Accounting Flow Chart

Accounting Flow - 4 Changes in Owners’ Equity • The net income from the Income Statement is part of the Changes in Owners’ Equity which in

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Business Transactions Financial transaction? NO YES Create journal entries Source Document s Record journal entries in JOURNAL S Post to JOURNAL S Post to ledger LEDGERS Prepare trial balance Trial balance A
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A Prepare adjusting entries Record adjusting journal entries JOURNAL S Prepare financia l stateme nts Financial statements 1 Prepare closing entries Record closing entries JOURNAL S
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Interconnectedness of the Financial Statements The four financial statements are 1. Balance sheet 2. Statement of cash flows 3. Income statement
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Unformatted text preview: 4. Changes in Owners’ Equity • The net income from the Income Statement is part of the Changes in Owners’ Equity which in turn is part of the Stockholders’ Equity section of the Balance Sheet • The net income is also used to compute for the cash provided by operating activities in the Statement of Cash Flows. • Some portions of the Balance Sheet, such as the current assets and liabilities, are used to compute for cash flows....
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This note was uploaded on 02/17/2012 for the course ITCO 101 taught by Professor Gugenhiem during the Spring '12 term at AIU Online.

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Accounting Flow - 4 Changes in Owners’ Equity • The net income from the Income Statement is part of the Changes in Owners’ Equity which in

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