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Level One: Remember
The steps in the accounting cycle are listed below in alphabetic order. In the spaces provided, number
them according to their correct sequence.
___ Analyze transactions.
___ Close the temporary accounts to retained earnings.
___ Obtain information about external transactions from source documents.
___ Post from the journal to the general ledger accounts.
___ Prepare a post-closing trial balance.
___ Prepare an adjusted trial balance.
___ Prepare an unadjusted trial balance.
___ Prepare financial statements.
___ Record adjusting entries and post to the general ledger accounts.
___ Record the transactions in a journal.
Level Two: Understand
Consider the following descriptions of various steps in the accounting cycle. For each description,
indicate the relevant step number based on the listing in the chapter. The first item is provided as an
example.
5 Verify, for the first time, the equality of debits and credits in the ledger.
___ Account for timing differences between cash flow and accrual basis measurements.
___ Determine the appropriate journal entry (if any) for the event.
___ Extract, from the accounting information system, the balance sheet and related documents.
___ Prepare the accounting information system for a new fiscal period.
___ Reorganize the data in the accounting information system from chronological to account-based.
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