Chapter 02 The Recording Process 20 Minute Quiz Name Student ld True/False TRUE

Question

Chapter 02 The Recording Process 20 Minute Quiz Name Student ld True/False TRUE FALSE Assets are increased by debits and liabilities are decreased by credits. The owner's capital account is increased by credits An account will have a credit balance if the total debit amounts exceed the total credit amounts. The ledger is the entire group of accounts maintained by a company The basic steps in the recording process are (1) to analyze each transaction, (2) to enter the transaction in a journal, and (3) to transfer the journal entry to the appropriate ledger accounts. Transferring journal entries to the ledger accounts is called posting and should be per-formed in chronological order. Assets = liabilities+ owner's capital-drawings + revenues-expenses is a correct form of the expanded basic accounting equation. In posting, one should enter "12" in the Post. Ref. Column on page two of the journal. When the columns of the trial balance equal each other, it proves no errors occurred in recording and posting. The double-entry system helps ensure the accuracy of the recorded amounts and helps to detect errors 10.

Explanation / Answer

1. Assets are increased by debits, and liabilities are decreased by credits False 2. The owners capital account is increased by credits True 3. An account will have a credit balance if the total debit amounts exceed the total credit amounts False 4. The ledger is the entire group of accounts maintained by a company True 5. The basic steps in the recording process...... True 6. Transferring journal entries to the ledger accounts ...... True 7. Assets = Liabilities + Owners' Capital - Drawings + Revenues - Expenses.... True 8 In posting one should enter J2 in the Post Ref. Column on page 2 of the journal False 9. When the columns of the trial balance equal each other........ False 10 The double entry system helps ensure the accuracy of the recorded amounts..... True

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