Multiple Choice
Which of the following statements about debits and credits in journal entries is correct?
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2. Transaction Analysis
Journal Entries: Debits and Credits
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Which term refers to transactions that are set up for automated entry in computerized accounting systems?
A
Adjusting journal entries
B
Compound journal entries
C
Recurring journal entries
D
Reversing journal entries
Verified step by step guidance1
Understand the concept of recurring journal entries: These are transactions that occur regularly and are set up for automated entry in computerized accounting systems to save time and reduce errors.
Compare recurring journal entries with other types of journal entries: Adjusting journal entries are used to update accounts at the end of an accounting period, compound journal entries involve multiple debits and credits, and reversing journal entries are used to reverse certain entries made in the previous period.
Recognize the purpose of recurring journal entries: They are designed to handle repetitive transactions, such as monthly rent payments or subscription fees, without manual intervention.
Identify the key feature of recurring journal entries: They are pre-programmed in the accounting system to automatically post at specified intervals, ensuring consistency and efficiency.
Conclude that recurring journal entries are the correct term for transactions set up for automated entry in computerized accounting systems.
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