Quiz 1 questions Flashcards
A calendar year is based on the months of:
Jan 1 to Dec 31
The normal financial procedures that take place over a period of time are known as:
Accounting Cycle
True or False
When journalizing a transaction, the credit is recorded first.
False
The accounting cycle takes place in a period of time called the
Accounting Period
What separates each transaction recorded in the journal?
One line space
When we transfer the transaction from the journal to the ledger the activity is called_____.
Posting
In the ledger, how we are able to determine the balance of an account?
By adding the debits and credits and determining the difference between the two.
The list of the individual accounts with their balances taken from the ledger to the worksheet is referred to as
the ________________.
Trial Balance
True or False
In the Trial Balance, debits and credits do not have to be equal.
False
True or False
To make a correction before posting simply draw a line through the incorrect entry, write the correct information above the line and place your initials near the change.
True
True or False
To make a correction after posting, draw a line through the error and write the correct figure above it. Change the running balance to reflect the corrected posting.
True
A business transaction occurs and generates a document in what step of the accounting cycle?
Step 1
Analyzing and recording business transactions into a journal occurs in what step of the accounting cycle?
Step 2
In step four of the accounting cycle a(n) _________________ is prepared.
Trial Balance
Which of the following is not a part of the worksheet?
Statement of Owner’s Equity
True or False
Adjustments from the worksheet are journalized in the same journal as step 2.
True
True or False
Financial statements are not prepared from the worksheet.
False
Which of the following are not included on the balance sheet section of the worksheet?
Expenses
True or False
The Income Statement only includes assets and liabilities.
False
True or False
The balance sheet section totals on the worksheet do not match the formal balance sheet.
False
The correct formula for the straight-line method of depreciation consists of:
Cost of equipment – Residual value / Estimated years of depreciation
The Formal Income Statement lists the following two account categories:
Revenue and expenses
When accumulated depreciation is ___________ from equipment, the balance of the equipment is then __________.
Subtracted – decreased
Withdrawals from the Owner’s Equity account:
Reduce the balance
Journalizing and posting adjusting entries occurs in step _________.
Step 7
Step 8 in the accounting cycle consists of:
Journalizing and posting closing entries
Preparing a post-closing trial balance occurs in step ________.
9
The Post Closing Trial Balance lists only ___________ accounts in the ledger and their balances after adjusting and closing entries have been posted.
Permanent (real)
When the closing process is complete, the accounting equation will be reduced to:
A = L + Ending Capital
True or False:
An accounting period is based on the balance sheet.
False
