Chapter 8 - Trial Balance, FinancialReports And Statements

Question 1

A listing of general ledger account with their corresponding debit and credit balances

Answer 1

Trial balance

Question 2

The preparation of a trial balance shall serve the following purposes

Answer 2

1. To prove the mathematical of quality of debits and credits’s after posting
2. To uncover errors in journalizing and posting
3. To serve as the basis for the preparation of the financial statements

Question 3

It is a columnar sheet of paper on which accountants have summarize information needed to make the adjusting and closing entries and to prepare the financial statements

Answer 3

Worksheet

Question 4

Following columns contained in a worksheet

Answer 4

1. Account title and code column
2. Unadjusted trial balance column
3. Adjustment columns
4. Adjusted/pre-closing trial balance column
5. Closing entries column
6. Statement of income and expense column
7. Post-closing trial balance columns
8. Balance sheet columns

Question 5

Adjustments are two main types, namely

Answer 5

Accrued items

Deferred items

Question 6

Accrued items require two types of adjusting entries, such as:

Answer 6

Asset/revenue adjustments

liability/expense adjustments

Question 7

Deferred items required two types of adjustments:

Answer 7

Asset/expense adjustments

liability/revenue Adjustments

Question 8

For government as a whole responsibility for the preparation of the consolidated financial statement rest jointly with the ___________, such as; _________ and ________ , and the _____________

Answer 8

Head of central finance agency; controller; accountant; finance minister or equivalent

Question 9

The responsibility for the fair presentation and reliability of the financial statement rest with ________ of the reporting agency

Answer 9

Management

Question 10

Five principles and concepts of FS

Answer 10

Consistency 
going  concern 
matching of cost and revenues
modified accrual basis
responsibility accounting

Question 11

Qualitative characteristics of financial statements

Answer 11

Comparability
relevance
reliability
understandability

Question 12

Qualitative characteristics relevance includes the following

Answer 12

Materiality

timeliness

Question 13

Eight steps in the accounting cycle

Answer 13

1 analyzing the transaction
2 journalizing the transaction
3 posting the journal entries
4 preparation of the trial balance
5 adjusting the accounts
6 closing the accounts
7 preparation of the financial statements
8 reversing the accounts

Question 14

qualitative characteristics relevance includes the following

Answer 14

Completeness 
faithful and fair representation 
substance over form 
Prudence 
compliance neutrality