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- Name – Quiz 11 – Accounting Cycle – (Answers)
- Topic – Accounting Cycle
- Answers with Explanation
Q1. Trading account is prepared after the _____.
Ans. As per the accounting cycle, a trading account is prepared after the trial balance.
Q2. The ultimate goal of an organization is to prepare _____.
Ans. The ultimate goal of an organization is to prepare financial statements for all internal and external users.
Q3. The sequence of steps in an accounting cycle can be performed in any order.
Ans. The given statement is False. In an accounting cycle, the sequence of steps must be performed chronologically.
Q4. Preparation of financial statements is usually the last step of an accounting cycle.
Ans. The given statement is True. Preparation of financial statements and reporting them to internal and external stakeholders is the end goal of an accounting cycle.
Q5. Preparation of a trial balance comes before preparing _____.
Ans. Preparation of a trial balance comes before preparing financial statements.
Q6. After the ledger accounts are balanced and adjustments are made, _____ is prepared.
Ans. After balancing the ledger accounts and recording all adjustments a trial balance is prepared.
Q7. After journal entries are recorded, ledger accounts are prepared.
Ans. The given statement is True. All ledger accounts are created immediately after the journal entries have been recorded.
Q8. Voucher/Evidence is prepared before recording _____.
Ans. Evidence such as vouchers, goods receipt note, receipts, etc. is gathered before recording the journal entries. (wherever possible).
Q9. After a transaction is recognized, it is _____.
Ans. Typically, when a transaction is identified, a journal entry is passed (journalized) to record the transaction.
Q10. First step of an accounting cycle is to _____ a transaction.
Ans. The first step of an accounting cycle involves identifying a transaction.
Q11. Accounting cycle describes the _____ in which the accounting process takes place.
Ans. The accounting cycle is a sequential order in which an accounting process is carried out. It is a step-by-step process to reach the end goal of accounting.
Q12. Trial Balance is prepared from_____.
Ans. Trial balance is a list of all ledger account balances. Entries are posted in the following order journal > ledger > trial balance.