Steps
What is the second step of the accounting cycle?
Journal.
There are 8 steps in the accounting cycle.
What does COGS stand for?
Cost of goods sold.
4 accounts.
What is the first step in the accounting cycle?
Business Transactions.
There is one financial statement.
False
What accounts appear on the balance sheet.
Assets, Liabilities, and Owners Equity.
How to calculate COGS for Perpetual System of accounting?
The beginning inventory amount - the ending inventory amount.
What is the first account you need to close?
Revenue account.
What is the final step of the accounting cycle?
Post-Closing trial balance.
Adjustments are done before the post closing trial balance.
True.
What accounts appear on the income statment.
Revenue and Expenses.
What does the periodic system use since they don't have COGS?
Merchandise Inventory.
What is the second account you need to close?
What step is financial statements?
Step 6.
The trial balance is done after the income statement.
False, it is done before.
How do you calculate Net Profit/Loss?
Revenue - Expenses = Net Profit/Loss
Where does COGS appear?
The Perpetual system of accounting.
What is the third account you need to close?
Net income (Transfer)
What is the 7 step of the accounting cycle?
Closing Entries.
The accounting cycle is the same for every business.
False, it can vary between business.
Where do Debits and Credit appear?
Debits on the Left, Credits on the right.
How does a merchandising business determine its income?
Revenue - COGS = Gross Profit; Gross Profit - expenses = Net income
What is the last account you need to close?
Drawings (reduce to 0)