Topic 2c - the accoutning cycle

Question 1

first

Answer 1

source documents

Question 2

after source document (2)

Answer 2

general journals

Question 3

after general journals (3)

Answer 3

general ledger

Question 4

after general ledger (4)

Answer 4

BDA adjusting entries

Question 5

after BDA adjusting entries (5)

Answer 5

closing entries

Question 6

after closing entries (6)

Answer 6

trial balance

Question 7

after trial balance (7)

Answer 7

income statement

Question 8

last

Answer 8

balance sheet

Question 9

source document definition

Answer 9

original reported of transactions that can be recorded in the accounts, evidence transaction occurred.
eg, receipt, invoice, cheque

Question 10

general journal definition

Answer 10

where all company transactions or journal entries are recorded.

eg, date| description |debit | credit
21/02| accounts payable | 500. |
cash at bank. | | 500

Question 11

General ledger defintion

Answer 11

Accounting record that contains all individual business accounts showing the details of all the transactions that have taken place in the accounting period. (T account)
eg,
CAB
__________________________________________________________
1/2 motor vehicle 50,000 | 3/2 acc payable 25,345
4/3 inventory 7,999. |

                                    Motor Vehicle \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 1/2 cash at bank 50,000    |

Question 12

Adjusting entries definition

Answer 12

journal entries recorded at the end of an accounting period to alter the ending balances in various general ledger accounts
- prepaid expenses
- accrued income
- income received in advance
- accrued expenses
- depreciation

Question 13

closing entries defintion

Answer 13

closing totals of income and expenses which are then sent to the profit and loss account (income statement) after the adjusting entries have been performed

Question 14

trial balance definition

Answer 14

list of ledger accounting names with their final credit and debit balances. assets, liabilities and equity accounts are balanced at the end of the accounting period income and expense accounts are closed.
eg,
Account Debit Credit
CAB 200
Acc Receivable 150
Acc Payable 50

Totals

Question 14

income statement definition

Answer 14

records profit and loss of a business over given period of time. profit or loss is recorded in equity of balance sheet. profits increase equity, losses decrease equity.
eg,
Sales X
Sales returns (X)
Discount Allowed (X)

Question 15

balance sheet defintion

Answer 15

shows how many assets and liabilities your business has and how much money you would have if had no debts.
current assets……..
total ca…………………x
non current assets
total nca……………….x
total assets……………A
current liabilities……
total cl……………………x
non current liabilities
total ncl………………….x
total liabilities………..L
net assets…………… A-L = N
equity…………………….
+ capital……………. a
+ profit……………… b
- drawings…………. c
total equity…………. a+b-c = N