Lecture 5 - Student 2pp

Lecture 5 - Student 2pp - Completing the Accounting Cycle...

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Completing the Accounting Cycle Chapter 4 Developed by John Wiley Ltd Adapted by Sharron O’Neill Accounting 1A | ACCT1001 Learning Objectives 9 Review the “accrual” basis of accounting 9 Review why adjusting entries are needed and identify the major types of adjusting entries 9 Explain why closing entries are needed 9 Prepare end of year closing entries 9 Prepare, and appreciate the role of, a post-closing trial balance
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Recall the Extended Accounting Cycle 1. Identify Transactions (ie recognise & analyse) 2. Record in Journal(s) 3. Post to General Ledger 4. Prepare a Trial Balance 5. Prepare end-of-period Adjusting Entries 6. Prepare an Adjusted Trial Balance 7. Prepare Financial Statements 8. Close all Temporary Accounts 9. 9. Prepare a Post Prepare a Post -Closing Trial Balance Closing Trial Balance 10. Prepare and post Reversing Entries (if used) Using Worksheets ¾ A worksheet… ¾ Is a tool which is used to help assemble all the information required to adjust the accounts and prepare interim financial statements ¾ It contains the information needed to close the revenue and expense accounts for the period and so it can also assist with the closing process ¾ A worksheet is not ¾ A substitute for journals and ledgers, ¾ Part of the financial statements
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Worksheet Preparation A worksheet involves the following steps: 1. Using the adjusted trial balance, enter all account titles and unadjusted general ledger balances in the appropriate columns (columns 1-3). 2. Enter the amounts of the end-of-period adjusting entries in the adjustments columns 3. Prepare the adjusted trial balance (col. 6-7) by adding the adjustments (col. 4&5) to the unadjusted trial balance (col.
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Lecture 5 - Student 2pp - Completing the Accounting Cycle...

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