accounting cycle

Question 1

transactions recorded in journal

Answer 1

put into accounting record

Question 1

transaction occurs

Answer 1

they person pays, sales, purchases, loans, investments

Question 2

journal entries posted to ledger accounts

Answer 2

primary accounting record, used by entity which contains all accounts

Question 3

trail balance

Answer 3

states all account balances, debit or credit, so the accounting equation stays in equilibrium

Question 4

worksheets prepared

Answer 4

5

Question 5

formal financial statements prepared

Answer 5

balance sheet or income statement

Question 6

ledger accounts adjusted and closed

Answer 6

Adjusting is about updating accounts to reflect the true financial picture for the period.
Closing is about resetting temporary accounts so the next accounting period can start fresh.

Question 7

post closing trial balance prepared

Answer 7

the post-closing trial balance shows that the accounting records are ready for the next period by confirming all temporary accounts are closed and permanent accounts are balanced.