Practice: Accounting Cycle Quiz Quiz | Financial Accounting & Reporting (FAR)

Question 1

What is the primary purpose of the accounting cycle?

Answer

To calculate tax liabilities only

Answer

To systematically record transactions and prepare accurate financial statements

Answer

To audit financial statements

Answer

To prepare payroll records only

Question 2

Which step is performed first in the accounting cycle?

Answer

Analyze business transactions

Answer

Prepare financial statements

Answer

Prepare the adjusted trial balance

Answer

Record closing entries

Question 3

After recording transactions in the journal, what is the next step?

Answer

Prepare financial statements

Answer

Record adjusting entries

Answer

Post journal entries to the general ledger

Answer

Prepare the post-closing trial balance

Practice Quiz