Question

In the first step of the accounting cycle, an accountant verifies the authenticity of a financial transaction by analyzing _______. The purpose of this first step is to _______.

1) classify transactions, ensure accuracy
2) record transactions, ensure completeness
3) analyze transactions, ensure authenticity
4) summarize transactions, ensure timeliness

Answer 1

The first step in the accounting cycle involves analyzing transactions to verify their authenticity, which is crucial for maintaining the trustworthiness of financial records.

Step-by-step explanation:

In the first step of the accounting cycle, an accountant verifies the authenticity of a financial transaction by analyzing transactions. This initial step involves ensuring that the transactions are genuine and reflective of actual business events. It helps in maintaining the integrity of the accounting records. The purpose of this first step is to ensure authenticity, which is critical in maintaining the trustworthiness of financial statements.

By thinking carefully about the timeline of events, understanding what happens first, what happens next, and discerning cause and effect, one can maintain the correct order in the accounting process. This systematic approach is similar to careful analysis in scientific research, where the initial steps involve the collection and analysis of data to build a solid foundation for conclusions.