Chapter 4 Accounting

Accounting Number

the number assigned to the account

Correcting Entry

a journal entry made to correct an error in a previous journal entry

File Maintenance

the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current

Ledger

a group of accounts

General Ledger

a ledger that contains all accounts needed to prepare financial statements

Opening an Account

writing an account title and number on the heading of an account

Posting

transferring information from a journal entry to a ledger account

Because an account form has columns for the debit and credit balance of an account, it is often referred to as the balance-ruled account form

True

The asset division accounts for TechKnow Consulting are numbered in the 100s

True

The cash account is the first asset account and is numbered 100

False

The second division of TechKnow Consulting’s chart of accounts is the owner’s equity division

False

The first digit of account numbers for accounts in the owner’s equity ledger division is 3

True

The last two digits in a 3-digit account number indicate the general ledger division of the account

False

When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515

True

TechKnow Consulting arranges expense accounts in chronological order in its general ledger

False

The two steps for opening an account are writing the account title and recording the balance

False

Separate amounts in special amount columns are posted individually

False

Separate amounts in general amount columns are not posted individually

False

The only reason for the Post. Ref. columns of the journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted

False

A check mark in parentheses below a General Debit column total indicates that the total is not posted

True

The totals of special amount columns in a journal are not posted

False

With the exception of the totals lines, the Post. Ref. column is completely filled in with either an account number or a check mark

True