Accounting Cycle Flashcards
(20 cards)
What is the first step of the accounting cycle?
Identifying and analyzing transactions.
True or False: The second step of the accounting cycle is to journalize transactions.
True.
Fill in the blank: The third step of the accounting cycle is to ________ the journal entries.
post.
What is the purpose of adjusting entries in the accounting cycle?
To ensure that revenues and expenses are recognized in the correct accounting period.
Which step follows the preparation of adjusted trial balance?
Preparing financial statements.
Multiple Choice: What is the seventh step of the accounting cycle? A) Closing entries B) Adjusted trial balance C) Journalizing
A) Closing entries.
True or False: The final step of the accounting cycle is the preparation of post-closing trial balance.
True.
What document is created to summarize all transactions of a business for a specific period?
Financial statements.
Fill in the blank: The ________ trial balance is prepared after adjusting entries are recorded.
adjusted.
What is the main purpose of closing entries?
To reset the balances of temporary accounts to zero for the next accounting period.
Multiple Choice: Which of the following is NOT a step in the accounting cycle? A) Posting B) Closing C) Marketing
C) Marketing.
What are the two types of accounts that are affected by closing entries?
Temporary accounts and permanent accounts.
True or False: The accounting cycle is a continuous process.
True.
What is the fourth step in the accounting cycle?
Preparing an adjusted trial balance.
Fill in the blank: The ________ entries are made at the end of an accounting period to update account balances.
adjusting.
What is the fifth step of the accounting cycle?
Preparing financial statements.
Multiple Choice: Which of the following is the first step of the accounting cycle? A) Financial statements B) Journal entries C) Analyze transactions
C) Analyze transactions.
What is the role of the trial balance in the accounting cycle?
To ensure that total debits equal total credits before financial statements are prepared.
Fill in the blank: After financial statements are prepared, the next step is to prepare ________ entries.
closing.
What is the last step of the accounting cycle?
Close the books
