8 EMS - The Accounting Cycle

The first step in The Accounting Cycle (buying and selling) is called...

(a)  

The evidence generated by Step 1 in The Accounting Cycle is called...

• Source document

• Evidence document

• Proof document

The books of first entry in The Accounting Cycle are called...

• Cash receipts journal - money received

• Cash payments journal - money paid out

• Both answers are correct.

The General Ledger is a summary of all the business accounts and happens after the subsidiary journals.

• True

• False

The Trial Balance is a summary of the General Ledger

• True

• False

Financial Statements are divided into: Income Statement and Balance Sheet

• True

• False

Income Statements are used to calculate Profit or Loss in a business.

• True

• False

Balance Sheets create a specific picture of the business and are a list of assets, liabilities and...

• expenses

• income

• owner's equity

• liquidity

The accounting term for 12 months

(a)  

The effect on the bank account when goods or services are sold.

• Bank increases

• Bank decreases

• Bank stays the same