Commercial Applications
Accounting cycle ends with the ……………
- Recording of transactions in journal
- Preparing income statement
- Posting entries in ledger
- Preparation of balance sheet
Answer
Preparation of balance sheet
Reason — The accounting cycle begins with recording of transactions in the journal and ends with the preparation of the Balance Sheet. The balances appearing in the Balance Sheet are then transferred to the new journal of the next year, and the cycle continues.
Related Questions
A company values its machinery at its original purchase cost minus accumulated depreciation. This valuation method is based on which of the following assumptions?
- Money Measurement Concept
- Going Concern Concept
- Realisation Principle
- Dual Aspect Principle
The Money Measurement Concept allows the recording of non-monetary transactions, such as the reputation of a company, as long as they are significant to the business.
- True
- False
Which of the following statement(s) is/are correct?
Statement 1: The Going Concern Concept assumes that a business will not cease operations in the near future.
Statement 2: The Business Entity Concept implies that the business and its owner are separate entities, and the owner's personal transactions should be recorded in the business books.
- Only Statement 1 is correct
- Only Statement 2 is correct
- Both Statements 1 and 2 are correct
- Both Statements 1 and 2 are false
Accounting principles are necessary due to which of the following reasons?
- To identify and classify economic transactions for meaningful presentation.
- To ensure uniformity in accounting records.
- These principles represent a scientific approach to financial statements.
- All of these