I.

Knowledge:
A. Multiple Choice:
Choose the letter of the correct answer. Write your answer in the space provided
before each number.
_____ 1. To enter the amount on the right of a T-Account
a.
b.
c.
d.

To debit
To credit
Debit
Credit

_____ 2. Left side of the T-account

a.
b.
c.
d.

Debit
Credit
To debit
To credit

_____ 3. Gives the two-fold effects of a business transaction

a.
b.
c.
d.

Journalizing
Single-entry bookkeeping
Double-entry bookkeeping
None of the above

_____ 4. The process of recording the business transactions in a journal

a.
b.
c.
d.

Journalizing
Posting
Footing
None of the above

_____ 5. Adding process

a.
b.
c.
d.

Journalizing
Posting
Footing
None of the above

_____ 6. Horizontal adding

a.
b.
c.
d.

Footing
Cross footing
Posting
None of the above

_____ 7. Journal entry with two or more debits and credits

a.
b.
c.
d.

Single-entry
Simple entry
Compound entry
None of the above

_____ 8. Journal entry with one debit and one credit

a.
b.
c.
d.

Single-entry
Simple entry
Compound entry
None of the above

_____ 9. The right side of a T-account

a.
b.
c.
d.

Debit
Credit
To credit
To debit

_____ 10. Book of original entry

a.
b.
c.
d.

Journal
Ledger
Trial balance
None of the above

_____ 11. Book of final entry

a.
b.
c.
d.

Journal
Ledger
Trial balance
None of the above

_____ 12. Skeletal form of a ledger

a.
b.
c.
d.

Journal
T-account
Trial balance
None of the above

_____ 13. Profit and loss accounts

a.
b.
c.
d.

Real accounts
Nominal accounts
Mixed accounts
None of the above

_____ 14. Process of adding

a.
b.
c.
d.

Journalizing
Posting
Footing
None of the above

______ 15. List of accounts with open balances on the ledger

a.
b.
c.
d.

Journal
Ledger
Trial balance
None of the above

_____ 16. To enter an amount on the left side of the T-account

a.
b.
c.
d.

To debit
To credit
Debit
Credit

_____ 17. Records in the journal

a.
b.
c.
d.

Journalizing
Journal
Journal entry
None of the above

_____ 18. Process of transferring to the ledger the records from the journal.
a.
b.
c.
d.

Journalizing
Posting
Footing
None of the above

_____ 19. Simplest and most flexible type of journal

a.
b.
c.
d.

T-account
General journal
Special journal
None of the above

_____ 20. List of account title used by the business

a.
b.
c.
d.

T-account
Trial balance
Chart of accounts
None of the above

II. Process/Skills:
Endurance Enterprise has the following ledger balances at the end of February of
the current year. Prepare the Trial Balance of Balances in the sheet provided.
Cash

Accounts
Receivable

16,000

485

1,575

1,236

2,000

7,463

2,485

254

Prepaid
Insurance
798

600

3,254

325

26

Office
Equipment

1,485

258

568

236

2,871

46

2,412

145

Delivery Trucks
70,0
00

97
48

Building

Mortgage
Payable

25,00
0

254

50,0
00

685
Office Supplies

J. Cruz, Capital

600

16,000

800

40,000

Salaries/Wages
2,000

Service Income
1,400

1,500

J. Cruz,
Drawing
2,500

Supplies Used
1,854

2,000
500

Utilities

2,700

2,000

5,000

1,900

16,000

400

4,000

360

Land
20,000

14,000
Endurance Enterprise
Trial Balance of Balances
February, 2014
Accounts

Debits

Credits

III. Understanding:
1. Why is it necessary to prepare a trial balance?

2. How does the ledger differs from the journal?

3. Explain why you think erasures in financial records are not advisable?