Which of the Following Statements Is Characteristic of the Accounting

question 186

Multiple Choice

Which of the following statements is characteristic of the accounting cycle?

• A) An entry in a general ledger account can be traced to the trial balance by referring to the page listed in the posting reference column of that ledger account.
• B) The posting of an amount recorded in the general ledger can be verified by referring to the account number listed in the posting reference column on that line in the general journal.
• C) Business transactions are recorded first in the general ledger; then that information is transferred to the general journal.
• D) No explanation is needed for each entry in the general ledger.

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Definitions:

Expected Cash Flows

The projected amount of cash that is anticipated to be generated or expended over a certain period in the future.

Present Value

The contemporary valuation of future monetary sums or cash flow chains, determined by a designated rate of return.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Time Value

The principle that having money now is more valuable than the same sum in the future because of its ability to earn more over time.