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explaination for cha4 - the transaction Step 2 Record the...

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Good afternoon everyone, The on-campus class has now finished Chapter 4-Accrual Accounting Concepts and will begin Chapter 5- Merchandising Operations & Multiple Income Statement tomorrow. In chapter 4, be sure to complete all the homework assigned for chapter 4 and check your solutions in E-Reserves. The material in this chapter is more complicated and requires a good understanding of the first three chapters. Chapter 4 completes the accounting cycle by introducing several new principles-Revenue Recognition Principle, Matching Principle. Be sure you understand the Time Period assumption. Also, know the difference between cash basis accounting and accrual accounting. Read carefully and understand the various types of adjusting entries. After various examples of adjusting entries, the chapter discusses the last 4 steps in the accounting cycle. Chapter 3 introduced the following steps in the Accounting Cycle: Step 1 Analyze the economic transaction (deciding which accounts to use in recording
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Unformatted text preview: the transaction. Step 2 Record the transaction in the general journal using the proper format. Step 3 Post the transaction from the general journal into the General Ledger. Step 4 At the end of accounting period, prepare the unadjusted Trial Balance. In chapter 4 the accounting cycle is completed Step 5 Prepare the adjusting entries by recording them in the General Journal and then posting the transactions into the General Ledger. Step 6 Prepare the financial statements Step 7 Close the temporary accounts (all income statement accounts) by recording the closing entries into the General Ledger. Step 8 Prepare the Post Closing Trial Balance. The Post Closing Trial Balance will contain only the Balance Sheet Accounts (the permanent accounts). If you have any questions concerning chapter 4, please e-mail me or see me before or after class Dr. Harris...
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