In the context of preparing journal entries, what does applying the double accounting underline format to selected cells in a spreadsheet typically indicate?

• A. A subtotal that requires further calculation
• B. A reference to a supporting document
• C. An error in the journal entry that needs correction
• D. The final total of debits and credits, confirming that they are equal

Answer: (D)

Verified step by step guidance

1. Understand the purpose of the double accounting underline format: In financial accounting, the double underline is used to emphasize the final total in a calculation, often indicating that no further calculations are needed for that specific column or row.
2. Recognize its application in journal entries: When preparing journal entries, the double underline is applied to the final total of debits and credits to confirm that they are equal, ensuring the accounting equation is balanced.
3. Review the concept of debits and credits: Debits and credits are fundamental to double-entry accounting. Debits represent increases in assets or expenses, while credits represent increases in liabilities, equity, or revenue. The total debits must equal the total credits in every journal entry.
4. Understand the importance of balancing: Balancing debits and credits ensures the integrity of the financial records and prevents errors in the accounting process. The double underline visually confirms this balance.
5. Apply the double underline format appropriately: When preparing journal entries in a spreadsheet, apply the double underline to the final totals of the debit and credit columns after verifying that they are equal, signaling the completion of the entry.