CHAPTER 3: ACCOUNTING CYCLE

Accounting cycle is the process by which companies produce their financial statements for a specific period.

• TRUE

• FALSE

Net income (loss) will be calculated in the cash flow statements.

• TRUE

• FALSE

..................shows how capital changed during the period due to owner contributions, net income (or net loss) and owner withdrawals

• Statement of Comprehensive Income

• Statement of Owner's Equity

• Statement of Financial Position

The accounting cycle begins by recording _____________ in the form of journal entries.

• Business transactions

• Financial information

• Corporate minutes

• Business contracts

After a business transaction has occurred, journal entries are recorded in the...............

• General Ledger

• General Journal

• Expense Account

• Statement of Financial Position

Once journal entries are recorded, they can be posted to..........

• General Journals

• Ledger Accounts

• Statement of Comprehensive Income

• Expense Reports

Entries that are made at the end of a period to correct accounts before financial statements are prepared:

• Closing entries

• Adjusting entries

• Reversing entries

• Journal entries

Reports that can be prepared from the adjusted trial balance:

• Financial Statements

• Expense Reports

• Inventory Reports

• Payroll Spending Reports

A journal is also known as book of original entry.

• TRUE

• FALSE

A journal is prepared on the concept of single entry system.

• TRUE

• FALSE