ch05 - Completing the Accounting Cycle and Classifying the...

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Completing the  Accounting Cycle and  Classifying the  Accounts C H A P T E R  5
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Learning Objectives 1. Describe and prepare a worksheet and describe its usefulness. 2. Describe the closing process and explain why temporary accounts are closed each period. 3. Prepare closing entries. 4. Explain and prepare a post-closing trial balance.
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Learning Objectives 1. Describe the steps in the accounting cycle. 2. Explain and prepare a classified balance sheet. 3. Compute the current ratio and describe what it reveals about a company’s financial condition. (Appendix 5B) 4. Assignments: 1.Pr5-3A,pg243 2.Pr5-1A,pg241 3.Pr5-4A,pg244 4.Pr5-5A,pg244
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The Accounting Cycle Analyze transactions Journalize Post Prepare statements Closing Entries R.E.I.D. (4) Chapter 5 Prepare post-closing trial balance Adjusting Entries Prepare unadjusted trial balance Prepare adjusted trial balance 3 4 5 6 7 8 9 1
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The Worksheet An optional working paper that can be used to simplify the preparation of financial statements. It is: Prepared before adjusting entries are made. Not distributed to decision makers. Helpful in preventing errors. Often used by auditors.
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Account Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr Finlay Interiors Work Sheet For Month Ended January 31, 2005 Balance Sheet and Statement of Owner's Equity Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement A Blank Worksheet Steps: 1. Enter unadjusted trial balance. Step 4 2. Enter adjustments. Step 5 3. Prepare adjusted trial balance. Step 6 4. Extend adjusted trial balance columns. Step 7 5. Enter net income and balance financial statement columns. Step 7 6. Prepare financial statements. Step 7
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Account Dr Cr Dr Cr Dr Cr Cash 8,070.00 Supplies 3,600.00 Prepaid insurance 2,400.00 Furniture 6,000.00 Accumulated amortization, furniture Accounts payable 200.00 Unearned consulting revenue 3,000.00 Notes payable 6,000.00 Carol Finlay, capital 10,000.00 Carol Finlay, withdrawals 600.00 Consulting revenue 3,800.00 Rental revenue 300.00 Salaries expense 1,400.00 Rent expense 1,000.00 Utilities expense 230.00 23,300.00 23,300.00 For Month Ended January 31, 2005 Finlay Interiors Work Sheet Unadjusted Trial Balance Adjustments Adjusted Trial Balance Step 1 Prepare Unadjusted Trial Balance
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Account Dr Cr Dr Cr Dr Cr Cash 8,070 Supplies 3,600 b) 1,050.00 Prepaid insurance 2,400 a) 100.00 Furniture 6,000 Accumulated amortization, furniture c) 200.00 Accounts payable 200 Unearned consulting revenue 3,000 d) 250.00 Notes payable 6,000 Carol Finlay, capital 10,000 Carol Finlay, withdrawals 600 Consulting revenue 3,800 d) 250.00 g) 1,800.00 Rental revenue 300 Salaries expense 1,400 e) 70.00 Rent expense 1,000 Utilities expense 230 Totals 23,300 23,300 Insurance expense a) 100.00 Supplies expense b) 1,050.00 Amortization expense, furniture c) 200.00 Salaries payable e) 70.00 Interest expense f) 35.00 Interest payable f) 35.00 Accounts receivable g)1,800.00 3,505.00 3,505.00 For Month Ended January 31, 2005 Finlay Interiors Work Sheet Trial Balance Adjustments Adjusted Trial Balance Step 2 Enter Adjustments
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Dr Cr Dr Cr Dr Cr Cash 8,070 8,070.00 Supplies 3,600 b)1,050 .00 2,550.00 Prepaid insurance 2,400 a) 100 .00 2,300.00 Furniture 6,000 6,000.00 Accumulated amortization, furniture c) 200 .00 200.00 Accounts payable 200 200.00 Unearned consulting revenue 3,000 d) 250.00 2,750.00 Notes payable 6,000 6,000.00
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This note was uploaded on 08/22/2009 for the course ACCT 1101 taught by Professor Davescott during the Fall '05 term at Niagara College.

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ch05 - Completing the Accounting Cycle and Classifying the...

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