Warren_23e__AISE_IM_Ch04 - chapter 4 Completing the...

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chapter 4 Completing the Accounting Cycle ______________________________________________ OPENING COMMENTS Chapter 4 opens with a review of the flow of accounting information. The text introduces the end-of- period spreadsheet (work sheet) as a tool for the completion of the accounting process. The text discusses the spreadsheet (work sheet) as optional, and it will be up to the individual instructor to determine if the spreadsheet will be covered in the class. The end-of-period spreadsheet (work sheet) is discussed in detail in the appendix to the chapter. The spreadsheet (work sheet) becomes the source of information used to prepare formal financial statements. The chapter continues with listing the ten steps in the accounting cycle and explains that the closing process will be explained in this chapter. Chapter 4 introduces the classified balance sheet. Chapter 4 reminds students that it is not sufficient to record adjusting entries only on the end-of-period spreadsheet. These entries must be journalized and posted to make them a part of a company’s accounting records. Next, the accounting cycle is completed by explaining closing entries and the post-closing trial balance. The chapter also discusses the fiscal year and the natural business year. After studying the chapter, your students should be able to: 1. Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements. 2. Prepare financial statements from adjusted account balances. 3. Prepare closing entries. 4. Describe the accounting cycle. 5. Illustrate the accounting cycle for one period. 6. Explain what is meant by the fiscal year and the natural business year. 49 This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher.
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50 Chapter 4 Completing the Accounting Cycle This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. STUDENT FAQS Does anyone make manual entries anymore or even keep a manual set of books? Is there a need for manual work sheets since computerized accounting packages bypass them and allow the financial reports all to be printed out after adjusting and closing entries are recorded and posted? Why do the steps to the accounting cycle have to be done in order? Why is Drawing not in the income statement? If you use an end-of-period spreadsheet (work sheet), why do you still have to prepare the financial statements? Isn’t all the information the user needs on the spreadsheet? Why is it important to classify assets and liabilities? The total assets and liabilities do not change on a
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This note was uploaded on 09/25/2010 for the course FEUI ACCT01 taught by Professor Prof.steve during the Spring '10 term at Indonesian Computer University.

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Warren_23e__AISE_IM_Ch04 - chapter 4 Completing the...

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