FAR - ACCOUNTING PROCESS (101001 - 101052)

101001 - THERE ARE __________ BASIC STEPS IN THE

ACCOUNTING CYCLE, WHICH INCLUDES 2 PHASES KNOWN 10; RECORDING; SUMMARIZING
AS __________ AND __________.
1. ANALYZING THE TRANSACTION
2. JOURNALIZING
3. POSTING
4. UNADJUSTED TRIAL BALANCE
101002 - STEPS IN THE SUMMARIZING PHASE OF 5. ADJUSTING ENTRIES
ACCOUNTING CYCLE (7 ITEMS) 6. ADJUSTED TRIAL BALANCE
7. FINANCIAL STATEMENTS
8. CLOSING ENTRIES
9. POST-CLOSING TRIAL BALANCE
10. REVERSING ENTRIES
101003 - THIS IS WHERE THE ACCOUNTANT GATHERS
INFORMATION FROM SOURCE DOCUMENTS AND
ANALYZING THE TRANSACTION
DETERMINES THE IMPACT OF THE TRANSACTION ON THE
FINANCIAL POSITION.
101004 - THIS IS THE PROCESS OF RECORDING THE
JOURNALIZING
TRANSACTIONS IN THE APPROPRIATE JOURNALS.
101005 - IS A CHRONOLOGICAL RECORD OF TRANSACTIONS
JOURNAL
ALSO KNOWN AS THE BOOK OF ORIGINAL ENTRY.
101006 - IS A JOURNAL WHERE ALL TRANSACTIONS COULD
GENERAL JOURNAL
BE RECORDED.
101007 - ARE JOURNALS USED IN RECORDING LARGE
SPECIAL JOURNALS
NUMBERS OF LIKE TRANSACTIONS.
1. SALES JOURNAL
2. CASH RECEIPTS JOURNAL
101008 - USUAL EXAMPLES OF SPECIAL JOURNALS (4 ITEMS)
3. PURCHASES JOURNAL
4. CASH DISBURSEMENTS JOURNAL
101009 - IS A SPECIAL JOURNAL WHERE ONLY SALES OF
SALES JOURNAL
MERCHANDISE ON ACCOUNT ARE RECORDED.
101010 - IS A SPECIAL JOURNAL WHERE ALL TYPES OF CASH
CASH RECEIPTS JOURNAL
RECEIPTS ARE RECORDED.
101011 - IS A SPECIAL JOURNAL USED TO RECORD ALL
PURCHASES ON ACCOUNT OF MERCHANDISE, EQUIPMENT, PURCHASES JOURNAL
SUPPLIES, ETC.
101012 - IS A SPECIAL JOURNAL WHERE ALL PAYMENTS OF
CASH DISBURSEMENTS JOURNAL
CASH FOR ANY PURPOSE ARE RECORDED.
101013 - TYPES OF JOURNAL ENTRIES ACCORDING TO FORM 1. SIMPLE JOURNAL ENTRY
(2 ITEMS) 2. COMPOUND JOURNAL ENTRY
101014 - IS A TYPE OF JOURNAL ENTRY WHICH CONTAINS A
SIMPLE JOURNAL ENTRY
SINGLE DEBIT AND A SINGLE CREDIT ELEMENT.
101015 - IS A TYPE OF JOURNAL ENTRY WHICH HAS TWO OR
MORE ELEMENTS IN EITHER OR BOTH DEBIT AND CREDIT
COMPOUND JOURNAL ENTRY
SIDES AND OFTEN REPRESENTS TWO OR MORE
TRANSACTIONS.
101016 - ARE THE STORAGE UNITS OF ACCOUNTING
INFORMATION AND USED TO SUMMARIZE CHANGES IN
ACCOUNTS
ASSETS, LIABILITIES AND EQUITY INCLUDING INCOME AND
EXPENSES.
