Assessment: Accounting Cycle

Choose the correct answer. Which of the following is the correct order of steps in the accounting cycle?

• Posting → Journalizing → Trial Balance

• Journalizing → Posting → Trial Balance

• Trial Balance → Journalizing → Posting

• Trial Balance → Posting → Journalizing

Choose the correct answer. What is the purpose of journalizing?

• To check equality of debits and credits

• To summarize ledger accounts

• To record business transactions in the general journal

• To prepare financial statements

Choose the correct answer. Posting is the process of:

• Recording transactions in the journal

• Transferring journal entries to the ledger

• Preparing the trial balance

• Balancing the accounting equation

Choose the correct answer. Which financial record shows all accounts and their balances to verify equality of debits and credits?

• General Journal

• Ledger

• Trial Balance

• Balance Sheet

Choose the correct answer. When the owner invests cash into the business, which accounts are affected?

• Cash (credit), Capital (debit)

• Cash (debit), Capital (credit)

• Capital (debit), Revenue (credit)

• Cash (debit), Drawing (credit)

Choose the correct answer. If a business borrows money from the bank, which accounts are debited and credited?

• Loans Payable (debit), Cash (credit)

• Cash (credit), Loans Payable (debit)

• Cash (debit), Loans Payable (credit)

• Loans Payable (credit), Capital (debit)

Choose the correct answer. Which of the following is an asset account?

• Accounts Payable

• Cash

• Capital

• Service Revenue

Choose the correct answer. A trial balance is prepared to:

• Record transactions

• Verify that total debits equal total credits

• Show profit or loss

• Compute total assets

Choose the correct answer. Which account normally has a credit balance?

• Cash

• Supplies

• Capital

• Equipment

Choose the correct answer. Which of the following transactions increases owner’s equity?

• Owner withdraws cash

• Owner pays utilities

• Owner invests additional cash

• Business purchases supplies