Accounting Notes Ch.4

Accounting Notes Ch.4 - subtotal in the credit column to...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting Notes Chapter 4 List all the steps in the accounting cycle - Collect business information from business documents - Analyze and journalize transactions - Post transactions to ledgers - Prepare an unadjusted trial balance - Prepare a work sheet - Prepare financial statements - Journalize and post adjusting entries - Journalize and post closing entries - Prepare post closing trial balance Explain the purpose of closing entries - They close the temporary or nominal accounts to zero balances so that they are ready to accumulate information in the new accounting period. - They transfer the net income or net loss for the current accounting period to the retained earnings account and close the dividends account to retained earnings account. Record closing entries from the worksheet - Debit each account in the income statement credit column, and credit their sum (the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: subtotal in the credit column) to the Income Summary account-Credit each account in the income statement debit column, and debit their sum (the subtotal in the debit column) to the Income Summary account.-Transfer the balance of Income Summary to the retained earnings account.-Close the balance of the dividends account to the retained earnings account. Explain the purpose of a post closing trial balance and prepare one-We prepare the post closing trial balance after posting the closing entries. -It contains only real or permanent accounts.-The post closing trial balance tests the debit and credit equality of the general ledger before the next accounting period. Analyze financial statement information for real-life companies...
View Full Document

This note was uploaded on 04/07/2008 for the course ENGL 111 taught by Professor Matt during the Spring '08 term at UConn.

Ask a homework question - tutors are online