Bookkeeping Ledger Flashcards

What is a 'chart of accounts' in relation to the ledger?

Answer: A numbered list of all accounts used in the general ledger

The chart of accounts is a numbered listing of all accounts used in a company's general ledger, serving as an index to the ledger.

Which ledger account type normally carries a credit balance?

Answer: Unearned Revenue

Unearned Revenue is a liability account and normally carries a credit balance, representing money received before services are performed.

What happens to permanent ledger accounts at the end of an accounting period?

Answer: They carry their balances forward to the next period

Permanent (real) accounts — assets, liabilities, and equity — retain their ending balances, which become the opening balances of the next period.

A company posts a debit to Supplies Expense and a credit to Supplies. What type of entry is this?

Answer: Adjusting entry

Debiting Supplies Expense and crediting Supplies is a standard adjusting entry made at period-end to record supplies used during the period.

In ledger accounts, what does the abbreviation 'Bal.' typically indicate?

Answer: The balance carried forward

'Bal.' in a ledger account indicates the balance carried forward, showing the net amount in the account at a specific point in time.

Which of the following would cause a discrepancy between the general ledger and a subsidiary ledger?

Answer: Posting a transaction to the control account but not the subsidiary ledger

A discrepancy occurs when a transaction is posted to the general ledger control account but the corresponding detail is not posted to the subsidiary ledger.

What is the normal balance of the Owner's Drawing account?

Answer: Debit

Owner's Drawing is a contra-equity account that normally carries a debit balance, as withdrawals reduce owner's equity.