Question

Mabel, an accountant, discovers that an analyzed transaction has not been entered into the books. At what step in the accounting cycle is she most likely to make this discovery? A. While preparing journal entries B. While calculating trial balances C. While posting to the general ledger D. While preparing a worksheet

Answer 1

Mabel is likely to discover an unrecorded transaction when she is preparing a worksheet, as this stage in the accounting cycle involves a thorough review of accounts after journalizing and posting to the ledger.

Step-by-step explanation:

Mabel, an accountant, is most likely to discover that an analyzed transaction has not been entered into the books at the step of preparing a worksheet. This step typically follows journalizing and posting to the ledger in the accounting cycle, and it's during the worksheet preparation that accountants often perform a thorough review of accounts to prepare for the creation of financial statements. At this stage, discrepancies such as unrecorded transactions can become apparent as the accounts are analyzed for accurate reporting.

Answer 2

The correct answer is generally B.

While calculating trial balances. This step is where Mabel is most likely to discover that an analyzed transaction has not been entered into the books because it involves checking the overall balance of accounts and identifying discrepancies.

Mabel, an accountant, is most likely to discover that an analyzed transaction has not been entered into the books at different steps in the accounting cycle. Let's break down each option step by step:

A. While preparing journal entries:

1. Begin by reviewing source documents such as invoices, receipts, and bank statements to identify transactions that need to be recorded.

2. Prepare journal entries to record these transactions in the general journal.

3. While preparing these entries, Mabel may realize that a particular transaction is missing and hasn't been recorded yet.

B. While calculating trial balances:

1. After journal entries have been made, the next step is to calculate a trial balance.

2. A trial balance lists all the accounts with their respective debit and credit balances to ensure that they are in balance.

3. If a transaction was omitted during the journal entry phase, it would result in an imbalance in the trial balance, leading Mabel to discover the missing entry.

C. While posting to the general ledger:

1. Once journal entries are prepared and the trial balance is correct, the next step is to post these entries to the general ledger accounts.

2. Mabel records the debit and credit amounts in the appropriate ledger accounts.

3. If a transaction is missing, she might notice it while posting because there would be no corresponding entry in the ledger.

D. While preparing a worksheet:

1. A worksheet is typically prepared at the end of an accounting period to facilitate the creation of financial statements.

2. It includes adjustments, trial balances, and other financial data.

3. If a transaction is missing, discrepancies may arise in the worksheet, such as imbalances between the adjusted trial balance and the income statement or balance sheet sections of the worksheet.