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Questions and Answers
What is the primary purpose of the Statement of Financial Position/Balance Sheet?
What is the primary purpose of the Statement of Financial Position/Balance Sheet?
- To show the cash inflows and outflows of the business
- To show the changes in owner's equity over time
- To show the income and expenses of the business
- To show how healthy the enterprise is (correct)
What is the correct sequence of the accounting cycle?
What is the correct sequence of the accounting cycle?
- Journalizing, Posting, Documentation, Preliminary Trial Balance
- Documentation, Journalizing, Posting, Preliminary Trial Balance (correct)
- Preliminary Trial Balance, Documentation, Journalizing, Posting
- Posting, Journalizing, Documentation, Preliminary Trial Balance
What is the accounting equation that represents the relationship between assets, liabilities, and owner's equity?
What is the accounting equation that represents the relationship between assets, liabilities, and owner's equity?
- Assets = Liabilities + Owner's Equity (correct)
- Owner's Equity = Assets + Liabilities
- Assets = Liabilities - Owner's Equity
- Liabilities = Assets - Owner's Equity
What type of business organization purchases goods that are ready for sale?
What type of business organization purchases goods that are ready for sale?
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What is the term for the process of transferring entries from the journal to the general ledger?
What is the term for the process of transferring entries from the journal to the general ledger?
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What is the purpose of adjusting entries at the end of the accounting period?
What is the purpose of adjusting entries at the end of the accounting period?
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