $100,000; building,
$400,000; and equipment, $50,000; totaling $550,000.
2 Rental expense for the movies shown for the month, $6,000 on account.
5 Ticket sales for the month, $22,000 cash.
8 Wages paid for the month, $11,000.
12 Purchased a new popcorn machine, $3,300 on account.
17 Paid monthly fee to maintenance company, $2,700.
23 Rented the theater to an organization for a night. Billed them $2,300.
30 Paid $600 on the amount owed for the new popcorn machine.
ANSWER: Mar. 1 Land 100,000
Building 400,000
Equipment 50,000
J. Lynch, Capital 550,000
2 Rental Expense 6,000
Accounts Payable 6,000
5 Cash 22,000
Ticket Sales 22,000
8 Wages Expense 11,000
Cash 11,000
12 Equipment 3,300
17 Maintenance Expense 2,700
Cash 2,700
23 Accounts Receivable 2,300
Rent Revenue 2,300
30 Accounts Payable 600
Cash 600
POINTS: 1
DIFFICULTY: Easy
BUSPROG: Analytic
NOTES: 10 min.
73. Prepare general journal entries to record the following transactions. Omit explanations.
Jan. 3 Paid office rent, $1,600.
4 Bought a truck costing $50,000, making a down payment of $7,000.
6 Paid wages, $3,000.
7 Received $16,000 cash from customers for services performed.
10 Paid $4,100 owed on last month's bills.
12 Billed credit customers, $5,300.
17 Received $1,800 from credit customers.
19 Taylor Gordon, the owner, withdrew $1,700.
23 Paid $700 on amount owed for truck.
29 Received bill for utilities expense, $255.
ANSWER: Jan. 3 Rent Expense 1,600

Cash 1,600
4 Truck 50,000
Cash 7,000
6 Wages Expense 3,000
Cash 3,000
7 Cash 16,000
Service Fees 16,000
10 Accounts Payable 4,100
Cash 4,100
12 Accounts Receivable 5,300
Service Fees 5,300
17 Cash 1,800
Accounts Receivable 1,800
19 Taylor Gordon, Drawing 1,700
Cash 1,700
23 Accounts Payable 700
Cash 700
29 Utilities Expense 255
Accounts Payable 255
POINTS: 1
DIFFICULTY: Easy
BUSPROG: Analytic
NOTES: 15 min.
74. Prepare a corrected trial balance by changing incorrect amounts and placing each amount in the proper column.
Davenport's European Tours
Trial Balance
October 31, 20--
Account Title Debit Credit
Cash 15,560
Accounts Receivable 406
Supplies 246
Prepaid Insurance 589
Equipment 24,450
Davenport, Capital 30,500
Davenport, Drawing 1,800
Repair Fees 9,274
Wages Expense 4,250
Rent Expense 1,300
Advertising Expense 290
Utilities Expense 495 ______
47,586 47,586
a. Be sure all accounts have been listed with the appropriate debit or credit balance and check
column totals.
b. The debits to the Cash account are $36,796, and the credits are $29,009.
c. A $600 payment to a creditor was entered in the journal, but was not posted to the
Accounts Payable account. Cash was properly posted.
d. The Advertising Expense total has a transposition error of $81.
e. Accounts Receivable contains a slide error.
ANSWER:
Davenport's European Tours
Trial Balance
October 31, 20--
Cash (b) 7,787
Accounts Receivable (e) 4,060
Supplies 246
Prepaid Insurance 589
Equipment 24,450
Accounts Payable (c) 5,412
Davenport, Capital 30,500
Davenport, Drawing (a) 1,800
Repair Fees 9,274
Wages Expense 4,250
Rent Expense 1,300
Advertising Expense (d) 209
45,186 45,186
POINTS: 1
DIFFICULTY: Moderate
ACCREDITING STANDARDS: AICPA FN-Reporting
BUSPROG: Analytic
NOTES: 15 min.
75. The following transactions occurred at Forever Green Lawn Service. Identify which account would be debited and
credited to record each transaction. Write the identifying letters in the proper columns. The first transaction has been
completed as an example.
A. Cash
B. Accounts Receivable
C. Supplies
D. Equipment
E. Accounts Payable
F. Fees Income
G. Rent Expense
H. Salaries Expense
I. Telephone Expense
Debit Credit
Ex. Issued a check for monthly rent. G A
1. Purchased supplies on account. ____ ____
2. Purchased new equipment, issuing a check for a
down ____ ____
payment, with balance due in thirty days.
3. Provided services on account. ____ ____
4. Purchase supplies for cash. ____ ____
5. Issued a check to pay a creditor on account. ____ ____
6. Collected payment from credit customer. ____ ____
Issued checks to pay employees their monthly ____ ____
7.
salaries.
8. Performed services for cash. ____ ____
9. Received cash for damaged supplies returned. ____ ____
10. Issued a check to pay the telephone bill. ____ ____
ANSWER: Debit Credit
1. C E
2. D A, E
3. B F
4. C A
5. E A
6. A B
7. H A
8. A F
9. A C
10. I A
POINTS: 1
DIFFICULTY: Easy
BUSPROG: Analytic
NOTES: 4 min.
76. George Smyth opened a computer repair business on Apr. 1, 20--. During the first month of operations, the firm had
the following transactions. Record these transactions on page 1 of the general journal. Omit explanations.
Post appropriate transactions to the general ledger.
Apr. 1 George Smyth invested $30,000 cash in the business.
2 Paid rent for April, $2,100.
8 Bought equipment for $12,000 and issued a check for $3,000 as a down payment.
12 Performed services for $3,200 in cash, and $1,200 on credit.
19 Paid electric bill, $225.
25 Received $900 on account from credit customers.

