W7.3

Question 1

Foundation accounting tool used to record all the business financial transaction in chronological order

Answer 1

General journal

Question 2

Transactions are recorded by date ensuring a sequential history of financial activities

Answer 2

Chronological record

Question 3

Each entry includes debits and credits which must balance to maintain the accounting equation

Answer 3

Double entry system

Question 4

Central accounting records that compiles all financial transaction of a business categorized by accounts

Answer 4

General ledger

Question 5

Five main account categories of a ledger

Answer 5

Assets, liabilities, equity, income, expenses

Question 6

Tracks debit and credit transactions for each account ensuring the books are balanced through a trial balance

Answer 6

Function

Question 7

Transactions are first recorded in journal and then posted to the ledger where they are categorized by account type

Answer 7

Data source

Question 8

Each entry includes the date, description, amount, and account affected

Answer 8

Details

Question 9

Used to generate financial statements like the income statement, balance sheet, and cash flow statement

Answer 9

Financial reporting

Question 10

Helps identify discrepancies, unusual transactions, and fraud by providing a comprehensive view of all accounts

Answer 10

Error detection

Question 11

Enables businesses to track financial performance over the time and make informed decisions

Answer 11

Business analysis

Question 12

Simplify stocks preparation for maintaining accurate records of revenues and expenses

Answer 12

Tax compliance