101017 - ARE THE STATEMENT OF FINANCIAL POSITION OR
SO CALLED PERMANENT ACCOUNTS. THESE ACCOUNTS ARE
REAL ACCOUNTS
NOT CLOSED AND CARRYOVER TO THE NEXT ACCOUNTING
PERIOD. (EX. CASH, AR AND PPE)
101018 - ARE THE INCOME STATEMENT OR TEMPORARY
CAPITAL ACCOUNTS. THESE ACCOUNTS ARE CLOSED AT
NOMINAL ACCOUNTS
THE END OF THE ACCOUNTING PERIOD. (EX. SALES AND
EXPENSES)
101019 - WHILE STILL UNADJUSTED, REPRESENTS A
COMBINATION OF REAL AND NOMINAL ACCOUNTS. (EX. MIXED ACCOUNT
PREPAID EXPENSES)
101020 - IS THE GENERAL LEDGER ACCOUNT THAT
SUMMARIZES THE DETAILED INFORMATION IN A SUBSIDIARY CONTROL ACCOUNT
LEDGER.
101021 - IS AN ACCOUNT THAT HOLDS TEMPORARILY
SUSPENSE ACCOUNT
CERTAIN INFORMATION PENDING FOR DISPOSITION.
101022 - HAS A COUNTERPART IN ANOTHER BOOK WITH IN
RECIPROCAL ACCOUNT
THE ENTITY OR IN ANOTHER LEDGER OR ANOTHER ENTITY.
101023 - IS THE PROCESS OF TRANSFERRING DATA FROM
THE JOURNAL TO THE APPROPRIATE ACCOUNTS IN THE
GENERAL LEDGER AND SUBSIDIARY LEDGER. THIS POSTING
PROCESS CLASSIFIES ALL ACCOUNTS THAT WERE
RECORDED IN THE JOURNALS.
101024 - INCLUDES ALL THE ACCOUNTS APPEARING ON THE
GENERAL LEDGER
FINANCIAL STATEMENTS.
101025 - AFFORDS ADDITIONAL DETAIL IN SUPPORT OF
SUBSIDIARY LEDGER
CERTAIN GENERAL LEDGER ACCOUNTS.
 101026 - A LIST OF GENERAL LEDGER ACCOUNTS WITH
TRIAL BALANCE
THEIR RESPECTIVE DEBIT OR CREDIT BALANCE.
101027 - ARE JOURNAL ENTRIES MADE AT THE END OF AN
ACCOUNTING CYCLE TO UPDATE CERTAIN REVENUE AND
ADJUSTING ENTRIES
EXPENSE ACCOUNTS AND TO MAKE SURE YOU COMPLY
WITH THE MATCHING PRINCIPLE.
1. USUALLY REFER TO TRANSACTIONS THAT HAVE EFFECTS
ON MORE THAN ONE ACCOUNTING PERIOD;
101028 - CHARACTERISTICS OF ADJUSTING ENTRIES (3
2. INCLUDE AT LEAST 1 NOMINAL ACCOUNT AND 1 REAL
ITEMS)
ACCOUNT; AND
3. ARE GENERALLY NOT BASED ON SOURCE DOCUMENTS.
1. PREPAYMENTS
2. DEFERRALS
101029 - TYPICAL ADJUSTING ENTRY CLASSIFICATIONS (5 3. ACCRUED EXPENSES
ITEMS) 4. ACCRUED INCOME
5. ESTIMATES
6. ENDING INVENTORY
101030 - ARE EXPENSE ITEMS ALREADY PAID FOR BUT NOT
PREPAYMENTS
YET INCURRED.
101031 - METHODS OF INITIALLY RECORDING PREPAYMENTS 1. ASSET METHOD (DR. PREPAID EXPENSE; CR. CASH)
(2 ITEMS) 2. EXPENSE METHOD (DR. EXPENSE; CR. CASH)
101032 - PRO-FORMA ADJUSTING ENTRIES FOR
PREPAYMENTS WHEN THE ASSET METHOD WAS USED IN DR. EXPENSE - "EXPIRED PORTION"; CR. PREPAID EXPENSE
INTIALLY RECORDING THE TRANSACTION
101033 - PRO-FORMA ADJUSTING ENTRIES FOR
DR. PREPAID EXPENSE - "REMAINING PORTION"; CR.
PREPAYMENTS WHEN THE EXPENSE METHOD WAS USED IN
EXPENSE
INTIALLY RECORDING THE TRANSACTION
101034 - ARE INCOME ITEMS ALREADY COLLECTED IN CASH
DEFERRALS (DEFERRED INCOME)
BUT NOT YET EARNED.