JOURNAL Page 1
Post
Date Description Ref. Debit Credit
GENERAL LEDGER
Account Cash Account No. 101
Balance
Post
Date Item Debit Credit Debit Credit
Ref.
Account Accounts Receivable Account No. 122

Post Balance
Date Item Ref. Debit Credit Debit Credit
Account Equipment Account No. 181

Post Balance

Account Accounts Payable Account No. 202

Post Balance
Account George Smyth, Capital Account No. 311

Post Balance
Account Service Fees Account No. 401

Post Balance
Account Rent Expense Account No. 521

Post Balance
Account Electricity Expense Account No. 533

Post Balance
ANSWER:
JOURNAL Page 1
Post
Date Description Ref. Debit Credit
Apr. 1 Cash 101 30,000.00
George Smyth, Capital 311 30,000.00
2 Rent Expense 521 2,100.00

Cash 101 2,100.00
8 Equipment 181 12,000.00

Cash 101 3,000.00
Accounts Payable 202 9,000.00
12 Cash 101 3,200.00

Accounts Receivable 122 1,200.00
Service Fees 401 4,400.00
19 Electricity Expense 533 225.00

Cash 101 225.00
25 Cash 101 900.00

Accounts Receivable 122 900.00
GENERAL LEDGER
Account Cash Account No. 101
Post Balance
Apr. 1 J1 30,000 30,000
2 J1 2,100 27,900
8 J1 3,000 24,900
12 J1 3,200 28,100
19 J1 225 27,875
25 J1 900 28,775
Account Accounts Receivable Account No. 122

Post Balance
Apr. 12 J1 1,200 1,200
25 J1 900 300
Account Equipment Account No. 181

Post Balance
Apr. 8 J1 12,000 12,000
Account
Account Accounts Payable
No. 202
Post Balance
Apr. 8 J1 9,000 9,000

Account George Smyth, Account No. 311
Capital
Post Balance
Apr. 1 J1 30,000 30,000
Account Service Fees Account No. 401

Post Balance
Apr. 12 J1 4,400 4,400
Account Rent Expense Account No. 521

Post Balance
Apr. 2 J1 2,100 2,100
POINTS: 1
BUSPROG: Analytic
KEYWORDS: Bloom's: Analyzing
NOTES: 20 min.
77. Transactions and journal entries are shown below. Read the transaction and determine if the correct journal entry
has been made. If a correction is necessary, prepare a correcting entry.
a. Emma Fox, the owner, invested $47,000 cash.
Equipment 47,000
Emma Fox, Capital 47,000
b. Fox paid wages of $2,600.
Wages Expense 2,600
Wages Payable 2,600
c. Fox paid the monthly utility bill, $375.
Supplies 375
Cash 375
d. Fox made a payment on account for supplies purchased last month, $200.
Cash 200
e. Services were provided to a client on account, $700.
Service Fees 700
ANSWER:
a. Cash 47,000
Equipment 47,000
b. Wages Payable 2,600
Cash 2,600
c. Utilities Expense 375

Supplies 375
d. No correcting entry required as above
entry is correct
e. Accounts Receivable 700

POINTS: 1
BUSPROG: Analytic
NOTES: 5 min.
78. Transactions and journal entries are shown below. Read the transaction and determine if the correct journal entry
has been made. If a correction is necessary, use the ruling method to make the correction.
a. Bert Hollis, the owner, invested $45,000 in the business.
Cash 45,000
Bert Hollis, Drawing 45,000
b. Hollis paid the monthly rent of $1,275.
Cash 1,275
Rent Expense 1,275
c. Hollis paid cash to Union Electric for monthly utilities, $250.
Utilities Expense 250
d. Hollis made payment on account for office supplies purchased previously, $100.

