Recording of Economic Events Involves

question 101

Multiple Choice

Recording of economic events involves

• A) keeping a systematic, chronological diary of events.
• B) analyzing reported information.
• C) explaining the meaning of reported data.
• D) preparing accounting reports.

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Definitions:

Services Performed

Tasks or activities completed by a business in exchange for payment, often recognized as revenue according to the revenue recognition principle.

Post-closing Trial Balance

A list of all accounts and their balances after the closing entries are made, used to check the accuracy of closing entries and prepare for the next accounting period.

Retained Earnings

The cumulative amount of net income earned by a company that is retained and not distributed to shareholders as dividends.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts.