General Ledger & Chart of Accounts Flashcards
7 cards from real CPB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 General Ledger & Chart of Accounts flashcards as text
What is the purpose of preparing a trial balance?
Answer: To verify that total debits equal total credits in the general ledger
A trial balance verifies the mathematical accuracy of the ledger by confirming that the sum of all debit balances equals the sum of all credit balances.
What is a contra account in the general ledger?
Answer: An account paired with another account to reduce its net balance
A contra account has a normal balance opposite to its paired account and is used to reduce the net value reported, such as Accumulated Depreciation reducing the book value of assets.
When should closing entries be recorded in the general ledger?
Answer: At the end of each accounting period to zero out temporary accounts
Closing entries are made at the end of each accounting period to transfer balances from temporary accounts (revenues, expenses, dividends) to retained earnings.
Which of the following accounts would be classified as an asset in the chart of accounts?
Answer: Prepaid Insurance
Prepaid Insurance is a current asset because it represents a future economic benefit (insurance coverage) already paid for.
What does 'posting' mean in the context of general ledger bookkeeping?
Answer: Transferring transaction data from journals to the appropriate general ledger accounts
Posting is the process of transferring debit and credit amounts from journal entries to the respective T-accounts in the general ledger.
Which general ledger account classification represents money owed TO the business by its customers?
Answer: Accounts Receivable
Accounts Receivable is an asset account representing amounts customers owe to the business for goods or services already delivered.
In a standard chart of accounts, which numerical range is typically assigned to liability accounts?
Answer: 2000–2999
A standard chart of accounts commonly assigns the 2000-series to liabilities, with assets in the 1000s, equity in the 3000s, revenues in the 4000s, and expenses in the 5000s.