Which of the Following Steps Is Normally First in the Accounting

question 54

Multiple Choice

Which of the following steps is normally first in the accounting cycle?

• A) Transactions are journalized.
• B) Journal accounts are posted.
• C) A trial balance is prepared.
• D) Business documents are analyzed.

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Definitions:

Coase Theorem

A principle that asserts that if private parties can bargain over the allocation of resources without cost, they can solve the problem of externalities on their own.

Externalities

Economic outcomes that impact third parties not directly involved, which can either be advantageous or disadvantageous.

Significant Costs

Expenses that are sufficiently large to impact an entity's financial decisions or financial statements.

Externalities

Economic impacts of a product or service on parties who do not directly participate in the transaction, which can be negative (pollution) or positive (vaccination benefits).