101035 - METHODS OF INITIALLY RECORDING DEFERRALS (2 1. LIABILITY METHOD (DR. CASH; CR. UNEARNED INCOME)
ITEMS) 2. INCOME METHOD (DR. CASH; CR. INCOME)
101036 - PRO-FORMA ADJUSTING ENTRY FOR DEFERRALS
WHEN LIABILITY METHOD WAS USED IN INITIALLY DR. UNEARNED INCOME; CR. INCOME - "EXPIRED PORTION"
RECORDING THE TRANSACTION
101037 - PRO-FORMA ADJUSTING ENTRY FOR DEFERRALS
DR. INCOME; CR. UNEARNED INCOME - "REMAINING
WHEN THE INCOME METHOD WAS USED IN INITIALLY
PORTION"
RECORDING THE TRANSACTION
101038 - OCCUR IN TRANSACTIONS WHERE EXPENSE HAS
ACCRUED EXPENSE
ALREADY BEEN INCURRED BUT NOT YET PAID FOR IN CASH.
 101039 - PRO-FORMA ADJUSTING ENTRY FOR ACCRUED
DR. EXPENSE; CR. PAYABLE
EXPENSES
101040 - OCCUR IN TRANSACTIONS WHERE INCOME HAS
ACCRUED INCOME
BEEN ALREADY EARNED BUT NOT YET COLLECTED IN CASH.
101041 - PRO-FORMA ADJUSTING ENTRY FOR ACCRUED
DR. RECEIVABLE; CR. INCOME
INCOME
101042 - ARE ADJUSTING ENTRIES THAT DO NOT INVOLVE
ESTIMATES
CASH FLOWS.
101043 - COMMON EXAMPLES OF ESTIMATES THAT REQUIRE 1. PROVISION FOR DOUBTFUL ACCOUNTS
ADJUSTING ENTRIES (2 ITEMS) 2. DEPRECIATION
101044 - IS THE ESTIMATED AMOUNT OF BAD DEBT THAT
WILL ARISE FROM ACCOUNTS RECEIVABLE THAT HAVE BEEN PROVISION FOR DOUBTFUL ACCOUNTS
ISSUED BUT NOT YET COLLECTED.
101045 - IS THE SYSTEMATIC ALLOCATION OF THE COST OF
DEPRECIATION
A FIXED ASSET OVER ITS USEFUL LIFE.
101046 - IS AN ADJUSTMENT USED TO SET UP THE YEAR-END
COUNT OF THE INVENTORY. THIS ONLY APPLIES IF THE ENDING INVENTORY
PERIODIC INVENTORY SYSTEM IS USED.
101047 - IS THE MOST IMPORTANT PART OF THE
SUMMARIZING PHASE. THIS IS WHERE THE PROCESSED PREPARING THE FINANCIAL STATEMENTS.
INFORMATION IS COMMUNICATED TO USERS.
1. STATEMENT OF FINANCIAL POSITION
2. INCOME STATEMENT OR STATEMENT OF COMPREHENSIVE
INCOME
101048 - BASIC FINANCIAL STATEMENTS (5 ITEMS)
3. STATEMENT OF CHANGES IN EQUITY
4. STATEMENT OF CASH FLOWS
5. NOTES AND DISCLOSURES
101049 - ARE RECORDED AND POSTED FOR THE PURPOSE
OF CLOSING ALL NOMINAL OR TEMPORARY ACCOUNTS TO
THE INCOME SUMMARY ACCOUNT AND THE RESULTING NET CLOSING ENTRIES
INCOME OR LOSS IS AFTERWARDS CLOSED TO THE CAPITAL
OR RETAINED EARNINGS ACCOUNT.
101050 - ARE MADE AT THE BEGINNING OF THE NEW
ACCOUNTING PERIOD TO REVERSE CERTAIN ADJUSTING REVERSING ENTRIES
ENTRIES FROM THE PRECEDING ACCOUNTING PERIOD.
1. PREPAYMENTS WHEN EXPENSE METHOD IS USED
101051 - ADJUSTING ENTRIES THAT MAY BE REVERSED (4 2. DEFERRALS WHEN INCOME METHOD IS USED
ITEMS) 3. ACCRUED EXPENSE
4. ACCRUED INCOME
101052 - OPTIONAL STEPS IN THE ACCOUNTING CYCLE (2 1. ALL TRIAL BALANCES
ITEMS) 2. REVERSING ENTRIES