Financial Statements Accounting Cycle Ethics Transactions Source Documents

QUESTION: What’s the second step of the accounting cycle? ANSWER: To Analyze the Transaction

QUESTION: When you are analyzing a transaction, at least how many accounts are affected? ANSWER: Two

QUESTION: When posting an entry to which are you posting, the general journal or the general ledger? ANSWER: General Ledger

QUESTION: Where does the information from adjusting accounts come from? ANSWER: The Worksheet

QUESTION: Which steps of the accounting cycle are done throughout the month? Which are done to close a month? ANSWER: During the month: Steps 1-4 To Close: Steps: 5-10

QUESTION: What is the study of right and wrong, and how people choose to do what is right or wrong? ANSWER: Ethics

QUESTION: What ethic are you using when you create trueand correct financial statements? ANSWER: Integrity

QUESTION: What principle of ethics are you using when you don’t allow your personal interests to influence your choices and work? ANSWER: Objectivity

QUESTION: What does ethics mean in terms of a business as a whole? ANSWER: It is a code of conduct that the business encourages all its employees to follow.

QUESTION: List the five different principles of ethics. ANSWER: Integrity, Objectivity, Independence, Competence, Confidentiality

QUESTION: Received cash from sales $ ANSWER: Debit Cash $500 and credit Sales $500

QUESTION: Paid cash to owner for personal use $ ANSWER: Debit Drawing $2800 and Credit Cash $2800

QUESTION: Received cash on account from Covey Company $ ANSWER: Debit Cash $200 and Credit Accounts Receivable- Covey Company $200

QUESTION: Sold services on account to Tony’s Limos $ ANSWER: Debit Accounts Receivable- Tony’s Limos $582 and Credit Sales $582

QUESTION: Paid cash for telephone bill $70.00 ANSWER: Debit Utilities Expense $70 and Credit Cash $70

QUESTION: What source document is used for all sales on account? ANSWER: Sales Invoice

QUESTION: What source document is used when you order a bank to pay cash from a bank account? ANSWER: Check

QUESTION: What source document is used to calculate the total cash sales at the end of a day? ANSWER: Calculator Taper

QUESTION: When are memorandums used? ANSWER: When there is no other type of source document.

QUESTION: Why are source documents essential to analyzing transactions? ANSWER: The source document proves that the transaction occurred.

QUESTION: What are the sections of the balance sheet? ANSWER: Header, assets, liabilities, owner’s equity.

QUESTION: What are the sections of the income statement? ANSWER: Header, revenue, expenses, net income/loss, component percentages.

QUESTION: What is on the top of all financial statements, and what are the three parts of it? ANSWER: Header; it’s made up of the company name, the name of the report, and the date.

QUESTION: What are the steps when recording a journal entry in the general journal? ANSWER: 1. Write the date. 2. Write the name of the account debited. 3. Record the amount debited. 4. Write the name of the account credited. 5. Record the amount credited. 6. Record the source document in the Document Number column.

QUESTION: What are the steps when posting to the general ledger? ANSWER: 1. Write the date. 2. Write the journal page number in the post reference column. 3. Write the amount debited or credited. 4. Write the new account balance in the appropriate column. 5. Return to the journal and record the account number in the post reference column.

List all 10 steps of the accounting cycle.

1.Collect and verify source documents. 2.Analyze transaction. 3.Journalize in the general journal. 4.Post to the general ledger. 5.Prepare trial balance. 6.Prepare worksheet. 7.Prepare financial statement. 8.Journalize and post adjustment entries. 9.Journalize and post closing entries. 10.Prepare a post closing trial balance.