3.1   Learning Objective 3-1


1) The process that begins with recording business transactions and includes the completion of the financial statements is the:

A) calendar year.

B) natural business years.

C) fiscal year.

D) accounting cycle.


2) The twelve-month period a business chooses for its accounting period is a(n):

A) calendar year.

B) accounting period.

C) fiscal year.

D) accounting cycle.


3) The time period for which a statement of owner’s equity is prepared is a(n):

A) calendar year.

B) accounting period.

C) fiscal period.

D) accounting cycle.


4) Financial statements that are prepared for a period shorter than a year are called:

A) accounting period statements.

B) fiscal year statements.

C) interim statements.

D) journal statements.

5) The first step of the accounting cycle is:

A) recording journal entries.

B) posting to the ledger.

C) preparing a trial balance.

D) analyzing business transactions.


6) A journal entry affecting three or more accounts is called a:

A) multi-level entry.

B) multi-step entry.

C) compound entry.

D) simple entry.


7) Business transactions are first recorded in the:

A) ledger.

B) journal.

C) trial balance.

D) balance sheet.


8) “PR” in the general journal and general ledger stands for:

A) per reviewer.

B) posting reference.

C) prior receipt.

D) None of the above are correct.

9) Revenue is traditionally recognized in the accounting records when:

A) cash is received.

B) services are rendered.

C) it is incurred.

D) None of the answers are correct.


10) The general journal:

A) is the book of original entry.

B) is the book of final entry.

C) contains account balances.

D) is completed after the general ledger.





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