1SOL2.0 - mutual benefit or profit for both parties...

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Valencia Community College Assignment 2.0 Solution – Battiste 2. The ending balance of cash is $116,000. It will be reported on the balance sheet. 3. There are seven steps in the accounting cycle. Accountants perform these steps each period. The ultimate goal is to gather and communicate information about business entities. 1. Enter transactions into the accounting information system and post data into the ledgers. Accountants usually must analyze source documents to complete this step. 2. Prepare an unadjusted trial balance. This step is typically done at the end of each period. 3. Enter adjustments into the accounting information system and post them to the ledgers. 4. Prepare an adjusted trial balance. 5. Enter closing entries into the accounting information system and post them to the ledger. 6. Review the ledger for errors and make any corrections. 7. Prepare financial statements. Transactions are exchanges of resources between suppliers (or venders) and customers (or consumers) done on an arm’s length (objective) basis that results in
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Unformatted text preview: mutual benefit or profit for both parties involved. The properties exchanged are goods (called inventory) or services or both. • Buying a truck on credit • Paying cash to employees • Doing a job for a customer • Building a table • The owners investing cash • The owners withdrawing cash • Collecting cash on account 6. The double entry concept is the concept that each transaction affects at least two account balances. That way the accounting system stays in balance after the event is recorded and posted. The accounting system must always be in balance. If the debits do not equal the credits there is an error somewhere that will have to be fixed before reports can be prepared. There are two purposes, or reasons, to prepare a trial balance. First, it organizes all of the end of period balances which facilitates preparing financial statements. Second, it proves that the debits equal the credits. 7. Under construction....
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This note was uploaded on 06/14/2011 for the course ACG 2021 taught by Professor Larson during the Spring '08 term at Valencia.

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