Question

Below are the steps in the measurement process of external transactions. Rank them from first (1) to last (6) by choosing the appropriate numbers in the drop-down list.

a) Collect and analyze source documents
b) Record the transaction in the journal
c) Prepare financial statements
d) Analyze the transaction's effect on the accounting equation
e) Post the transaction to the ledger
f) Close the accounts

Answer 1

The steps in the measurement process of external transactions in accounting are, in order: collecting and analyzing source documents, analyzing the effect on the accounting equation, recording the journal entry, posting to the ledger, preparing financial statements, and closing the accounts.

Step-by-step explanation:

The question refers to the typical steps involved in the measurement process of external transactions in accounting. These steps need to be ranked from the first activity that would occur to the last in the sequence. The correct order is:

1. Collect and analyze source documents
2. Analyze the transaction's effect on the accounting equation
3. Record the transaction in the journal
4. Post the transaction to the ledger
5. Prepare financial statements
6. Close the accounts