The First Step of the Accounting Cycle Is

question 144

Multiple Choice

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.

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Definitions:

Lower of Cost

This accounting principle requires that the inventory or stock should be reported at the lower of its cost or the market value.

Market Method

An appraisal technique used to determine the value of an asset based on the current market price of comparable assets.

Replacement Cost

The cost to replace an asset with another of similar kind and quality at current prices, often considered in insurance assessment and accounting.

LIFO Liquidations

Occurs when a company using the Last-In, First-Out inventory method sells off older inventory items, potentially resulting in a lower cost of goods sold and higher profit.