CPB / BookKeeping Journalizing and Posting Transactions 2

Question 1

When a business purchases supplies on account, which journal entry is correct?

Accepted Answer

Debit Supplies, Credit Accounts Payable

Answer

Purchasing supplies on account increases the Supplies asset (debit) and creates a liability in Accounts Payable (credit).

Question 2

A compound journal entry is one that:

Accepted Answer

Involves more than two accounts

Answer

A compound journal entry involves three or more accounts, though total debits must still equal total credits.

Question 3

After posting from the general journal, the account number is written in the journal's posting reference column to indicate:

Accepted Answer

That the entry has been posted to the ledger

Answer

Recording the ledger account number in the journal's PR column confirms the entry has been successfully posted.

Question 4

A business receives a $500 cash payment from a customer on a previously recorded account receivable. Which entry is correct?

Accepted Answer

Debit Cash $500, Credit Accounts Receivable $500

Answer

Collecting on an account receivable increases Cash (debit) and reduces the Accounts Receivable asset (credit).

Question 5

In which book of original entry are most routine business transactions first recorded?

Accepted Answer

The general journal

Answer

The general journal is the book of original entry where transactions are first recorded in chronological order.

CPB / BookKeeping Practice Test