General Accounting Exam 2 Quizs

The document used to prepare financial statements with 5 sections

• Worksheet

• Balance Sheet

• Income Statement

• Cash Flow Statement

Accumulated Depreciation type of account

• Asset

• Liability

• Contra-asset

• Revenue

The process of transferring information from a journal to the general ledger

• Posting

• Recording

• Balancing

• Summarizing

Accounts that appear on the Income Statement

• Assets and Liabilities

• Revenues and Expenses

• Cash Flows and Investments

• Equity and Dividends

Chronological record of business activities

• Journal or general journal

• Ledger

• Balance sheet

• Trial balance

The purpose of a trial balance

• To ensure that debits equal credits in the ledger

• To prepare financial statements

• To record daily transactions

• To calculate net income

The purpose of the closing process

• To get all temporary accounts to 0, get the Owner’s Capital to match the Statement of Owner’s Equity balance

• To prepare financial statements for the next accounting period

• To record all transactions for the current period

• To calculate the total revenue and expenses for the year

The normal balance of the Income Summary account

• 0 (it does not have one)

• Debit

• Credit

• Depends on the accounting period

Journal entries with more than one debit or credit

• Simple entries

• Compound entries

• Single entries

• Complex entries

The first step of the accounting cycle

• Record transactions

• Analyze transactions

• Prepare financial statements

• Close the books