Source Documents
What are the five types of source documents?
They are Checks, Sales Invoice, Receipts, Calculator Tapes, and Memorandums
What are the three main columns of the worksheet?
Trial balance, income statement, and balance sheet
Financial statements are prepared from ______.
the worksheet
What is the balance of temporary accounts after closing entries?
Zero
Where are journal entries posted to?
The general ledger
When are Sale Invoices are used?
When services are sold on account
What does the income statement column determine?
What are the three financial statements?
Income Statement, Changes in Owner's Equity, and Balance Sheet
How many closing entries are there?
Four
Is the the format of the date on the Income Statement the same as on the Changes of Owner's Equity?
No. The Income Statement has "For the Month Ended"
What occurs during the Source document phase of the accounting cycle?
Documents are checked for accuracy and transactions are analyzed into debit and credit parts
Where does the information for the Work Sheet come from?
The general ledger
What does an income statement indicate?
The financial progress of a business in earning a net income or net loss.
What is used to check the closing entries?
The post-closing trial balance
What are accounts called with balances that are carried over?
Permanent Accounts
When is a Memorandum used?
When no other source document is prepared or when additional explanation is needed about the transaction
If there is a net loss is the income statement column debited or credited?
Debited
What are Financial Statements?
Financial reports that summarize the financial condition and operations for a business
If there is a net loss for the period will income summary be closed by a debit or credit?
Credit
What is the last step of the accounting cycle?
Preparing a Post-Closing trial balance
Why are sources documents important to the accounting cycle?
Source documents describe each transaction and prove that the transaction occurred before being entered into accounts
Why is the worksheet important to the accounting cycle?
The worksheet is used to complete the financial statements, adjusting and closing entries, and post-closing trial balance
How are financial statements beneficial for the rest of the accounting cycle?
Information is used to confirm information on the worksheet and is used to help perform closing entries
How are closing entries important to the accounting cycle?
They prepare the temporary accounts for the new fiscal period and provide the information that can be posted in the general and then create a post-closing trial balance.
What are changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period?
Adjustments