AppendixC - 1 Appendix C Review of the Review Accounting...

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1 Review of the Review of the Accounting Accounting Process Process A A ppendix ppendix C C
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2 1. Understand the components of an accounting cycle. 2. Know the major steps in the accounting cycle. 3. Prepare journal entries in the general journal. 4. Post to the general ledger and prepare a trial balance. 5. Prepare adjusting entries. Objectives Continued Continued
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3 6. Prepare financial statements. 7. Prepare closing entries. 8. Complete a worksheet. 9 . Understand subsidiary ledgers. 10. Use special journals. 11. Convert cash-basis financial statements to accrual-basis. Objectives
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4 Accounting Equation Assets Assets
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5 Accounting Equation = Liabilities = Liabilities Debt Summary
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6 Accounting Equation + Stockholders’ Equity + Stockholders’ Equity Net Worth
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7 Interrelated Accounting Equations Assets = Liabilities + Stockholders’ Equity Stockholders’ Equity = Contributed Capital + Retained Earnings Retained Earnings = Beginning Retained Earnings + Net Income – Dividends Net Income = Revenues – Expenses
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8 Accounts Title Account title.
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9 Accounts Title
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10 Title Accounts Debit “Debit” refers to the left side.
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11 Accounts Title Debit Credit Credit refers to the right side.
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12 Accounts In the double-entry system, for each transaction that a company records, the total dollar amount of the debits must equal the total dollar amount of the credits.
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13 Accounts Permanent Accounts Assets = Liabilities + Stockholders’ Equity Asset Accounts (debit) (credit) Increase Decrease Liability Accounts (debit) (credit) Decrease Increase Capital Stock Accounts (debit) (credit) Decrease Increase Retained Earnings . (debit) (credit) Decrease Increase
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14 Accounts Temporary Accounts Revenue Accounts (debit) (credit) Decrease Increase Expense Accounts (debit) (credit) Increase Decrease Retained Earnings . (debit) (credit) Decrease Increase Dividend Accounts (debit) (credit) Increase Decrease
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15 Financial Statements The Income Statement This statement summarizes the results of a company’s income- producing activities for an accounting period. The Balance Sheet —The balance sheet summarizes the amounts of a company’s assets, liabilities, and stockholders’ equity on a particular date. The Statement of Cash Flows The SCF summarizes a company’s cash receipts and cash payments during the accounting period.
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16 The Accounting Cycle Step 1: Record daily transactions in a journal. Step 2: Post the journal entries to the accounts in the ledger. Step 3: Prepare and post adjusting entries. Step 4: Prepare the financial statements. Step 5: Prepare and post closing entries for revenue, expense, and dividend accounts.
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17 Comprehensive Comprehensive Illustration for Dapple Illustration for Dapple Corporation Corporation Step 1: Recording in Step 1: Recording in the General Journal the General Journal
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18 GENERAL JOURNAL On January 1, 2004 various stockholders On January 1, 2004 various stockholders invest in Dapple by purchasing 2,000 invest in Dapple by purchasing 2,000 shares of no-par stock at $10 per share.
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This note was uploaded on 02/18/2011 for the course ECON 101 taught by Professor Unknown during the Spring '10 term at University of Toronto- Toronto.

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AppendixC - 1 Appendix C Review of the Review Accounting...

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