PRINCIPLES OF ACCOUNTING
MODULE 4
Module-4---ans-✔✔The-accounting-cycle-and-accounting-information-systems
introduction-to-the-module---ans-✔✔1.-the-accounting-cycle-is-a-series-of-8-steps-
performed-throughout-the-accounting-period-to-analyze,-record,-classify,-summarize,-and-
report-useful-financial-information-for-the-purpose-of-preparing-financial-statements
2.-understanding-the-steps-of-the-accounting-cycle-will-help-you-to-understand-financial-
accounting-information-and-make-informed-financial-decisions
accounting-cycle---ans-✔✔1.-series-of-steps-performed-during-the-accounting-period-
(some-throughout-the-period-and-some-at-the-end)-to-analyze,-record,-classify,-
summarize,-and-report-useful-financial-information-for-the-purpose-of-preparing-financial-
statements
business-transactions---ans-✔✔1.-measurable-events-that-affect-the-financial-condition-of-
a-business
-these-events-must-have-caused-a-measurable-change-in-the-amounts-and-the-accounts-
included-in-the-accounting-equation
assets-=-liabilities-+-stockholder's-equity
source-document---ans-✔✔1.-the-evidence-that-business-event-has-occurred-
-sales-ticket,-check,-and-so-on
2.-important-because-they-are-the-ultimate-proof-of-business-transactions
steps-of-the-accounting-cycle---ans-✔✔1.-analyze-transactions-by-examining-source-
documents-resulting-from-a-management-decision-or-an-event-
2.-journalize-transactions-in-the-general-journal
3.-post-entries-to-the-respective-accounts-in-the-general-ledger-prepare-a-trial-balance-of-
the-unadjusted-accounts-and-begin-the-trial-balance-worksheet
, 4.-prepare-a-trial-balance-of-the-unadjusted-accounts-and-begin-the-trial-balance-
worksheet
5.-journalize-and-post-adjusting-journal-entries,-prepare-adjusted-trial-balance,-and-
complete-worksheet
6.-prepare-the-financial-statements
7.-journalize-and-post-closing-entries
8.-prepare-the-post-closing-trial-balance
journalizing---ans-✔✔1.-the-process-of-entering-the-effects-of-a-transaction-in-a-journal
2.-then,-the-information-is-transferred,-or-posted,-to-the-proper-accounts-in-the-ledger
posting---ans-✔✔1.-the-process-of-recording-in-the-general-ledger-accounts-the-
information-contained-in-the-journal
2.-note:-the-transaction-date-in-both-the-general-journal-and-in-the-general-ledger-is-the-
same.
-in-the-general-ledger-the-same-date-is-used-even-if-the-transaction-posts-several-days-
later
accrual-basis-of-accounting---ans-✔✔1.-accountants-use-the-accrual-basis-of-accounting-
to-record-revenues-and-expenses-in-accordance-with-GAAP
2.-record-revenues-when-the-company-makes-a-sale-or-performs-a-service,-regardless-of-
when-the-company-receives-the-cash
3.-under-the-accrual-basis-of-accounting,-expenses-are-matched-to-the-revenues-that-are-
recorded,-whether-or-not-the-company-has-paid-for-those-expenses,-yet,-in-cash-or-not
the-matching-concept---ans-✔✔1.-the-matching-of-expenses-to-revenues-in-the-period-
that-revenues-are-recorded
unearned-service-revenue---ans-✔✔1.-services-to-be-performed-at-a-future-date
2.-unearned-service-revenue-is-a-liability-because,-if-the-services-are-never-performed,-
the-money-has-to-be-refunded
posting-to-ledger-accounts---ans-✔✔1.-t-account-is-synonymous-with-a-ledger
2.-postings-can-be-made-by-summarizing-entries-in-a-journal,-or-by-directly-recording-
individual-transactions-to-their-respective-general-ledger-account
MODULE 4
Module-4---ans-✔✔The-accounting-cycle-and-accounting-information-systems
introduction-to-the-module---ans-✔✔1.-the-accounting-cycle-is-a-series-of-8-steps-
performed-throughout-the-accounting-period-to-analyze,-record,-classify,-summarize,-and-
report-useful-financial-information-for-the-purpose-of-preparing-financial-statements
2.-understanding-the-steps-of-the-accounting-cycle-will-help-you-to-understand-financial-
accounting-information-and-make-informed-financial-decisions
accounting-cycle---ans-✔✔1.-series-of-steps-performed-during-the-accounting-period-
(some-throughout-the-period-and-some-at-the-end)-to-analyze,-record,-classify,-
summarize,-and-report-useful-financial-information-for-the-purpose-of-preparing-financial-
statements
business-transactions---ans-✔✔1.-measurable-events-that-affect-the-financial-condition-of-
a-business
-these-events-must-have-caused-a-measurable-change-in-the-amounts-and-the-accounts-
included-in-the-accounting-equation
assets-=-liabilities-+-stockholder's-equity
source-document---ans-✔✔1.-the-evidence-that-business-event-has-occurred-
-sales-ticket,-check,-and-so-on
2.-important-because-they-are-the-ultimate-proof-of-business-transactions
steps-of-the-accounting-cycle---ans-✔✔1.-analyze-transactions-by-examining-source-
documents-resulting-from-a-management-decision-or-an-event-
2.-journalize-transactions-in-the-general-journal
3.-post-entries-to-the-respective-accounts-in-the-general-ledger-prepare-a-trial-balance-of-
the-unadjusted-accounts-and-begin-the-trial-balance-worksheet
, 4.-prepare-a-trial-balance-of-the-unadjusted-accounts-and-begin-the-trial-balance-
worksheet
5.-journalize-and-post-adjusting-journal-entries,-prepare-adjusted-trial-balance,-and-
complete-worksheet
6.-prepare-the-financial-statements
7.-journalize-and-post-closing-entries
8.-prepare-the-post-closing-trial-balance
journalizing---ans-✔✔1.-the-process-of-entering-the-effects-of-a-transaction-in-a-journal
2.-then,-the-information-is-transferred,-or-posted,-to-the-proper-accounts-in-the-ledger
posting---ans-✔✔1.-the-process-of-recording-in-the-general-ledger-accounts-the-
information-contained-in-the-journal
2.-note:-the-transaction-date-in-both-the-general-journal-and-in-the-general-ledger-is-the-
same.
-in-the-general-ledger-the-same-date-is-used-even-if-the-transaction-posts-several-days-
later
accrual-basis-of-accounting---ans-✔✔1.-accountants-use-the-accrual-basis-of-accounting-
to-record-revenues-and-expenses-in-accordance-with-GAAP
2.-record-revenues-when-the-company-makes-a-sale-or-performs-a-service,-regardless-of-
when-the-company-receives-the-cash
3.-under-the-accrual-basis-of-accounting,-expenses-are-matched-to-the-revenues-that-are-
recorded,-whether-or-not-the-company-has-paid-for-those-expenses,-yet,-in-cash-or-not
the-matching-concept---ans-✔✔1.-the-matching-of-expenses-to-revenues-in-the-period-
that-revenues-are-recorded
unearned-service-revenue---ans-✔✔1.-services-to-be-performed-at-a-future-date
2.-unearned-service-revenue-is-a-liability-because,-if-the-services-are-never-performed,-
the-money-has-to-be-refunded
posting-to-ledger-accounts---ans-✔✔1.-t-account-is-synonymous-with-a-ledger
2.-postings-can-be-made-by-summarizing-entries-in-a-journal,-or-by-directly-recording-
individual-transactions-to-their-respective-general-ledger-account
