Question

Question 1

1. A chart of accounts is used in organizations to

   		process transactions to the ledger.
   		ensure consistency in recording transactions quicker, since a chart of accounts is essentially shorthand of accounts.
   		verify correct amounts before being transferred to the trial balance.
   		alphabetize accounts so that when accountants prepare financial statements the accounts can be quickly transferred.
   		encrypt the general journal so that no other organization can read any other organization's journal.

1 points

Question 2

1. The entry to close revenue accounts involves

   		a debit to Income Summary and credits to all the revenue accounts.
   		debits to all the expense accounts and credits to all the revenue accounts.
   		a debit to Income Summary and a credit to Retained Earnings.
   		a debit to Retained Earnings and a credit to Income Summary.
   		debits to all the revenue accounts and a credit to Income Summary.

1 points

Question 3

1. Caldwell Industries purchased $2,000 of merchandise inventory, paying cash for 10% of the purchase, with the remainder on account. The entry would include a

   		debit to Merchandise Inventory for $2,000, credit to Cash for $200, and credit to Accounts Payable for $1,800.
   		debit to Cash for $200, debit to Accounts Payable for $1,800, and credit to Merchandise Inventory for $2,000.
   		debit to Merchandise Inventory for $2,000, credit to Cash for $200, and credit to Notes Payable for $1,800.
   		debit to Merchandise Inventory for $200, and credit to Cash for $200.
   		debit to Cash for $800, debit to Notes Payable for $1,800, and credit to Merchandise Inventory for $2,000.

1 points

Question 4

1. Posting is the process of transferring information from the

   		journal to the ledger.
   		ledger to the income statement and balance sheet.
   		journal to the balance sheet.
   		income statement to the balance sheet.
   		ledger to the journal.

Answer 1

1.

Answer: 4^th option

This is the list of accounts in alphabetical way that is required for transferring amounts there. This is needed to make journal entry, ledger accounts, trial balance, and financial statements. Accounting software is prepared based on this chart.

2.

Answer: 5^th option

Revenue account should be debited and Income Summary account should be credited.

Revenue is debited, because its nor mal balance is credit.

3.

Answer: 1^st option

M. Inventory is debit of $2,000, since this is an incoming of asset.

Cash of ($2,000 × 10% =) $200 is credit, since this is an outgoing of asset.

Accounts payable (2,000 – 200 =) $1,800 is credit, since the non-payment part is creating liability.

4.

Answer: 1^st option

This means transferring data from journal to ledger; such as a cash payment journal is recorded in cash account.

Journal is the primary book of entry and ledger is the secondary book of entry, since these are correlated.