Accounting Process

Question 1

What is the first step in the accounting process?

Answer 1

IDENTIFICATION: Recognising financial transactions and events that are relevant to the business

Question 2

What does RECORDING in the accounting process entail?

Answer 2

Entering the transactions in the books of accounts ( journals or subsidiary books )

Question 3

What is meant by CLASSIFICATION OF TRANSACTIONS?

Answer 3

Sorting transactions ( recorded data )on the basis of nature and posting them into categories ( legders ) for clarity and organization

Question 4

What is SUMMARISATION in accounting?

Answer 4

Preparation of trial balance and financial statements to summarise data

Question 5

What does ANALYSIS AND INTERPRETATION assess?

Answer 5

Understanding what the financial data means -
Assessing profitability, liquidity, performance, etc.
And make some meaningful conclusions

Question 6

What is the final step in the accounting process?

Answer 6

COMMUNICATING INFORMATION TO USERS: Providing the analysed information to owners, investors, management, government, creditors through reports

Question 7

Fill in the blank: The accounting process begins with _______.

Answer 7

IDENTIFICATION.

Question 8

True or False: Recording transactions involves entering them into the books of accounts.

Answer 8

True.

Question 9

What is the purpose of the trial balance in the accounting process?

Answer 9

To summarise the financial transactions and prepare financial statements.