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b. Each month USD 2,000 would be transferred from the liability account (debit), UnearnedSubscription Fees, to a revenue account (credit).b.An asset, Interest Receivable, is debited, and Interest Revenue is credited.a.The debit would be to Salaries Expense, and the credit would be to Salaries Payable.
This book is licensed under a Creative Commons Attribution 3.0 License4.Completing the accounting cycleLearning objectivesAfter studying this chapter, you should be able to:•Summarize the steps in the accounting cycle.•Prepare a work sheet for a service company.•Prepare an income statement, statement of retained earnings, and balance sheet using information contained in the work sheet.•Prepare adjusting and closing entries using information contained in the work sheet.•Prepare a post-closing trial balance.•Describe the evolution of accounting systems.•Prepare a classified balance sheet.•Analyze and use the financial results—the current ratio.A career in information systemsHave you ever heard the sayings "knowledge is power" or "information is money"? When peopletalk about accounting, what they are really talking about is information. The information used bybusinesses, as well as the technology that supports that information, represents some of the mostvaluable assets for organizations around the world. Very often, the success of a business dependson effective creation, management, and use of information.As companies become ever more reliant on technology, the need for well-educated ManagementInformation Systems (MIS) auditors and control professionals increases. Improved technology hasthe potential to dramatically improve business organizations and practices, reduce costs and exploitnew business and investment opportunities. At the same time, companies face constant challengesin selecting and implementing these new technologies. Because of their high value and inherentcomplexity, the development, support, and auditing of information systems has become one of thefastest growing specialties in accounting.Graduates with special interests and skills in computing and technology have expansiveopportunities. In addition to traditional accounting and auditing functions, MIS professionalsperform evaluations of technologies and communications protocols involving electronic datainterchange, client servers, local and wide area networks, data communications,telecommunications, and integrated voice/data/video systems. In public accounting, technology hasimpacted the auditing profession by extending the knowledge required to draw conclusions and theskills required to audit advanced accounting and information systems.With management consulting practices growing and information systems becoming a largerpercentage of public accounting revenue, MIS professionals are in high demand. If you areconsidering a degree in computer or information systems, you should consider the advantages thatan accounting major or minor can give you in working closely with businesses and consulting firms.