CPB General Ledger & Chart of Accounts 2

Question 1

What is the purpose of preparing a trial balance?

Accepted Answer

To verify that total debits equal total credits in the general ledger

Answer

To calculate net income for the period

Answer

To list all outstanding customer invoices

Answer

To reconcile the bank statement with cash records

Question 2

What is a contra account in the general ledger?

Accepted Answer

An account paired with another account to reduce its net balance

Answer

An account used to record international transactions

Answer

An account that records corrections to prior-period entries

Answer

An account used exclusively during the closing process

Question 3

When should closing entries be recorded in the general ledger?

Accepted Answer

At the end of each accounting period to zero out temporary accounts

Answer

At the beginning of each month

Answer

Whenever a new vendor is added

Answer

Only when a business changes its fiscal year

Question 4

Which of the following accounts would be classified as an asset in the chart of accounts?

Accepted Answer

Prepaid Insurance

Answer

Unearned Revenue

Answer

Notes Payable

Answer

Common Stock

Question 5

What does 'posting' mean in the context of general ledger bookkeeping?

Accepted Answer

Transferring transaction data from journals to the appropriate general ledger accounts

Answer

Mailing financial statements to stakeholders

Answer

Reconciling subsidiary ledgers to the general ledger

Answer

Entering transactions directly into the trial balance

Question 6

Which general ledger account classification represents money owed TO the business by its customers?

Accepted Answer

Accounts Receivable

Answer

Accounts Payable

Answer

Notes Payable

Answer

Deferred Revenue

Question 7

In a standard chart of accounts, which numerical range is typically assigned to liability accounts?

Accepted Answer

2000–2999

Answer

1000–1999

Answer

3000–3999

Answer

4000–4999