CPB General Ledger & Chart of Accounts

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

A chart of accounts is an organized listing of all accounts used in the general ledger, providing a framework for recording financial transactions.

Question 2

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

Accepted Answer

Liabilities

Answer

Liabilities normally carry credit balances because they represent amounts owed by the business, and credits increase liability accounts.

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

The general ledger is the master accounting record containing all account balances, with entries posted from journals and used to prepare financial statements.

Question 4

Which type of account is increased by a debit entry?

Accepted Answer

Asset accounts

Answer

Asset accounts have a normal debit balance, so debit entries increase their balances and credit entries decrease them.

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 subsidiary ledger provides transaction-level detail for individual accounts (such as each customer or vendor) that roll up to a controlling account in the general ledger.

CPB - Certified Public Bookkeeper Practice Test

CPB - Certified Public Bookkeeper Practice Test

CPB General Ledger & Chart of Accounts