Quiz Review 1 Flashcards
An accounting period is based on __________
a period of time
Definition of a calendar year?
January 1 - December 31
Definition of accounting
The process of keeping financial accounts
Process that takes bookkeeping information and prepares financial statements
When journalizing a transaction, what is recorded first?
A debit (then credit)
The accounting cycle takes place in a period of time called the __________
Accounting Period
What separates each transaction recorded in the journal?
A blank line
Definition of posting?
The transfer of information from the journal to the ledger
In the ledger, how are we able to determine the balance of an account?
Taking the sum of all deposits and subtracting all withdrawals
What numbers are the Assets?
100-199
What numbers are the liabilities?
200-299
What numbers are the owner’s equity?
300-399
What numbers are the revenue?
400-499
What numbers are the expenses?
500-599
In assets _________ increases
___________ decreases
Debit increases
Credit decreases
In liabilities _______ increases
_________ decreases
Credit increases
Debit decreases
In capital _________ increases
________ decreases
Credit increases
Debit decreases
In withdrawals _______ increases
_________ decreases
Debit increases
Credit decreases
In revenues _________ increases
__________ decreases
Credit increases
Debit decreases
In expenses _________ increases
__________ decreases
Debit increases
Credit decreases
What does the trial balance consist of?
All the accounts with their balances in the same order as they appear in the chart of accounts
Including Assets, liabilities, equity, revenue, expenses, gains, and losses
In the trial balance, should debits and credits be equal?
Yes
How do you make a correction before posting?
Cross the wrong one out, write the correct response above, and initialize it
How do you make a correction after posting?
Cross the wrong one out, write the correct response above, and initialize it ???
What is the first step in the accounting cycle?
Collect source documents from business transactions as they occur
What is the second step in the accounting cycle?
Analyze and record business transactions in a journal
What is the third step in the accounting cycle?
Post or transfer information from journal to ledger
What is the fourth step in the accounting cycle?
Prepare a trial balance
What is the fifth step in the accounting cycle?
Prepare a worksheet
What is the sixth step in the accounting cycle?
Prepare financial statements
What is the seventh step in the accounting cycle?
Journalize and post adjusting entries
What is the eighth step in the accounting cycle?
Journalize and post closing entries
What is the ninth step in the accounting cycle?
Prepare a post-closing trial balance
What are the categories of the worksheet?
Account titles
Trial Balance
Adjustments
Adjusted Trial Balance
Income Statement
Balance Sheet
Are adjustments from the worksheet journalized in the same journal as Step 2?
Yes
Are financial statements prepared from the worksheet?
Yes
What accounts are listed on the balance sheet?
Asset, Contra Assets, Liabilities, Capital, Withdrawals
What accounts are listed on the Income Statement
Revenue and Expenses
What is the straight-line method of depreciation
Cost of equipment - Residual value
_____________________________________
Estimated years of usefulness
What accounts are listed on the Formal Income Statement
Revenues and expenses
When accumulated depreciation is __________ from equipment, the balance of the equipment is then ____________
subtracted
Reduced
What happens to the balance when withdrawals are made from the Owner’s Equity account?
Debit decreases the balance
What kind of accounts are listed in the Post Closing Trial?
Cash
Prepaid Rent
Inventory
Accounts payable
*Permanent account balances
What is the accounting equation?
A = liabilities+ ending capital
