An overview of the Accounting Cycle ACNTI 2.1.2

Which of the following most accurately states the purpose of the accounting cycle?

• To provide an accurate picture of a business's revenues, expenses, assets, liabilities, and equity accounts at the end of each accounting period

• To provide an accurate picture of just a business's revenues, assets, and equity at the end of each accounting period

• To provide an accurate picture of just a business's expenses and liabilities at the end of each accounting period

• To provide an accurate picture of a business's revenues, expenses, assets, liabilities, and equity accounts at any point during the accounting period

What is the last step in the accounting cycle?

• Prepare the final balance

• ​Prepare the post-closing trial balance

• ​Prepare the closing balance

• ​Prepare the post-closing audit.

What is an asset in accounting?

• Anything a company owns, minus liabilities

• Anything a company owns, except cash

• ​Anything a company owns, including cash

• Any net worth company owners own, including cash

Owners’ equity is the same thing as _____.

• ​gross loss

• ​net liabilities

• gross profit

• ​net assets

Which of the following is the best definition of a liability in accounting?

• A liability is anything your company owes to someone besides the business owner

• ​A liability is anything your company owes to the business owner

• ​A liability is a debt your business owes that must be repaid during the present accounting period

• ​A liability is anything your company needs to sell during the present accounting period

Which of the following should be included in any journal entry?

• ​Either a debit or a credit

• ​Both a debit and a credit

• ​A calculation of owner's equity

• ​The total debits and credits for the period

Which of the following is an example of a T-account?

• ​An account that includes only assets

• An account that includes only liabilities

• An account that includes only cash transactions

• An account that includes only owner equity

Why do many accountants create a worksheet?

• To aid in the process of completing a final balance sheet for the period

• To aid in the process of completing an unadjusted trial balance

• To aid in the process of completing a final income statement for the period

• To aid in the process of completing an adjusted trial balance

Which of the following is considered to be a financial statement?

• ​Balance sheet

• ​Trial balance

• Adjusted trial balance

• Journal and ledger entries

Which of the following questions can a balance sheet help to answer?

• Does the business have too many customers?

• Has too much credit been extended?

• Does the business have too many employees?

• Is the business making the right products?