Accounting
Cycle
Ethics
Transactions
Source
Documents
Financial
Statements
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QUESTION:
•What’s the second step of the accounting cycle?
ANSWER:
•To Analyze the Transaction
QUESTION:
•When you are analyzing a transaction, at least how many
accounts are affected?
ANSWER:
•Two
QUESTION:
•When posting an entry to which are you posting, the general
journal or the general ledger?
ANSWER:
•General Ledger
QUESTION:
•Where does the information from adjusting accounts come
from?
ANSWER:
•The Worksheet
QUESTION:
•Which steps of the accounting cycle are done throughout
the month? Which are done to close a month?
ANSWER:
•During the month: Steps 1-4
•To Close: Steps: 5-10
QUESTION:
•What is the study of right and wrong, and how people choose to
do what is right or wrong?
ANSWER:
•Ethics
QUESTION:
•What ethic are you using when you create trueand correct
financial statements?
ANSWER:
•Integrity
QUESTION:
•What principle of ethics are you using when you don’t allow
your personal interests to influence your choices and work?
ANSWER:
•Objectivity
QUESTION:
•What does ethics mean in terms of a business as a whole?
ANSWER:
•It is a code of conduct that the business encourages all its
employees to follow.
QUESTION:
•List the five different principles of ethics.
ANSWER:
•Integrity, Objectivity, Independence, Competence,
Confidentiality
QUESTION:
•Received cash from sales $500.00
ANSWER:
•Debit Cash $500 and credit Sales $500
QUESTION:
•Paid cash to owner for personal use $2800.00
ANSWER:
•Debit Drawing $2800 and Credit Cash $2800
QUESTION:
•Received cash on account from Covey Company $200.00
ANSWER:
•Debit Cash $200 and Credit Accounts Receivable- Covey
Company $200
QUESTION:
•Sold services on account to Tony’s Limos $582.00
ANSWER:
•Debit Accounts Receivable- Tony’s Limos $582 and Credit
Sales $582
QUESTION:
•Paid cash for telephone bill $70.00
ANSWER:
•Debit Utilities Expense $70 and Credit Cash $70
QUESTION:
•What source document is used for all sales on account?
ANSWER:
•Sales Invoice
QUESTION:
•What source document is used when you order a bank to
pay cash from a bank account?
ANSWER:
•Check
QUESTION:
•What source document is used to calculate the total cash
sales at the end of a day?
ANSWER:
•Calculator Taper
QUESTION:
•When are memorandums used?
ANSWER:
•When there is no other type of source document.
QUESTION:
•Why are source documents essential to analyzing
transactions?
ANSWER:
•The source document proves that the transaction occurred.
QUESTION:
•What are the sections of the balance sheet?
ANSWER:
•Header, assets, liabilities, owner’s equity.
QUESTION:
•What are the sections of the income statement?
ANSWER:
•Header, revenue, expenses, net income/loss, component
percentages.
QUESTION:
•What is on the top of all financial statements, and what are
the three parts of it?
ANSWER:
•Header; it’s made up of the company name, the name of the
report, and the date.
QUESTION:
•What are the steps when recording a journal entry in the
general journal?
ANSWER:
•1. Write the date.
•2. Write the name of the account debited.
•3. Record the amount debited.
•4. Write the name of the account credited.
•5. Record the amount credited.
•6. Record the source document in the Document Number
column.
QUESTION:
•What are the steps when posting to the general ledger?
ANSWER:
•1. Write the date.
•2. Write the journal page number in the post reference
column.
•3. Write the amount debited or credited.
•4. Write the new account balance in the appropriate
column.
•5. Return to the journal and record the account number in
the post reference column.
List all 10 steps of the accounting cycle.
1. Collect and verify source documents.
2. Analyze transaction.
3. Journalize in the general journal.
4. Post to the general ledger.
5. Prepare trial balance.
6. Prepare worksheet.
7. Prepare financial statement.
8. Journalize and post adjustment entries.
9. Journalize and post closing entries.
10.Prepare a post closing trial balance.