Unit Test 4

The first step in the accounting cycle is to?

• Record transactions in a journal

• Analyse transactions from source documents

• Post journal entries to general ledger accounts

• Adjust the general ledger accounts

The last step in the accounting cycle is to?

• a. Prepare a post-closing trial balance

• a. Journalize and post-closing entries

• a. Prepare Financial statements

• a. Journalize and post adjusting entries

1. What is the correct order of the following events in the accounting process?

I. Financial statements are prepared

II. Adjusting entries are recorded

III. Nominal accounts are closed

• a. I, II, III

• b. II, I, III

• c. III, II, I

• II, III, I

Which of the following is not among the first five steps in the accounting cycle?

• Record transactions in journals

• Record closing entries

• Adjust the general ledger accounts

• Post entries to the general ledger accounts

Which of the following steps in the accounting cycle are listed in logical order?

• a. Post the journal entries to the ledger accounts, prepare a worksheet, and then take a trial balance.

• b. Journalize the closing entries, post the closing entries, and then prepare the post-closing trial balance.

• c. Prepare the earnings statement, prepare the statement of financial position and then prepare a worksheet.

• d. Post the closing entries, take a post-closing trial balance, and then journalize the closing entries

It is multi column sheet of paper that an accountant uses in compiling and summarizing the information necessary for the preparation of the financial statements.

• a. Journal

• b. Ledger

• c. Worksheet

• d. Financial Statements

The accounting process can be classified into two parts

• a. Recording phase and summarizing phase

• b. Identifying and recording phase

• c. Recording and classifying phase

• d. Classifying and summarizing phase

It is a tool of an accountant to the preparation of financial statements.

• a. Worksheet

• b. Journal

• c. Ledger

• d. Official Receipt

Which of the following statement is not true about worksheets?

• a. Providing a place where adjusting entries can be made informally before they are journalized and posted.

• b. Providing an orderly means whereby each account can be classified according to the financial statements in which it will appear.

• c. Providing a balancing mechanism that helps to uncover accounting errors.

• d. It is a formal financial statement.

In preparing a worksheet and the company is profitable in the current period, the total of the balance sheet credit column will be

• a. Larger than the balance sheet debit column

• b. Smaller than the balance sheet debit column

• c. Larger than the income statement debit column

• d. Larger than the income statement credit column