SERVICE BUSINESS

Question 1

is an analytical device used to facilitate the gathering of data for adjustments, the preparation of financial statements, and closing entries.

Answer 1

The Worksheet

Question 2

You will gather information from the source documents and determine the effect of the transactions on the accounts. Once you have finished analyzing the source documents, you can now record it in the journals.

Answer 2

Identifying and analyzing & Journalizing

Question 3

Information gathered from the journal is transferred to the general ledger.

Answer 3

Posting to the Ledger

Question 4

It is a report that lists the balances of all the individual
t-accounts of the general ledger at a specific point in time.

Answer 4

Unadjusted Trial Balance

Question 5

The accounts in the unadjusted trial balance are updated as of the reporting date on an accrual basis by recording accruals, expiration of deferrals, estimations, and other events often not signaled by new source documents.

Answer 5

Adjusting Entries

Question 6

The equality of debits and credits are rechecked after adjustments are made. The adjusted trial balance serves as the basis for the preparation of the financial statements.

Answer 6

Adjusted Trial Balance

Question 7

These are means by which the information processed is communicated to users.

Answer 7

Financial Statements (S.F.P. or Balance Sheet & S.P.L. or Income Statement)

Question 8

This involves journalizing and posting closing entries and ruling the ledger. Temporary accounts (or nominal accounts) are closed and the resulting profit or loss is transferred to an equity account.

Answer 8

Closing Entries

Question 9

The equality of debits and credits are again rechecked after the closing process.

Answer 9

Post Closing Trial Balance

Question 10

These are usually made at the beginning of the next accounting period to simplify the recording of certain transactions in that period.

Answer 10

Reversing Entries