What is an Accounting Journal?

An Accounting Journal is a record of financial transactions. It includes information such as the date of the transaction, who was involved, what was bought or sold, and how much money was involved. This information can be used to track the progress of a company's finances over time.

Why is it important to keep a journal?

Keeping a journal is important because it allows businesses to track their financial progress over time. This information can be used to decide where to allocate resources and improve the company's financial standing.

Can I use a computer to keep my Accounting Journal?

Yes, you can use a computer to keep your Accounting Journal. However, it is essential to ensure that you have a backup system in place in case of accidents or computer failures. You may also want to consider printing out a copy of your journal each month, so you have a physical record of your transactions.

What is the difference between an Accounting Journal and a General Ledger?

The main difference between an Accounting Journal and a General Ledger is that the journal is a chronological record of all financial transactions, while the ledger summarizes those transactions. In addition, the ledger includes information such as the date of the transaction, the amount of money involved, and the affected account. This information can be used to track a company's financial progress over time.

Should I keep my Accounting Journal for a long time?

It is generally a good idea to keep your Accounting Journal for at least seven years. This will allow you to track the company's financial progress over some time. However, you may want to keep it for longer if there are any significant changes in the company's finances.

General Journal MCQ Quiz With Answers

Take a quick Multiple Choice Questions (MCQs) test about General Journal. These MCQs can help you to prepare for your exams, interviews and different tests. Just click the "start quiz" button and start General Journal MCQs quiz.

If you find difficulty in answering these questions, read 'General Journal' chapter thoroughly from explanation section of the website.

1. The process of recording business transactions in chronological order is called:

Recording
Posting
Journalizing
Classifying

2. Another name for a journal is:

Book of original entry
Business book
Record book
Financial book

3. A journal entry that involves more than two accounts is called:

Double entry
Compound entry
Combined entry
Complex entry

4. A written explanation below each journal entry is known as:

Details
Entry
Narration
Additional data

5. The discount calculated on the list price of the goods is called:

Cash discount
Rebate
Discount
Trade discount

6. The day book is another name for:

Ledger
Cash book
Pass book
Journal

7. The correct journal entry for return of merchandise purchased from Mr. Smith on account is:

Cash > Debit; Purchases > Credit
John > Debit; Merchandise > Credit
A/C P.A - John > Debit; Purchases Return and Allowances > Credit
None of the above

8. The column of the journal used to record the page number of the ledger account is known as:

Referring column
Posting reference
Entry number
Ledger number

9. Stolen merchandise should be debited to:

Sales account
Purchases account
Loss by theft account
No entry

10. Loss of goods by fire should be debited to:

Loss account
Fire account
Loss of goods by fire account
None of the above

11. The owner of the business takes $100 cash and goods costing $200 for his family. The proper journal entry for this transaction is:

Drawings > Debit; Cash > Credit; Purchases > Credit
Drawings > Debit; Cash > Credit; Merchandise > Credit
Drawings > Debit; Cash > Credit; Sales > Credit
Cash > Debit; Purchases > Debit; Drawings > Credit

12. Which of the following best describes the trade discount:

It is different from cash discount
It is a reduction in list (or retail) price
It is not recorded in the books
All of the above

13. The term used for the discount offered by sellers to encourage prompt payments is known as:

Trade discount
Relationship discount
Payment discount
Cash discount

14. The cash discount given is debited because it is:

A revenue of the business
An expense of the business
A liability of the business
An asset of the business

15. The cash discount received is credited because it is:

A liability
An expense
An asset
An income

16. Mr. Smith invests $10,000 cash in his business. The account to be credited is:

Cash
Profit
Income
Capital

17. When a customer returns merchandise, the account to be debited is:

Capital
Revenue
Sales return and allowances
Purchase returns and allowances

18. The correct entry for the purchase of merchandise on account is:

Purchases > Debit; Cash > Credit
Purchases > Debit; Accounts Payable > Credit
Purchases > Debit; Liability > Credit
Accounts Payable > Debit; Purchases > Credit

19. To record a transaction in the general journal correctly, the accountant needs to:

Find the accounts involved in transaction
Ascertain the increase or decrease in accounts
Apply the rules of debit and credit
All of the above

20. The correct entry for the sale of merchandise on account is:

Accounts Receivable > Debit; Profit > Credit
Cash > Debit; Sales > Credit
Accounts Receivable > Debit; Asset > Credit
Accounts Receivable > Debit; Sales > Credit

You can also check:

General Journal short questions

General Journal fill in the blanks

General Journal MCQs

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

General Journal MCQs FAQs

True Tamplin, BSc, CEPF®

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Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

General Journal MCQs FAQs

What factors should be considered when making decisions in accounting?

What are some common accounting decisions?

How do accountants make decisions?

What are some common accounting decision-making models?

True Tamplin, BSc, CEPF®

Our Services

Connect With a Financial Advisor