Spr10-CH 2_1 - ReviewoftheAccounting Process...

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Review of the Accounting  Process Spiceland – Chapter 2
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The Accounting Equation A  =   L  +  OE - Owner Withdrawals + Owner Investments - Expenses - Losses + Revenue + Gains
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                                Balance Sheet         Balance Sheet                         Income Statement Income Statement = + = - Asset Liability Equity Revenu e Expens e Debit Credit Debits and Credits Summary
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Journal Entries Permanent and temporary accounts. Debit/credit rules. “Normal balance?” REMEMBER:  EVERYTHING MUST BALANCE  IN A JOURNAL ENTRY!! Think through what is economically going on in the transaction. It’s not all  about memorization.
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Source  documents Record in  Journal Financial  Statements Transaction  Analysis Post to  Ledger Unadjusted  Trial Balance Adjusting  Entries Adjusted  Trial Balance Close Temporary  Accounts Post-Closing  Trial Balance During the Accounting Period At the End of the Accounting Period At the End  of the Year
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Adjusting Entries These are entries made  at the end   of an  accounting period. Non-cash  journal entries. Prepaid expenses – expenses paid in cash and recorded as  assets before they are used or consumed. Unearned revenues – revenues received in cash and 
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Spr10-CH 2_1 - ReviewoftheAccounting Process...

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