Question

4)         Journals are sometimes called books of original entry because transactions are recorded in journals before amounts are entered into the ledger.

            ⊚        true
            ⊚        false

5)         Posting is the process of determining the balance in an account by subtracting debits and credits.

            ⊚        true
            ⊚        false

6)         A trial balance can be in balance, even if there are errors in the accounting system.

            ⊚        true
            ⊚        false

7)         In a market, a company that manufactures cars would be referred to as a conversion agent.

            ⊚        true
            ⊚        false

Answer 1

4. True
Journal is the book of original entry because financial transanction are first recorded first into journal. Transactions recorded into journal is then transfered into individual ledger account.

5. False
Posting is the process of transferring financial transanctions from journal to ledger. Journal entry recorded in journal is then transferred to individual ledger accounts involved in journal entry.

6. True
A trial balance can tally even if there are errors in the accounting system.
Reasons:

• Error of Omission(complete omission), if a financial transaction is completely omitted to be recorded in journal then in such cases trial balance will be in balance.
• Compensating error, such errors compensate each other which do not affect the trial balance.

7. True
Conversion agent converts raw material into finished goods.that are required by consumers.