The Accounting Cycle Is a Series of Steps That Process

question 120

Multiple Choice

The accounting cycle is a series of steps that process the accounting information contained in its transactions, events, and arrangements. What are the steps involved in this task?

• A) Record, organize, close, report
• B) Organize, record, report, analyze
• C) Record, organize, summarize, report
• D) Analyze, prepare, record, report

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Definitions:

GAAP

General Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction, including the detailed standards and rules developed by the Financial Accounting Standards Board in the U.S.

Compensation Expense

The total cost that a company recognizes for paying its employees, including wages, salaries, and bonuses.

Diluted Earnings

An earnings calculation that accounts for all potential shares that could be issued, showing the lowest possible earnings per share.

Preferred Stock

A type of stock that provides a specific dividend that is paid before any dividends are paid to common stockholders, and that typically does not have voting rights.