Office Supplies 100
e. A customer made a payment on account, $1,100.
Accounts Receivable 1,100
Service Fees 1,100
ANSWER: Note: Text in parentheses is to be deleted. Changes appear italicized. Students should
initial each correction.
a. Cash 45,000
Bert Hollis, (Drawing) Capital 45,000
b. (Cash) Rent Expense 1,275

(Rent Expense) Cash 1,275
c. Utilities Expense 250

(Accounts Payable) Cash 250
d. (Office Supplies) Accounts Payable 100

(Accounts Payable) Cash 100
e. (Accounts Receivable) Cash 1,100

(Service Fees) Accounts Receivable 1,100
POINTS: 1
BUSPROG: Analytic
NOTES: 5 min.
79. Prepare a corrected trial balance by changing incorrect amounts and placing each amount in the proper column.
Wesley's Towing Service
Trial Balance
September 30, 20--
Cash 13,000
Accounts Receivable 970
Supplies 200
Prepaid Insurance 2,300
Equipment 10,000
Wesley, Capital 20,500
Wesley, Drawing 320
Repair Fees 9,000
Wages Expense 6,500
Rent Expense 1,400
Advertising Expense 450
35,320 35,320
a. Be sure all accounts have been listed with the appropriate debit or credit balance and check
column totals.
b. The debits to the Cash account are $37,421, and the credits are $34,381.
c. A $500 payment to a creditor was entered in the journal, but was not posted to the
Accounts Payable account. Cash was properly posted.
d. The Advertising Expense total has a transposition error of $90.
e. Accounts Receivable contains a slide error.
ANSWER:
Wesley's Towing Service
Trial Balance
September 30, 20--
Cash (b) 3,040
Accounts Receivable (e) 9,700
Supplies 200
Prepaid Insurance 2,300
Equipment 10,000
Accounts Payable (c) 5,000
Wesley, Capital 20,500
Wesley, Drawing (a) 320
Repair Fees 9,000
Wages Expense 6,500
Rent Expense 1,400
Advertising Expense (d) 540
34,500 34,500
POINTS: 1
BUSPROG: Analytic
NOTES: 15 min.
80. Almost any document that provides information about a business transaction can be called a(n)
____________________.
ANSWER: source document
POINTS: 1
DIFFICULTY: Easy
TOPICS: ACBSP: APC-02-GAAP
NOTES: 1 min.
81. When two digits in a debit or credit amount are reversed, a(n) ____________________ has occurred.
ANSWER: transposition error
POINTS: 1
DIFFICULTY: Easy
TOPICS: ACBSP: APC-02-GAAP
NOTES: 1 min.
82. When an incorrect entry has been journalized and posted to a wrong account or for the wrong amount, a(n)
____________________ is required.
ANSWER: correcting entry
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
83. Copying the debits and credits from the journal to the ledger accounts is a process called ____________________.
ANSWER: posting
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
84. A list of all accounts (account titles) used by a business is called a(n) ____________________.
ANSWER: chart of accounts
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
85. The act of entering transactions in the journal is known as ____________________.

ANSWER: journalizing
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
86. The ____________________ is used when a single line is drawn through the incorrect account title or amount
and the correct information is written directly above the line.
ANSWER: ruling method
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
87. The journal is commonly referred to as a(n) ____________________, because it is here that the first formal
accounting record of a transaction is made.
ANSWER: book of original entry
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
88. Journal entries requiring more than one debit and/or one credit are called ____________________.
ANSWER: compound entries
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.

