CPB General Ledger & Chart of Accounts 1

Question 1

What is the primary purpose of a chart of accounts?

Accepted Answer

To provide a systematic listing of all accounts used in the general ledger

Answer

To list all transactions in chronological order

Answer

To summarize the financial position of a business

Answer

To record the balances of all vendor invoices

Question 2

In double-entry bookkeeping, which account type normally carries a credit balance?

Accepted Answer

Liabilities

Answer

Assets

Answer

Expenses

Answer

Dividends

Question 3

What is the general ledger in a bookkeeping system?

Accepted Answer

The master set of accounts that contains all financial transactions of a business

Answer

A daily log of all cash receipts

Answer

A record of all vendor and customer balances

Answer

A list of outstanding checks and deposits

Question 4

Which type of account is increased by a debit entry?

Accepted Answer

Asset accounts

Answer

Revenue accounts

Answer

Liability accounts

Answer

Equity accounts

Question 5

What is a subsidiary ledger?

Accepted Answer

A detailed ledger that supports and breaks down the balance of a controlling account in the general ledger

Answer

A backup copy of the general ledger kept offsite

Answer

A ledger used only for payroll transactions

Answer

A temporary ledger closed at the end of each month

Question 6

Which of the following is considered a permanent (real) account?

Accepted Answer

Accumulated Depreciation

Answer

Sales Revenue

Answer

Wages Expense

Answer

Dividends Declared

Question 7

What is the normal balance for accounts payable in the general ledger?

Accepted Answer

Credit

Answer

Debit

Answer

Zero

Answer

Either debit or credit depending on the period