CPB / BookKeeping Bookkeeping Cycle 5

Question 1

Which of the following errors would cause the trial balance to be out of balance?

Accepted Answer

Posting a debit of $500 to an account as $50

Answer

Posting a wrong amount to only one side of the entry creates an imbalance between total debits and credits.

Question 2

What distinguishes a general journal from a special journal?

Accepted Answer

A general journal records all transaction types; special journals record only specific recurring transactions

Answer

Special journals (sales, purchases, cash receipts, cash payments) handle high-volume routine transactions; the general journal handles all others.

Question 3

The matching principle in bookkeeping requires that:

Accepted Answer

Expenses be recognized in the same period as the revenues they helped generate

Answer

The matching principle ensures expenses are recorded in the period the related revenue is earned, supporting accurate income measurement.

Question 4

If a $200 cash payment for utilities is mistakenly debited to Supplies, the correcting entry would:

Accepted Answer

Debit Utilities Expense $200 and credit Supplies $200

Answer

To correct the error, debit the correct account (Utilities Expense) and credit the incorrectly debited account (Supplies) for $200.

Question 5

How does the bookkeeping cycle differ under a cash basis versus accrual basis?

Accepted Answer

Cash basis records transactions only when cash changes hands; accrual records when earned or incurred

Answer

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.

CPB / BookKeeping Practice Test

CPB / BookKeeping Practice Test

CPB / BookKeeping Bookkeeping Cycle 5