The Accounting Cycle Quiz

Accounting Accounts

• Temporary accounts, such as revenue, expense, and dividend accounts, are closed at the end of the accounting period.
• A controlling account is a general ledger account that summarizes and controls the subsidiary ledger accounts.
• A contra account is a type of account that cannot stand alone and is technically neither an asset, liability, nor income and expense.

Ledger and Journal

• The process of transferring data from the journal to the appropriate accounts in the general ledger and subsidiary ledger is called posting.
• The general ledger includes all the accounts appearing on the financial statements.
• A subsidiary ledger holds temporarily certain information pending transfer to other ledger accounts.
• A reciprocal account has a counterpart in another book within the entity or in another ledger or another entity.
• A real account is an independent or standalone account.
• A mixed account is a combination of real and nominal accounts.

Ledger Purpose

• The purpose of a subsidiary ledger is to provide detailed information about a particular type of transaction or account.

Accounting Cycle

• The phase of the accounting cycle that involves recording and summarizing transactions is called journalizing.
• The purpose of a journal in accounting is to record transactions in chronological order.
• The sales journal is a special journal used to record only sales of merchandise on account.
• A simple journal entry contains a single debit and a single credit element.
• Permanent accounts, such as asset, liability, and equity accounts, are not closed and carry over to the next accounting period.
• The equation that represents the financial position of a company is Assets = Liabilities + Equity.

Journalizing

• The phase of the accounting cycle that involves analyzing the transaction and determining its impact on the financial position is called journalizing.
• The cash receipts journal is a special journal used to record all types of cash receipts.
• The purpose of a compound journal entry is to record multiple transactions or multiple debit and credit elements in a single entry.

Financial Statements

• A balance sheet is a statement of financial position or a so-called permanent account.

Test your knowledge of the accounting cycle with this quiz! Learn about the 9 basic steps, including the recording and summarizing phases. Explore topics such as analyzing transactions, source documents, and the impact on financial position. Challenge yourself and enhance your understanding of accounting principles.