Bookkeeping
Basics Part 4
Lecture Notes
Study Material
2026 Updated
Accounting Exam
Review Guide
Fundamentals
, A listing of the account numbers and titles but without account balances is the:
A) Ledger
B) Journal
C) Chart of accounts
D) Trial balance
Ans: C
Rationale: The chart of accounts is a structured listing of all accounts used by an
organization, organized by account type and number for classification and consistency. It
does not contain balances; instead, it serves as the foundation for recording transactions in
the accounting system. The ledger contains balances, the journal records transactions
chronologically, and the trial balance summarizes debit and credit balances for equality
checking.
Prior to approving a vendor’s invoice for payment, the invoice, receiving ticket, and
__________ order should be compared:
A) Sales
B) Purchase
C) Cash
D) Return
Ans: B
Rationale: A purchase order is issued to authorize a purchase, the receiving ticket confirms
goods were received, and the invoice is the seller’s billing document. Matching all three
ensures accuracy, prevents fraud, and confirms that the organization only pays for goods
actually ordered and received. This process is part of internal controls.
The report that sorts a company’s accounts receivable into current, 1–30 days past due, 31–
60 days past due, etc. is referred to as the:
A) Trial balance
B) Aging of accounts receivable
C) Income statement
D) Ledger report
Ans: B
Rationale: The aging of accounts receivable categorizes outstanding customer balances
based on how long they have been unpaid. This helps management evaluate credit risk,
estimate uncollectible accounts, and improve cash flow management. Other reports do not
organize receivables by time outstanding.
The amount of insurance premiums that have not yet expired is reported as an:
A) Expense
B) Liability
C) Asset
D) Revenue
Basics Part 4
Lecture Notes
Study Material
2026 Updated
Accounting Exam
Review Guide
Fundamentals
, A listing of the account numbers and titles but without account balances is the:
A) Ledger
B) Journal
C) Chart of accounts
D) Trial balance
Ans: C
Rationale: The chart of accounts is a structured listing of all accounts used by an
organization, organized by account type and number for classification and consistency. It
does not contain balances; instead, it serves as the foundation for recording transactions in
the accounting system. The ledger contains balances, the journal records transactions
chronologically, and the trial balance summarizes debit and credit balances for equality
checking.
Prior to approving a vendor’s invoice for payment, the invoice, receiving ticket, and
__________ order should be compared:
A) Sales
B) Purchase
C) Cash
D) Return
Ans: B
Rationale: A purchase order is issued to authorize a purchase, the receiving ticket confirms
goods were received, and the invoice is the seller’s billing document. Matching all three
ensures accuracy, prevents fraud, and confirms that the organization only pays for goods
actually ordered and received. This process is part of internal controls.
The report that sorts a company’s accounts receivable into current, 1–30 days past due, 31–
60 days past due, etc. is referred to as the:
A) Trial balance
B) Aging of accounts receivable
C) Income statement
D) Ledger report
Ans: B
Rationale: The aging of accounts receivable categorizes outstanding customer balances
based on how long they have been unpaid. This helps management evaluate credit risk,
estimate uncollectible accounts, and improve cash flow management. Other reports do not
organize receivables by time outstanding.
The amount of insurance premiums that have not yet expired is reported as an:
A) Expense
B) Liability
C) Asset
D) Revenue
