Multiple Choice
Detailed information about the accounting equation is maintained in records commonly called:
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1. Introduction to Accounting
Fundamental Accounting Equation
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Of the following steps of the accounting cycle, which step should be completed first?
A
Prepare the trial balance
B
Post entries to the ledger accounts
C
Analyze transactions and events
D
Prepare financial statements
Verified step by step guidance1
Step 1: Understand the accounting cycle, which is a series of steps followed to record, classify, summarize, and report financial transactions.
Step 2: Recognize that the first step in the accounting cycle is to analyze transactions and events. This involves identifying and understanding the financial impact of each transaction or event on the business.
Step 3: After analyzing transactions, the next step is to record them in the journal using the double-entry system, ensuring that debits equal credits.
Step 4: Once journal entries are recorded, they are posted to the ledger accounts to organize and summarize the financial data.
Step 5: After posting to the ledger, a trial balance is prepared to ensure that total debits equal total credits, followed by the preparation of financial statements to report the financial position and performance of the business.
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