Introduction to the Accounting Cycle
Introduction to the Accounting Cycle
Introduction to the Accounting Cycle
1. Describe the steps in recording and posting the effects of a business transaction, names the types of accounts for all items. Provide some examples of source documents used in these steps; define “debit” and “credit”, correctly.
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2. Name all steps in the accounting cycle that are performed throughout the cycle, which ones are performed only at the end of the accounting period, and research three of the most commonly used accounting software packages.
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3. Explain why separate “expense” and “revenue” accounts are used, describe three examples of transactions that would affect a firm’s income statement, identify the effect on the firm’s net income, and explain the purpose of the “dividends” account, circumstances for increasing it, and when the account would be decreased.
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4. Describe if it is conceivable that an entry involves only one debit and one credit and justify the response for all items.
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5. Define the “normal” balance for an account, the rules of debit and credit for accounts appearing on a firm’s balance sheet, and rules associated with accounts appearing on a firm’s income statement.
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