One Stanford application question.

In stanford's application, there is a question:

Have you ever received a failing grade in any college or university course?

What is a failing grade? Does it mean the failing grade showing on the transcript? How about if failed on first exam, but passed the same course on the second exam. Should it still be considered as having a failing grade? (though it does not show on the transcript)

I think so, most schools require you to list all courses you attended, even if you dropped it....

But if it does not appear on the transcript, i do not know.... Is there any record kept in your school....?