Transactions and the accounting cycle

Review questions

Module 1 synthesis

Begin with evidence and the event, not the bank movement alone. Identify the resource or obligation, choose the accounts and balance the entry. A credit sale separates revenue from later collection, while inventory sold also needs a cost entry. Post the journal to the ledger and prepare a trial balance. Equal totals cannot detect an omitted two-sided entry or a balanced misclassification. Trace invoice, remittance and posting references before changing a customer balance.

Review questions

Test your understanding with these questions. Marking and saved results are available with a free account.

  1. Question 1An owner transfers 7,000 from a personal account to a new business account. Which entry describes the event?
  2. Question 2A business sells goods on credit for 1,200 and collects 450 against that same invoice. What receivable remains?
  3. Question 3The journal correctly debits cash 900 and credits receivables 900, but the ledger posts only 90 to the customer's credit. What trial-balance difference results if all else is correct?