CPB / BookKeeping Bookkeeping Ledger 5

Question 1

Which scenario correctly describes a 'compound journal entry' affecting the ledger?

Accepted Answer

Multiple debits and/or credits where total debits equal total credits

Answer

A compound journal entry involves more than two accounts (multiple debits and/or credits), but total debits must still equal total credits before posting to the ledger.

Question 2

A bookkeeper notices the trial balance is off by $270. This error is most likely due to:

Accepted Answer

Transposition of digits (e.g., writing $720 instead of $270)

Answer

A difference divisible by 9 (270 ÷ 9 = 30) is a classic indicator of a transposition error where two digits were accidentally switched.

Question 3

In a ledger, the term 'cross-referencing' between the journal and ledger serves what purpose?

Accepted Answer

To allow tracing entries between the journal and ledger for verification

Answer

Cross-referencing (writing journal page numbers in ledger and account numbers in journals) creates an audit trail allowing entries to be traced in both directions.

Question 4

When preparing a trial balance, which of the following accounts would appear on the credit side?

Accepted Answer

Notes Payable

Answer

Notes Payable is a liability account with a normal credit balance, so it appears on the credit side of the trial balance.

Question 5

What is the effect on the ledger when a business collects cash on account from a customer?

Accepted Answer

Debit Cash; Credit Accounts Receivable

Answer

Collecting cash on account increases Cash (debit) and decreases the amount owed by the customer in Accounts Receivable (credit).

CPB / BookKeeping Practice Test

CPB / BookKeeping Practice Test

CPB / BookKeeping Bookkeeping Ledger 5