89. The information in the Posting Reference columns of the journal and the ledger that provides a link between the
journal and the ledger is known as a(n) ____________________.
ANSWER: cross-reference
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
90. The Item column in a general ledger is used to provide ____________________ for special entries.
ANSWER: descriptions
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
91. If the difference between the debits and credits of a trial balance is divisible by nine, you may have committed a(n)
____________________ or a(n) ____________________ error.
ANSWER: slide, transposition
transposition, slide
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
92. A(n) ____________________ occurs when debit or credit amounts move a digit or two to the left or right when
entered.
ANSWER: slide error
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
93. A(n) ____________________ can be prepared daily, weekly, monthly, or whenever desired to prove the equality
of the debits and credits in the ledger accounts.
ANSWER: trial balance
POINTS: 1
DIFFICULTY: Easy
NOTES: 1 min.
Match the terms with the definitions.

a. book of original entry
b. chart of accounts
c. compound entry
d. correcting entry
e. cross-reference
f. four-column account
g. general ledger
h. journal
i. journalizing
j. posting
k. ruling method
l. slide error
m. source document
n. transposition error
o. trial balance
DIFFICULTY: Easy
NOTES: 1 min.
94. Occurs when debit or credit amounts move a digit or two to the left or right when entered.
ANSWER: l
POINTS: 1

95. A list of all accounts (account titles) used by a business.
ANSWER: b
POINTS: 1
96. Entering the transactions in a journal.

ANSWER: i
POINTS: 1
97. A day-by-day listing of the transactions of a business.

ANSWER: h
POINTS: 1
98. An entry requiring more than one debit and/or one credit.
ANSWER: c
POINTS: 1
99. Contains columns for the debit or credit transactions and columns for the debit or credit
running balance. In addition, there are columns for the date, description of the item, and
posting reference.
ANSWER: 6
POINTS: 1
100. Almost any document that provides information about a business transaction.
ANSWER: m
POINTS: 1
101. A complete set of all the accounts used by a business.

ANSWER: g
POINTS: 1
102. Another name for a journal because it is here that the first formal accounting record of a
transaction is made.
ANSWER: a
POINTS: 1
103. The process of copying the debits and credits from the journal to the ledger accounts.
ANSWER: j
POINTS: 1
104. The link provided by the information in the Posting Reference columns of the journal and ledger.
ANSWER: e
POINTS: 1
105. Drawing a single line through the incorrect account title or amount and writing the correct
information directly above the line.
ANSWER: k
POINTS: 1

106. Occurs when two digits are reversed.
ANSWER: n
POINTS: 1
107. Used to prove the equality of the debits and credits in the ledger accounts.
ANSWER: o
POINTS: 1
108. An entry to change an incorrect entry that has been journalized and posted to the wrong account.
ANSWER: d
POINTS: 1

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College Accounting Chapters 1 27 22nd Edition Heintz Test Bank 1

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Chapter 4—Journalizing and Posting Transactions

COLLEGE ACCOUNTING CHAPTERS 1 27

Test bank: https://testbankpack.com/p/test-bank-for-college-accounting-

Solution Manual: https://testbankpack.com/p/solution-manual-for-college-accounting-

2. An account in the chart of accounts is assigned a number at random.

4. Source documents provide objective, verifiable evidence of business transactions.

8. The chart of accounts includes the account titles in numerical order.

11. Entering transactions in a journal is called posting.

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30. Each entry in the journal affects two or more accounts.

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38. All transactions must be posted before preparing a trial balance.

39. An erasure may suggest that you are hiding something.

41. A chart of accounts does NOT include

42. Purchase invoices received from suppliers provide information about

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45. The month in the journal is recorded

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48. For EVERY transaction, the accountant enters the

50. Journalizing does NOT include

53. The accounts in the chart of accounts are arranged in

55. Purchase invoices received from suppliers provide information about

56. The simplest form of journal is one with

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58. Sales revenue received in cash is entered by

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63. Instead of T accounts, businesses are more likely to use a

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65. Corrections in accounts should be made by

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68. If cash is paid for worker salaries, the transaction includes

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1. Ledger account number of account credited

ANSWER: Jan. 3 Rent Expense 1,600

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Account Accounts Receivable Account No. 122

Account Equipment Account No. 181

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Account Accounts Payable Account No. 202

Account George Smyth, Capital Account No. 311

Account Service Fees Account No. 401

Account Rent Expense Account No. 521

Account Electricity Expense Account No. 533

2 Rent Expense 521 2,100.00

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8 Equipment 181 12,000.00

12 Cash 101 3,200.00

19 Electricity Expense 533 225.00

25 Cash 101 900.00

Account Accounts Receivable Account No. 122

Account Equipment Account No. 181

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Account Service Fees Account No. 401

Account Rent Expense Account No. 521

c. Utilities Expense 375

e. Accounts Receivable 700

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