Accounting Process

Question 1

Steps in Accounting Process

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Answer 1

1. Analyze
2. Journal
3. Posting
4. Unadjusted TB
5. Adjusting Entries
6. Financial Statements
7. Closing Entries
8. Post-closing Entries
9. Reversing Entries

Question 2

Optional Steps in the Accounting Process

Answer 2

4. Unadjusted TB
8. Post-closing Entries
9. Reversing Entries

Also, preparation of worksheet

Question 3

Are all sales and purchases recorded in the Sales Journal and Purchase Journal?

Answer 3

NO (on account only)

Question 4

Are all cash receipt and cash disbursement recorded in the Cash Receipts Journal and Cash Disbursement Journal

Answer 4

YES (any source and any purpose)

Question 5

Is this revealed by a Trial Balance?
* Transplacement and Transposition Error

Answer 5

YES

Question 6

Is this revealed by a Trial Balance?
* Journalized / Posted half of the entry

Answer 6

YES

Question 7

Is this revealed by a Trial Balance?
* recording one part of the entry which is different from another part

Answer 7

YES

Question 8

Is this revealed by a Trial Balance?
* omitting an entire journal entry

Answer 8

NO

Question 8

Is this revealed by a Trial Balance?
* journalizing / posting an entire entry twice

Answer 8

NO

Question 8

Is this revealed by a Trial Balance?
* classification error

Answer 8

NO

Question 9

Do Adjusting Entries involve balance sheet accounts only?

Answer 9

NO (1 IS account, 1 BS account)

Question 10

What are the ONLY adjusting entries which require reversal?

Answer 10

• accruals
• unearned income (income method)
• prepaid expense (expense method)