Acct Final Exam SG 3

Acct Final Exam SG 3 - Accounting 2001 Final Exam Review...

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Accounting 2001 Final Exam Review Guide Accounting – Identifies, Records and Communicates economic events to users Cost Principle – dictates that companies record assets at their cost Proprietorship – business owned by one person Assets = Liabilities + Stockholders Equity Accrual basis accounting – Record transactions in the period in which they occur Cash based accounting – Record transactions when you receive the cash Revenue Recognizing principal – companies recognize revenue in the account period when they get it Matching Principle – expenses are matched with revenues Adjusting entries Deferrals – Prepaid expenses – rent or insurance Unearned revenues – rent or magazine subscriptions Accruals – Accrued Revenue – Revenue earned but not yet recorded Accrued Expenses - Expenses incurred but not yet paid Adjusting Entries – Examples Landry has completed 600 of the job for Eric D: Unearned Revenue600 C: Service Revenue 600 Depreciation Entries (Basic) Strait line method = Balance in account –salvage value(months) Closing Entries – Close them to Income Summary Process of closing accounts 1. Revenues D: Revenues C: Income Summary 2. Expenses D: Income Summary C: Expenses 3. Retained Earnings (too close net income to R/E) D: Income Summary C: Retained Earnings 4. Dividends D: Retained Earnings C: Dividends Accounting Cycle 1. Analyze business transactions 2. Journalize the transaction 3. Post to ledger accounts 4. Prepare a trial balance 5. Journalize and post adjusting entries 6. Prepare an adjusted trial balance
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7. Prepare financial statements: Income Statement, Retained Earnings, Balance sheet
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Acct Final Exam SG 3 - Accounting 2001 Final Exam Review...

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