MAC 716: Week 4 Exam Questions With
Complete Answers
What is the first step in the accounting cycle? - ANSWER Analyze the
transaction
What is the second step in the accounting cycle? - ANSWER Journalize the
transaction
What is the third step in the accounting cycle? - ANSWER Post to the
general ledger
What is the fourth step in the accounting cycle? - ANSWER Prepare the
unadjusted trial balance
What is the fifth step in the accounting cycle? - ANSWER Prepare adjusting
journal entries
What is the sixth step in the accounting cycle? - ANSWER Prepare the
adjusted trial balance
What is the seventh step in the accounting cycle? - ANSWER Prepare
financial statements
What is the eighth step in the accounting cycle? - ANSWER Close
temporary accounts
What is the ninth step in the accounting cycle? - ANSWER Prepare post-
closing trial balance
What is an Accounting Information System (AIS)? - ANSWER A system
that collects, records, stores, and processes data to produce information for
decision makers.
, What is the difference between data and information? - ANSWER Data are
basic facts that describe an event, while information is the organization of
data that is useful to users.
What are the seven critical characteristics of information? - ANSWER
Relevant, Reliable, Complete, Timely, Understandable, Verifiable,
Accessible.
How does an AIS add value to an organization? - ANSWER By improving
efficiency, sharing critical information, enhancing decision making, and
identifying product needs.
What is the purpose of preparing adjusting journal entries? - ANSWER To
ensure that all revenues and expenses are recorded in the correct
accounting period.
What is the role of the unadjusted trial balance? - ANSWER To ensure that
total debits equal total credits before adjustments are made.
What is the purpose of closing temporary accounts? - ANSWER To reset
the balances of temporary accounts to zero for the next accounting period.
What documents are typically involved in the sales transaction cycle? -
ANSWER Sales invoice and shipping document.
What is the significance of the accounts receivable subsidiary ledger? -
ANSWER It tracks amounts owed by customers, providing detailed
information on individual customer balances.
What is the adjusted trial balance used for? - ANSWER To ensure that total
debits equal total credits after adjustments have been made.
What are the key components of an AIS? - ANSWER People, procedures,
data, software, and information output.
What is the importance of internal controls in an AIS? - ANSWER To
protect data integrity and ensure compliance with company policies.
Complete Answers
What is the first step in the accounting cycle? - ANSWER Analyze the
transaction
What is the second step in the accounting cycle? - ANSWER Journalize the
transaction
What is the third step in the accounting cycle? - ANSWER Post to the
general ledger
What is the fourth step in the accounting cycle? - ANSWER Prepare the
unadjusted trial balance
What is the fifth step in the accounting cycle? - ANSWER Prepare adjusting
journal entries
What is the sixth step in the accounting cycle? - ANSWER Prepare the
adjusted trial balance
What is the seventh step in the accounting cycle? - ANSWER Prepare
financial statements
What is the eighth step in the accounting cycle? - ANSWER Close
temporary accounts
What is the ninth step in the accounting cycle? - ANSWER Prepare post-
closing trial balance
What is an Accounting Information System (AIS)? - ANSWER A system
that collects, records, stores, and processes data to produce information for
decision makers.
, What is the difference between data and information? - ANSWER Data are
basic facts that describe an event, while information is the organization of
data that is useful to users.
What are the seven critical characteristics of information? - ANSWER
Relevant, Reliable, Complete, Timely, Understandable, Verifiable,
Accessible.
How does an AIS add value to an organization? - ANSWER By improving
efficiency, sharing critical information, enhancing decision making, and
identifying product needs.
What is the purpose of preparing adjusting journal entries? - ANSWER To
ensure that all revenues and expenses are recorded in the correct
accounting period.
What is the role of the unadjusted trial balance? - ANSWER To ensure that
total debits equal total credits before adjustments are made.
What is the purpose of closing temporary accounts? - ANSWER To reset
the balances of temporary accounts to zero for the next accounting period.
What documents are typically involved in the sales transaction cycle? -
ANSWER Sales invoice and shipping document.
What is the significance of the accounts receivable subsidiary ledger? -
ANSWER It tracks amounts owed by customers, providing detailed
information on individual customer balances.
What is the adjusted trial balance used for? - ANSWER To ensure that total
debits equal total credits after adjustments have been made.
What are the key components of an AIS? - ANSWER People, procedures,
data, software, and information output.
What is the importance of internal controls in an AIS? - ANSWER To
protect data integrity and ensure compliance with company policies.
