Step 1
What is step 1 of the Accounting Cycle?
Analyze Transactions & Source Documents
What is step 2 of the Accounting Cycle?
Record transactions in the general journal
What is step 3 of the Accounting cycle?
Post journal transactions to the ledger.
What is step 4 of the Accounting cycle?
What is step 5 of the accounting cycle?
Create a worksheet with adjusting entries.
What is the normal balance of an asset?
Debit
The General Journal is also called this.
The book of original entry.
The general ledger is organized by what?
Accounts
When does a trial balance take place?
At the end of an accounting cycle before the financial statements are printed.
What are the two types of adjusting entries known as and what is the major distinction between the two?
Deferrals and Accruals
Accruals are made for payments after an expense/revenue occurrence. Deferrals are made for payments that occurred before an expense/revenue occurrence.
How do I increase the capital account?
Credit
Describe the three lines of a journal entry.
1st line: Debit
2nd line: Credit
3rd line: Description of the transaction
What is the difference between a general ledger and a chart of accounts?
The ledger organizes transactions and balances by account, while the chart of accounts organizes accounts by number. Ledgers include transactions, chart of accounts is only a listing of the names.
Where do the balances for the trial balance get pulled from?
The general ledger
Pat’s Party Planning receives a $1,200 payment on March 30th from a new customer for an event that is three months away. At the end of the accounting cycle on April 30th, what is the amount of the adjusting entry used to decrease deferred revenue and recognize (increase) service revenue?
$400
The customer paid $1,200 for three months of work. Therefore, the amount to be adjusted over the next two months is the original payment divided or deferred over three months. 1,200/3 = $400
Tell me the debit and credit for the following transaction.
"Paid annual insurance premium with cash."
Debit Prepaid Insurance | Credit Cash
Journal entries are recorded in what order?
Chronological
List the account numbers associated with each of the account classifications.
100 Assets
200 Liabilities
300 Owner's Equity
400 Revenue
500 Expenses
What are the steps to manually prepare an unadjusted trial balance?
List Accounts, Record Account Balances, Balance Check
On May 1st, Shine Right paid $1,200 to rent a billboard advertisement for 8 months.
Make the adjusting entry for one month.
Debit Advertising Expense, $150
Credit Prepaid Advertising, $150
Tell me the debit and credit for the following transaction.
"Customer prepaid $5000 for beach chair service for 3 months."
Debit Cash, $5000
Credit Unearned Service Revenue, $5000
What type of source document would be used to support the sale or purchase of goods and/or services on account?
Purchase Order or Invoice
Create the account titles and numbers for the following transaction:
"Purchased an advertisement using a credit card."
220 Credit Card
520 Advertising Expense
In what order would these accounts appear on the trial balance?
Accounts Payable
Cash
Service Revenue
Credit Card
Office Expense
Cash
Accounts Payable
Credit Card
Service Revenue
Office Expense
On January 1st, Shine Right prepaid $3,600 for 12 months of garage rent.
Make the adjusting entry for the quarter.
Debit Garage Rent Expense, $900
Credit Prepaid Garage Rent, $900