Question

_______ is the first phase of accounting cycle.

• A. Identifying an event or transaction
• B. Taking rational decision
• C. Designing Accounting system
• D. Preparing charter of accounts

Answer 1

The correct option is A Identifying an event or transaction

Accounting cycle starts only when there is an event or transaction of monetary value. If a transaction is completed, its considered an event to record the same in business books. Non economic transaction should not be considered as an event. Hence, no recording is done.