The Five Steps in the Accounting Cycle Are Listed as Follows

question 80

Multiple Choice

The five steps in the accounting cycle are listed as follows:
1) Close the accounts.
2) Post transactions to accounts in the ledger.
3) Journalize daily transactions.
4) Record and post adjustments.
5) Prepare financial statements.What is the correct order of these steps?

• A) 2, 3, 4, 5, 1
• B) 3, 2, 4, 5, 1
• C) 3, 2, 4, 1, 5
• D) 3, 2, 5, 4, 1

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Definitions:

Overhead Cost

Expenses related to the operation of a business that cannot be directly tied to a specific product or service.

Activity-Based Costing

A costing methodology that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Overhead Cost

Expenses not directly tied to production but necessary for running the business, such as rent, utilities, and salaries for administrative staff.

Activity-Based Costing

An accounting method that apportions overhead and incidental costs to the respective products and services based on the specific activities involved.