ACFAR IFA TOPIC 6 & 7 (IDENTIFICATION) QUESTIONS WITH CORRECT ANSWERS

It is used to close the income and expense accounts including the withdrawals. Correct Answer Income Summary. 1. It list down the assets on the left and the liabilities and owner's equity on the right. Correct Answer Account Form The trial balance debit or credit amount of each account is combined with the amount of any debit or credit adjustment to that account to determine the new balance of account. This process is known as ___. Correct Answer Cross Footing A bookkeeping technique made to simplify the recording of regular transactions in the next accounting period. Correct Answer Reversing Entry It refers to the availability of cash in the near future after taking account of the financial commitments over this period. Correct Answer Liquidity What is the correct order of the closing entries? Correct Answer Income, Expenses, Income Summary and Withdrawals Which type of balances is the basis of the preparation of the financial statements? Correct Answer adjusted trial balances Which adjusting entries are reversed? * Correct Answer Accrued expense, deferred income (income method) accrued income, deferred expense (expense method