CPB / BookKeeping Bookkeeping Journal 3

Question 1

What does it mean to 'post' a journal entry?

Accepted Answer

Transfer journal entry amounts to the general ledger accounts

Answer

Posting is the process of transferring the debit and credit amounts from the journal to the corresponding general ledger accounts.

Question 2

A reversing entry is typically made on:

Accepted Answer

The first day of the new accounting period

Answer

Reversing entries are made on the first day of the new period to automatically cancel accrual adjustments made at period-end.

Question 3

If a $500 credit sale is incorrectly recorded as a $5,000 credit sale, what correcting entry is needed?

Accepted Answer

Debit Sales Revenue $4,500; Credit Accounts Receivable $4,500

Answer

To correct an overstatement, debit (reduce) Sales Revenue and credit (reduce) Accounts Receivable by the difference of $4,500.

Question 4

Which special journal is used to record all sales of merchandise on credit?

Accepted Answer

Sales Journal

Answer

The sales journal is a special journal dedicated to recording all credit sales of merchandise to customers.

Question 5

A prepaid insurance payment of $1,200 for 12 months is recorded. After one month, the adjusting entry would be:

Accepted Answer

Debit Insurance Expense $100; Credit Prepaid Insurance $100

Answer

Each month, $100 of prepaid insurance expires and becomes an expense ($1,200 ÷ 12), reducing the prepaid asset and recognizing the expense.

CPB / BookKeeping Practice Test