Bookkeeping Cycle Test

Question 1

An account entry on the left side is referred to as.

Accepted Answer

Debit

Answer

In the double-entry bookkeeping system, accounts are typically represented using a T-account format. The left side of any T-account is conventionally designated for recording debits. This fundamental rule applies universally across all account types, increasing assets and expenses while decreasing liabilities, equity, and revenue.

Question 2

The goal of posting to a ledger is to apply deposits and charges to the correct account.

Accepted Answer

True

Answer

Posting is the crucial step in the accounting cycle where individual journal entries are transferred to their respective ledger accounts. The primary goal is to systematically categorize and accumulate all financial transactions, such as deposits and charges, into the correct accounts. This process ensures that each account reflects its accurate balance, which is essential for preparing reliable financial statements.

Question 3

The task of recording, classifying, and summarizing financial transactions and events is known as accounting.

Accepted Answer

Bookkeeping

Answer

Bookkeeping is the foundational process within accounting that involves the systematic recording, classifying, and summarizing of financial transactions and events. It is the mechanical aspect of accounting, ensuring that all financial data is accurately captured. Accounting, in its broader sense, encompasses bookkeeping but also includes the interpretation, analysis, and reporting of this financial information.

Question 4

An account entry on the right side is referred to as.

Accepted Answer

Credit

Answer

In the double-entry bookkeeping system, the right side of any T-account is always designated for recording credits. This is a fundamental convention that helps maintain the accounting equation. Credits increase liability, equity, and revenue accounts, while they decrease asset and expense accounts.

Question 5

After a business transaction, journal entries are made in the

Accepted Answer

General Journal

Answer

After a business transaction occurs, the very first place it is recorded is in the General Journal. This is known as the book of original entry, where transactions are documented chronologically. Each journal entry details the accounts affected, the debit and credit amounts, and a brief explanation, before being transferred to the ledger.

CPB / BookKeeping Practice Test

CPB / BookKeeping Practice Test

Bookkeeping Cycle Test