Prepare and post i and prepare accounting adjustments

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Prepare (and Post) I and Prepare Accounting Adjustments (and Post) Entries ,. J ) , \, ,., Joi Is 4 Prepare Financial III .-J , ~ci Close All ., , Statements from Temporary Accounts .... Trial Balance .
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Deblt Credit Module 2 I Overview of Business Activities and Financial Statements 2-22 equipment. These adjustments are made at the end of the accounting period to properly accounting records before the financial statements are prepared. Once all adjustments are 5:oancialstatements are prepared. This module describes the details of this accounting cycle. ~::e::srnll}dingthe financial statement preparation process requires an understanding of the language record business transactions in accounting records. The recording and statement preparation -=:J~ses are readily understood once we learn that language (of financial effects) and its mechanics and posting). Even if we never journalize a transaction or prepare a financial statement, .:!:I:ZS<l[J)lding the accounting process aids us in analyzing and interpreting accounting reports. -.::l:e:sl3nding the accounting language also facilitates our communication with business profes- - ithin a company and with members of the business community outside of a company. ~::lS;action Analysis section introduces our financial statement effects template, which we use throughout the - reflect the effects of transactions on financial statements. Ie reports total assets of $75,183 million, total liabilities of $27,392 million, and equity _ ", 91 million. The accounting equation for Apple follows ($ million): L 0 3 Analyze and interpret accounting adjustments and their financial statement effects. $75,183 = $27,392 + Assets = liabilities + - n draw on this relation to assess the effects of transactions and events, different account- ods, and choices that managers make in preparing financial statements. For example, we sted in knowing the effects of an asset acquisition or sale on the balance sheet, income ~I'?""""nt, and cash flow statement. Or, we might want to understand how the failure to recognize ity would understate liabilities and overstate profits and equity. To perform these sorts of m:~;,es. we employ the following financial statement effects template: \ I BalanceSheet IncomeStatement Cash + Noncash Liabil- + Contril>. + Earned ~1 Rev- Expen- '" Net 'on Asset Assets ities Capital Capital ~ enues ses Income nnnnnununnnu~nnn_nnunnnnnnnlunnu=unnnu~nununn mplate captures the transaction and its financial statement effects on the four financial state- : balance sheet, income statement, statement of stockholders' equity, and statement of cash . For the balance sheet, we differentiate between cash and noncash assets so as to identify h effects of transactions. Likewise, equity is separated into the contributed and earned capi- mponents. Finally, income statement effects are separated into revenues, expenses, and net e (the Updatingof retained earnings is denoted with an arrow line running from net income to capital). This template provides a convenient means to represent relatively complex financial ting transactions and events in a simple, concise manner for both analysis and interpretation.
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