Accountıng I

Yanıt Açıklaması: Accounting cycle can be defined as the process by which companies produce their financial statements for a specific period of time.

Yanıt Açıklaması: The change in equity is determined by the difference between revenue and expense. According to the information given in the question, since the revenue is more than the expense, there is an increase of 175.000 TL. Therefore, the correct answer to the question is option C.

Yanıt Açıklaması: The straight-line method allocates an equal amount of depreciation for each period.

Yanıt Açıklaması: The first step of the accounting process consists of identifying the financial transactions related with the organization. The sale of a table by a furniture shop, the payment of wages or the provisions for services are the examples of financial transactions. Once these kinds of financial transactions are realized and identified in Turkish Liras or in another currency, these events are recorded to provide the history of financial activities of the organization. Recording is a systematic way of keeping chronological diary of events measured in monetary unit. At the last step, company communicates the summarized information obtained from the records to decision makers (information users) by using standardized reports which are called financial statements. E is the right answer

Yanıt Açıklaması: In accrued revenue, revenue is recognized before the cash is received. The correct answer is E.

Yanıt Açıklaması: Entering an amount on the left side of an account is called debiting.

Yanıt Açıklaması: Current assets include the assets that will be converted into cash, sold, consumed or received Statement of owner’s equity reports the changes in the capital throughout the period caused by the owner’s capital investments or withdrawals, net profit or loss. Balance sheet reports the assets, liabilities and the owner’s equity in a specific date. Revenues and expenses are reported in the income statement; assets, liabilities and owner’s equity are reported in the balance sheet. This company has raw material to be consumed within 10 months.

Yanıt Açıklaması: Accounting periods may be monthly, quarterly, semiannually or yearly. The correct answer is A.

Yanıt Açıklaması: A debit entry to an account increases assets. A credit entry to an account increases liabilities and owner's equity.

Yanıt Açıklaması: The journalizing and posting process has five steps: Step 1: Identify the accounts and the account types (asset, liability, or equity). Step 2: Decide whether each account increases or decreases and then apply the rules of debits and credits. Step 3: Record the transaction in the journal. Step 4: Post the journal entry to the ledger. Step 5: Determine whether the accounting equation is in balance

Yanıt Açıklaması: Bookkeeping is an activity or occupation of keeping records of the financial transactions.The accounting process includes the bookkeeping.

Yanıt Açıklaması: Assets, distributions, and expenses increase by debiting (on left side) and normally show debit balance.

Yanıt Açıklaması: Current assets include the assets that will be converted into cash, sold, consumed or received within 12 months or within the business’s operating cycle, and the cash and cash equivalents.

Yanıt Açıklaması: Who uses accounting numbers? To answer that question, the accountant must be clear for whom the information is being prepared and for what purpose the information will be used. There are likely to be various information users such as owners, managers, creditors, suppliers etc. You should understand the needs of users because information users focus on different financial information according to their relevant decision making issues. The best way of explaining the needs on financial information is to make a classification of potential users. Two main groups of information users are internal users and external users. We can also classify accounting as Managerial Accounting and Financial Accounting according to this classification of information users. C is the right answer.

Yanıt Açıklaması: If the revenue exceeds expenses , then profit occurs. In this example, the revenue exceeds the expense by 10.000 liras, which means that the company has a profit of 10,000 liras. If expenses exceed revenues, then loss occurs. The balance of the Income Summary account, the 10,000 lira profit- is transferred to Capital account.

Yanıt Açıklaması: At the end of each month, monthly trial balance is prepared in order to ensure that the totals and the balances of the accounts are equal.

Yanıt Açıklaması: A trial balance is an internal document used only by company insiders. Outsiders see only the company’s financial statements, not the trial balance.

Yanıt Açıklaması: Expense is the cost of assets consumed or services used during the revenue earning process.

Yanıt Açıklaması: Accounting is an information system consisting of identification, recording and communication functions. The functions of accounting are fully expressed in D.

Yanıt Açıklaması: Measurement refers to the valuation (determination of the monetary amount subject to recording) of assets and liabilities in accounting process. The correct answer is D.