TOA03-02-Accounting-Process 2 janhh znkajHhHyGgK aihbahahtaatttataay8abbah FbaiuDnvlsdcosdncsduincunccnaijecnskeucnwiurcnwriuncjrncurbcuwrnfinrucinarfiunsriunfiuwrnfwiurnfiuwrbfiuwrnvwkjrnckwjrncwkjrncijwrnncijwrcnwkjrnfwrkjfnwkjrnfwkjrnvkjsrnvIUSrvnihrwn PDF

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ACCOUNTING PROCESS 1. The accounting equation a. Is used to determine the amount of liabilities owned b. Shows the claims on the entity’s assets represented by creditors and owners c. Shows the claims on the owner’s equity represented by creditors d. Is used to determine the amount of income earned during the most recent accounting period 2. The double-entry system of accounting means that every transaction a. Is recorded initially on both the journal and the general ledger b. Increases one general ledger account while decreasing another c. Affects at least two general ledger accounts and is recorded by an equal amount of debits and credits d. Results in changes in accounts on both sides of the balance sheet 3. Which among the rules on debit and credit below is not correct? a. The normal balance of any account appears on the side for recording increases b. Assets and expenses are debited when increased, and liabilities, revenues and equity are credited when increased c. The debit is always on the left side of the accounting double entry d. Debit means increase, and credit means decrease 4. Debits a. b. c. d.

Increase assets and decrease expenses, liabilities, revenue, and equity Increase assets and expenses and decrease liabilities, revenue and equity Increase assets and equity and decrease liabilities, expenses and revenue Decrease assets and expenses and increase liabilities, revenue and equity

5. X purchased a new register system for his grocery store, paying P1,000 in cash and issuing a P6,000 note payable for the balance owed. As a result of this transaction, X’s balance sheet would reflect a. An increase in assets and an increase in liabilities b. A decrease in assets and an increase in liabilities c. An increase in assets and a decrease in liabilities d. An increase in assets and an increase in owner’s equity 6. Which among the following is the last step in the accounting cycle? a. Preparation of reversing entries b. Preparation of financial statements c. Journalizing and posting of closing entries d. Preparation of the post-closing trial balance 7. Which is the correct sequence for recording transactions and preparing financial statements? a. Journal, ledger, trial balance, financial statements b. Ledger, trial balance, journal, financial statements c. Financial statements, trial balance, ledger, journal d. Ledger, journal, trial balance, financial statements 8. Journalizing is performed in what phase of the accounting process? a. Reporting b. Recording c. Classifying d. Summarizing 9. General ledger serves what phase of the accounting process? a. Reporting b. Recording

c. Classifying d. Summarizing

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