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Questions and Answers
What is the first step in the accounting cycle?
Use source documents to identify accounts affected by external transactions.
What is the second step in the accounting cycle?
Analyze the impact of the transaction on the accounting equation.
What is the third step in the accounting cycle?
Assess whether the transaction results in a debit or a credit to the account balance.
What is the fourth step in the accounting cycle?
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What is the fifth step in the accounting cycle?
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What is the sixth step in the accounting cycle?
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What is the seventh step in the accounting cycle?
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What is the eighth step in the accounting cycle?
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What is the ninth step in the accounting cycle?
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Study Notes
Accounting Cycle Steps
- Identify affected accounts by reviewing source documents related to external transactions.
- Analyze the effect of transactions on the accounting equation (Assets = Liabilities + Equity).
- Determine if the transaction causes a debit or credit entry to the account balance.
- Record the transaction in the journal for proper tracking.
- Post the recorded transaction to the appropriate T-accounts in the general ledger.
- Prepare a trial balance to ensure that debits equal credits, confirming the accounts are in balance.
- Make necessary adjusting entries to account for accruals, deferrals, and estimates.
- Prepare financial statements, including the income statement, statement of stockholders' equity, balance sheet, and statement of cash flows.
- Record and post closing entries to reset temporary accounts for the next accounting period.
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Description
Test your knowledge on the accounting cycle by listing the steps in proper order. This quiz covers everything from identifying affected accounts to recording the transactions. Brush up on your accounting skills and ensure you understand each critical step in the cycle.
