Earl Geraldson D.

de Leon 9/10/2020
BFAC02 INTERM1

Discussion Questions - The Accounting

Process
1. Why do we need to analyze the transactions before we journalize? Give
some examples of documents you need to analyze the business
transaction of your company.
• There are many reasons, but the analyzing of transactions is needed so that
we may know what account name to use and it will validate which accounts
are increased or decreased stands out as the biggest reason I could think of.
Some examples of the documents needed are official receipts, invoices,
banking transactions for the actual journalizing of accounts, and then the
journals, balance sheet, and income statement are some of the documents
that accountants use for the company.
2. What is the major difference between Real and Nominal Account?
• Real Accounts carry their balances for every accounting period while nominal
accounts are closed every period since they are counted as “temporary” Real
accounts would include Property, Equipment, Cash, Payables, etc. while
nominal accounts are mostly income and expenses.

3. When you journalize the transaction, how do you use the accounting
equation?
• It would always return to asset is the sum of liabilities and owner’s equity. For
example, an increase or a decrease in an asset will trigger an increase or
decrease in liability, owner’s equity, and sometimes both.
4. What is the importance of the trial balance?
 • The trial balance holds all the accounts of any company. It is the paper that
tells everyone involved if the company is earning money or losing it. Simply
put, it’s what everyone in and out of the business needs to start deciding on
what they must do.

5. What kind of checking do you need to determine if the unadjusted trial

balance you prepared is correct?
• If the unadjusted trial balance I prepared is incorrect, the first step is to go
through the journal entries. There must’ve been an entry that was recorded
wrong. If there are no errors on the journal entries, I turn to the T-accounts
and look for what I did wrong while double checking the journal entries.
6. Why do we need to prepare the adjusting journal entries?
• In preparing the adjusting journal entries, we can see details that might have
been overlooked or events that happened after preparing the trial balance but
is still relevant to the accounting period. This is also where accrued expenses
and revenues may fall under as they might happen after the period.

https://www.youtube.com/watch?v=QfOsRz8939w