Lesson Three: Definitions

Question 1

Accounting Cycle:

Answer 1

The steps in preparing financial statements.

1. Analyze transactions
2. Journalize
3. Post
4. Prepare unadjusted trial balance
5. Adjust and post accounts
6. Prepare adjusted trial balance
7. Prepare financial statements
8. Close accounts
9. Prepare post-closing trial balance

Question 2

Accounting Period:

Answer 2

The regular intervals a company chooses to create and use financial statements.

Question 3

Annual Financial Statements:

Answer 3

Reports covering a one-year period for a company’s fiscal situation.

Question 4

Interim Financial Statements

Answer 4

These cover one, three, or six months of activity.