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Financial Accounting & Reporting > Accounting Process > Flashcards

Accounting Process Flashcards

1
Q

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

A

Accounting Cycle

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2
Q

Steps in Accounting Cycle

A
  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
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3
Q

These pertain to the original source materials evidencing a transaction.

A

Business Source Documents

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4
Q

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.

A

Books of original entry

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5
Q

These are the ledgers - general ledger and subsidiary ledger

A

Books of final entry

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6
Q

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

A

Journalizing

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7
Q

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

A

Double Entry System

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8
Q

Under this system, each transaction is recorded through simple narrative

A

Single Entry System

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9
Q

Approach in computing net income: Double Entry System

A

Transactional Approach

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10
Q

Approach in computing net income: Single Entry System

A

Capital Maintenance Approach

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11
Q

Accounts used for bookkeeping: Double Entry System

A

Complete Accounts (ALEIE)

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12
Q

Accounts used for bookkeeping: Single Entry System

A

Limited Accounts (Cash, AR,AP, Equity)

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13
Q

Books of Accounts used: Double Entry System

A

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

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14
Q

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

A

General Journal

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15
Q

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

A

Special Journals

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16
Q

Journal: Only Sales of merchandise on credit are recorded

A

Sales Journal

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17
Q

Journal: Receipts of cash from any source are recorded.

A

Cash Receipts Journal

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18
Q

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

A

Purchase Journal

19
Q

Journal: All payments of cash for any purpose are recorded

A

Cash Disbursement Journal

20
Q

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

A

Posting

21
Q

A systematic compilation of a group of accounts

A

Ledger

22
Q

Contains all the accounts appearing in the trail balance

A

General Ledger

23
Q

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

A

Subsidiary Ledger

24
Q

The basic storage of information in accounting .

A

Account

25
Q

Left Side of the T-Account Format

A

Debit

26
Q

Right side of the T-Account Format

A

Credit

27
Q

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

A

Chart of Accounts

28
Q

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

A

Real accounts

29
Q

Represents revenues and expenses. Also known as temporary accounts.

A

Nominal Accounts

30
Q

represent those with real and nominal element

A

Mixed Accounts

31
Q

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

A

Contra Accounts

32
Q

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

A

Adjunct Accounts

33
Q

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

A

Trial Balance

34
Q

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

A

Unadjusted Trial Balance

35
Q

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

A

Adjusted Trial Balance

36
Q

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

A

Post-Closing Trial Balance

37
Q

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.

A

Adjusting Entries

38
Q

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

A

Expense Method

39
Q

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

A

Asset Method

40
Q

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

A

Income Method

41
Q

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

A

Liability Method

42
Q

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

A

Worksheet

43
Q

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.

A

Closing Entries

44
Q

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.

A

Reversing Entries

Financial Accounting & Reporting (6 decks)

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