Bookkeeping 07

Question 1

1. What are the steps of the ACCOUNTING CYCLE?

Answer 1

1. Transaction
2. Journalizing
3. Posting
4. Trial Balance
5. Worksheet
6. Financial Statements
7. Adjusting Journal Entries
8. Closing

Question 2

2. The ACCOUNTING CYCLE starts when a transaction occurs. Every time a transaction is made, it must be recorded, and it brings about a change in:

Answer 2

ONE OR MORE ACCOUNTS: ASSETS, LIABILITIES, CAPITAL, REVENUE, or EXPENSES.

Question 3

3. These transactions must be recorded in a process called:

Answer 3

JOURNALIZING

Question 4

4. At the end of an accounting period, and after all transactions have been journalized, you:

Answer 4

do a TRIAL BALANCE to verify the accounts for accuracy.

Question 5

5. AT LEAST ONCE A YEAR, you summarize these changes in accounts by:

Answer 5

preparing a WORKSHEET so you can summarize these changes in BALANCE SHEETS and OPERATING STATEMENTS.

Question 6

6. What about changes that ARE NOT supported by documents?

Answer 6

You MAKE ADJUSTMENTS and enter for changes that are not supported by documents.

Question 7

7. What is the last step, after the ADJUSTING JOURNAL ENTRIES have been made?

Answer 7

you CLOSE THE BOOKS in preparation for the beginning of the next cycle.

Question 8

8. The DAILY DIARY in which each transaction is recorded (or entered) is called:

Answer 8

THE GENERAL JOURNAL, or simply the JOURNAL

Question 9

9. What is another name for the JOURNAL?

Answer 9

The BOOK OF ORIGINAL ENTRY, because it is the starting place for all bookkeeping.