Accounting Process

Question 1

represents the steps or procedures used in recording transactions and preparing financial statements.

Answer 1

Accounting Cycle

Question 2

Steps in Accounting Cycle

Answer 2

1. Analyzing the business documents or transactions
2. Journalizing
3. Posting
4. Preparing the unadjusted trial balance
5. preparing the adjusting entries
6. Preparing the financial statements
7. Preparing the closing entries
8. Preparing a post-closing trial balance
9. Preparing the reversing entries

Question 3

These pertain to the original source materials evidencing a transaction.

Answer 3

Business Source Documents

Question 4

These pertains to the journals. Aside from the general journal, large entities maintain special journals such as sales journal, purchase journal, cash receipts journal and cash disbursement journal.

Answer 4

Books of original entry

Question 5

These are the ledgers - general ledger and subsidiary ledger

Answer 5

Books of final entry

Question 6

The process of recording transactions in the journal through journal entries.

Answer 6

Journalizing

Question 7

under this system, each transaction is recorded in two parts - Debit and Credit. This system uses the concepts of duality and equilibrium

Answer 7

Double Entry System

Question 8

Under this system, each transaction is recorded through simple narrative

Answer 8

Single Entry System

Question 9

Approach in computing net income: Double Entry System

Answer 9

Transactional Approach

Question 10

Approach in computing net income: Single Entry System

Answer 10

Capital Maintenance Approach

Question 11

Accounts used for bookkeeping: Double Entry System

Answer 11

Complete Accounts (ALEIE)

Question 12

Accounts used for bookkeeping: Single Entry System

Answer 12

Limited Accounts (Cash, AR,AP, Equity)

Question 13

Books of Accounts used: Double Entry System

Answer 13

Journals, Special Journals, Ledger, Subsidiary Ledgers and other important books

Question 14

A journal used to record transactions not recorded in the special journals

Answer 14

General Journal

Question 15

Journals used to record transactions of similar nature to facilitate efficient recording of large number of similar transactions

Answer 15

Special Journals

Question 16

Journal: Only Sales of merchandise on credit are recorded

Answer 16

Sales Journal

Question 17

Journal: Receipts of cash from any source are recorded.

Answer 17

Cash Receipts Journal

Question 18

Journal: As a rule, purchases of merchandise on credit are recorded

Answer 18

Purchase Journal

Question 19

Journal: All payments of cash for any purpose are recorded

Answer 19

Cash Disbursement Journal

Question 20

It is the process of transferring data from the journal to appropriate accounts in the ledger.

Answer 20

Posting

Question 21

A systematic compilation of a group of accounts

Answer 21

Ledger

Question 22

Contains all the accounts appearing in the trail balance

Answer 22

General Ledger

Question 23

This is the device used in storing the details of certain general ledger accounts.

Answer 23

Subsidiary Ledger

Question 24

The basic storage of information in accounting .

Answer 24

Account

Question 25

Left Side of the T-Account Format

Answer 25

Debit

Question 26

Right side of the T-Account Format

Answer 26

Credit

Question 27

listing of all the entity's general ledger accounts in a systematic form.

Answer 27

Chart of Accounts

Question 28

Represents assets, liabilities and equity. Also known as Permanent accounts.

Answer 28

Real accounts

Question 29

Represents revenues and expenses. Also known as temporary accounts.

Answer 29

Nominal Accounts

Question 30

represent those with real and nominal element

Answer 30

Mixed Accounts

Question 31

Accounts that are deducted from a related account such as accumulated depreciation and allowance for doubtful accounts.

Answer 31

Contra Accounts

Question 32

Accounts that are added to a related account such as premium on bonds payable

Answer 32

Adjunct Accounts

Question 33

List of general ledger accounts with their respective debit or credit balance.

Answer 33

Trial Balance

Question 34

This is prepared before adjusting entries. It contains Real, Nominal and Mixed Accounts.

Answer 34

Unadjusted Trial Balance

Question 35

This is prepared after adjusting entries. It contains Real and Nominal Accounts

Answer 35

Adjusted Trial Balance

Question 36

This is prepared after the closing process. It contains Real accounts only

Answer 36

Post-Closing Trial Balance

Question 37

Made at the end of every accounting period in order to split mixed accounts up to date. Allocate revenue and expenses between current and future periods.

Answer 37

Adjusting Entries

Question 38

The original payment is debited to an expense account. Entry: the unused portion is recognized as asset while the expired portion remains as expense

Answer 38

Expense Method

Question 39

The original payment is debited to an asset account. Entry: The incurred portion is recognized as expense while the unused portion remains as asset

Answer 39

Asset Method

Question 40

An income account is credited for the receipt of the income expense. Entry: The unearned portion is recognized as liability while the earned portion remains as income

Answer 40

Income Method

Question 41

A liability account is credit for the receipt of the income. Entry: The earned portion is recognized as income while the unearned portion remains as liability

Answer 41

Liability Method

Question 42

Multicolumn sheet of paper that an accountant uses in compiling and summarizing the information necessary for the preparation of the financial statement

Answer 42

Worksheet

Question 43

Made at the end of an accounting period after adjusting entries and financial statements have been prepared for the purpose of closing at nominal or temporary accounts.

Answer 43

Closing Entries

Question 44

Made at the beginning of the new accounting period in order to transfer all accrued and prepaid items established by adjusting entries to the nominal accounts that are to be used in recording transactions during the new period.

Answer 44

Reversing Entries