ACC 2301 OddFalls
Odd Falls Trading Company
A Practice Problem
University of Houston - Downtown
Profits on the sale of this practice set will be deposited in the
Accounting Excellence Fund to benefit accounting and business students
This short practice problem gives you, the student, an opportunity to practice the accounting
concepts and skills acquired in an introductory financial accounting course.
The objective of the
practice problem is to have you complete a comprehensive example of the accounting cycle.
You will evaluate transactions, use the general journal to record events, adjust the accounts,
close the temporary accounts, maintain an ongoing general ledger, prepare a worksheet and
prepare financial statements.
In following the instructions for the Practice Problem, keep in mind that an accountant prepares accounting
records in a neat fashion and in proper format.
If you prepare this practice set by hand, using a pencil for the
accounting work gives you a better opportunity to maintain neat records.
The Odd Falls Trading Company, a sole proprietorship owned by Max Gator, began operations at
the beginning of the month in SmallTown, Texas.
Odd Falls sells items such as small office
machines, office supplies, magazines, make-up, hair products, etc. and is located in a new
Odd Falls sells on account to some customers and on a cash basis to other
Odd Falls has retained you to install the company’s manual accounting system, to implement
the system, to maintain the company’s accounting records, and to produce monthly financial
The accounting system for accounting records and financial statements includes
the general journal, general ledger accounts, the worksheet, the Multiple-Step Income
Statement, the Statement of Owner’s Equity, and the classified Balance Sheet.
Additionally, Odd Falls has asked you to prepare the unadjusted trial balance, the
adjusted trial balance, and the post-closing trial balance.
Odd Falls Trading Company specifies these accounting method choices:
2 -- special journals or subsidiary ledger accounts are not yet needed;
7 -- take a full month of depreciation for assets purchased in the first half of the month;
8 -- take a half-month of depreciation for assets purchased in the second half of the month.
As the accountant for Odd Falls Trading Company, you must
1 -- Record the transactions for the month in the general journal.
2 -- Post the general journal entries to the general ledger accounts and
also provide the proper referencing and running totals.
3 -- Prepare the trial balance, based on the ledger balances, before adjusting entries are made.
4 -- Prepare the worksheet.