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The lesson sketches a nine-step accounting cycle. Which step is described in the cycle as the very FIRST step that precedes all journal entries?
Answer & Solution
Correct answer: A.
1. The lesson lays out a nine-step accounting cycle.
2. The first step is analysis of business transactions to determine their nature and effect.
3. Only after this analysis are journal entries made.
4. Posting, trial balance and adjusting entries occur later in the cycle.
_Source: ICSI CS Executive Paper 5 (Corporate and Management Accounting) — Lesson 1 & 2: Introduction to Financial and Corporate Accounting, pp. v–vii and x._
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