ACC290-Week3-Student_Version - WEEK 3 COMPLETING THE...

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WEEK 3COMPLETING THEACCOUNTING CYCLEACC/290 - Principles of Accounting I
Learning ObjectivesPrepare closing entries, reversing entries, and apost-closing trial balance.Prepare a classified income statement, retainedearnings statement, and classified balance sheet.
Accrual Accounting ConceptsChapter 4
Summary of the Accounting Cycle1. Analyze business transactions2. Journalize the transactions6. Prepare an adjusted trialbalance7. Prepare financial statements8. Journalize and post closingentries9. Prepare a post-closing trialbalance4. Prepare a trial balance3. Post to ledger accounts5. Journalize and postadjusting entries
Week 1 ReviewJournalizing TransactionsCompanies record transactions as they occurthroughout the reporting period.This process is referred to as journalizing.Each transaction is recorded in a journal entry.Journal entries are recorded in the general journal.
Week 1 Review - JournalizingJournalizingEntering transaction data into thejournal.A complete journal entry consists of:The date of the transaction.The accounts to be debited and credited.The amounts in which the accounts will be debitedand credited.A brief explanation of the transaction.It is important to use correct and specific accounttitles in journalizing.
Week 1 Review - JournalizingDebits mustequal CreditsAccounting Equation must stay in balanceTable of possible transactionsAssets=Liabilities+Stockholder’sEquity
Summary Illustration of JournalizingIllustration 3-32
Problem P4-8BPart ASee page 216 in textbookJournalize the transactions listed in the problemSee handouts
Summary of the Accounting Cycle1. Analyze business transactions2. Journalize the transactions6. Prepare an adjusted trialbalance7. Prepare financial statements8. Journalize and post closingentries9. Prepare a post-closing trialbalance4. Prepare a trial balance3. Post to ledger accounts5. Journalize and postadjusting entries
Account NameDebit / Dr.Credit / Cr.Record of increases and decreases in aspecific asset, liability, equity, revenue,or expense item.Debit = “Left”Credit = “Right”AccountAn Account can beillustrated inaT-Accountform.Week 1 ReviewPosting to T-Accounts
Double-entryaccounting systemEach transaction must affect two or more accountsto keep the basic accounting equation in balance.Recording done by debiting at least one accountand crediting another.DEBITSmust equalCREDITS.Week 1 ReviewPosting to T-Accounts
Account NameDebit / Dr.Credit / Cr.If Debits aregreater thanCredits, the account willhave a debit balance.$10,000Transaction #2$3,000$15,0008,000Transaction #3BalanceTransaction #1Week 1 ReviewPosting to T-Accounts
Account NameDebit / Dr.Credit / Cr.If Credits aregreater thanDebits, the account willhave a credit balance.

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Term
Spring
Professor
MR
Tags
Balance Sheet, Income Statement, Revenue, Trial Balance, Generally Accepted Accounting Principles

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