Section 3 Lab Exercise Solutions

Section 3 Lab Exercise Solutions - THE ACCRUAL BASIS OF...

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THE ACCRUAL BASIS OF ACCOUNTING SOLUTION 1. Assuming the accrual basis of accounting, put the following steps in the correct order beginning with what should be done first in the accounting cycle. ___ 6 ___ Prepare a balance sheet. ___ 3 ___ Compute account balances. ___ 4 ___ Prepare an income statement. ___ 5 ___ Prepare a statement of retained earnings. ___ 1 ___ Enter transactions in chronological order in the accounting system in such a way that A = L + OE. ___ 2 ___ Enter end-of-period adjustments necessary in order to properly record revenues and expenses in the correct accounting period as well as correctly state related asset and liability balances. 2. H & H Inc. is a service oriented company which began doing business in 2013. During 2013, they had the following transactions occur: Performed services for customers totaling $300,000 out of which $240,000 was collected in cash. Incurred expenses totaling $120,000 out of which $100,000 was paid.
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This note was uploaded on 11/22/2010 for the course ACC 200 taught by Professor Buckless during the Spring '08 term at N.C. State.

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Section 3 Lab Exercise Solutions - THE ACCRUAL BASIS OF...

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