Accounting Cycle Flashcards
(14 cards)
What is a trial balance?
A trial balance is a statement that summarizes the balances of all ledger accounts at a specific point in time.
What does a cash receipts journal record?
A cash receipts journal records all cash received by the business.
What does a cash payment journal record?
A cash payment journal records all cash paid out by the business.
What is the purpose of closing transfers?
Closing transfers summarize the general ledger and ensure that accounting is correct.
What is a balance sheet?
A balance sheet shows the financial position of a business.
What are adjusting entries?
Adjusting entries are made at the end of an accounting period to zero out all temporary accounts and transfer their balances to permanent accounts.
What is an accounting transaction?
Any business activity that results in a direct effect on the bank.
Examples include cash and credit sales, purchasing, and trading stock.
What are the types of accounting transactions?
Transactions can be divided into the following: cash transactions, credit transactions, internal transactions, and external transactions.
What are source documents?
The paper trail generated each time a business makes a financial transaction.
Accountants call these ‘source documents’.
What are examples of source documents for cash?
Cash register roll, cash register tape, cash slip, and shop order (5/0).
What is recorded in the Cash Receipts Journal (CRJ)?
Sales and any cash received other than sales.
What is a bank statement?
A record of the amount received each time.
What happens at the end of business days regarding cash register rolls?
The duplicate cash register rolls are removed, and the total sales are calculated.
What are CRR/CRT records?
They record any direct deposits made by the business or by customers.
