Bookkeeping Journal Flashcards

A company sells goods worth $800 and collects $300 cash while the rest is on account. The journal entry includes:

Answer: Debit Cash $300; Debit Accounts Receivable $500; Credit Sales Revenue $800

A partial cash, partial credit sale is a compound entry: cash received goes to Cash, the remainder to Accounts Receivable, and total to Sales Revenue.

Which principle requires that expenses be recorded in the same period as the revenues they helped generate?

Answer: Matching principle

The matching principle requires expenses to be recorded in the same accounting period as the revenues they helped produce.

An accrued expense journal entry at period-end typically includes:

Answer: A debit to an expense account and a credit to a payable account

Accrued expenses are costs incurred but not yet paid, recorded by debiting the expense and crediting the corresponding payable liability.

If rent of $1,500 is paid in advance for three months, what is the initial journal entry?

Answer: Debit Prepaid Rent $1,500; Credit Cash $1,500

Paying rent in advance creates an asset (Prepaid Rent) because the benefit has not yet been used, reducing cash.

Which of the following is NOT a component of a journal entry?

Answer: Account balance after posting

The account balance after posting belongs in the ledger, not the journal; journal entries contain the date, account names, and debit/credit amounts.

A $200 NSF (non-sufficient funds) check returned by the bank should be recorded as:

Answer: Debit Accounts Receivable $200; Credit Cash $200

An NSF check reverses the original deposit: cash is reduced (credit) and the customer's receivable is reinstated (debit).

What is the correct order of steps in the accounting cycle related to journals?

Answer: Identify transaction → Record in journal → Post to ledger → Prepare trial balance

The accounting cycle begins by identifying transactions, then recording them in the journal, posting to the ledger, and preparing a trial balance to verify accuracy.