The Usual Sequence of Steps in the Transaction Recording Process

question 49

Multiple Choice

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate years.

Transactions

Events that are recognized in the financial records, affecting the financial position and performance of a company.

Accrual Basis

An accounting method where transactions are recorded when they are earned or incurred, regardless of when cash is exchanged.

Cash Basis

An accounting method where revenues and expenses are recorded only when cash is received or paid out.