Bookkeeping Cycle Flashcards
7 cards from real CPB / BookKeeping practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bookkeeping Cycle flashcards as text
Which of the following errors would cause the trial balance to be out of balance?
Answer: Posting a debit of $500 to an account as $50
Posting a wrong amount to only one side of the entry creates an imbalance between total debits and credits.
What distinguishes a general journal from a special journal?
Answer: A general journal records all transaction types; special journals record only specific recurring transactions
Special journals (sales, purchases, cash receipts, cash payments) handle high-volume routine transactions; the general journal handles all others.
The matching principle in bookkeeping requires that:
Answer: Expenses be recognized in the same period as the revenues they helped generate
The matching principle ensures expenses are recorded in the period the related revenue is earned, supporting accurate income measurement.
If a $200 cash payment for utilities is mistakenly debited to Supplies, the correcting entry would:
Answer: Debit Utilities Expense $200 and credit Supplies $200
To correct the error, debit the correct account (Utilities Expense) and credit the incorrectly debited account (Supplies) for $200.
How does the bookkeeping cycle differ under a cash basis versus accrual basis?
Answer: Cash basis records transactions only when cash changes hands; accrual records when earned or incurred
Under cash basis, revenues and expenses are recorded only when cash is received or paid, while accrual basis follows the matching and revenue recognition principles.
Which statement about the normal balance of an account is correct?
Answer: Asset and expense accounts have normal debit balances
Assets and expenses are increased by debits, so their normal (expected) balance is a debit balance.
At year-end, a company has earned $2,000 of interest on a note receivable that will not be collected until next year. The adjusting entry is:
Answer: Debit Interest Receivable $2,000; Credit Interest Revenue $2,000
Interest earned but not yet received is an accrued revenue, recorded by debiting Interest Receivable and crediting Interest Revenue.