chapter 4 quiz study guide accounting cycle

2 close is account to the owners equity account 3

This preview shows page 2 - 5 out of 6 pages.

§ 2) Close I.S. account to the Owner’s Equity account. § 3) Close owner’s drawing accounts to the Owner’s Equity account. o Post-Closing Trial Balance § Account balances are listed in debit and credit columns then totaled to ensure debits equal the credits. § This is a test of equality and a check of the accuracy of the closing process. § Basically it’s more tedium. The Worksheet (Use the following diagram to reference the notes in “The Worksheet” section)
Image of page 2

Subscribe to view the full document.

3
Image of page 3
4 Worksheet – a columnar sheet of paper on which accountants list the general ledger accounts before making adjustments and preparing the income statement and balance sheet. - It is merely a tool for accounts to use, and is not part of the formal accounting records. Helps accountants accomplish the following: 1) Prepare the trial balance 2) Adjust accounts without immediately having to post adjustments to the ledger accounts. 3) Prepare the adjusted trial balance 4) Separate adjusted account balances into columns for preparing the income statement and balance sheet 5) Determine the net income or loss for the accounting period. (refer to diagram for the following) Columns 1: Lists the Mason Motel’s accounts. Taken from general ledger accounts and adjustments. Columns 2 & 3: Shows trial balance that is prepared before making any adjustments. Total of debits(column 2) must equal total of credits(column 3). Columns 4 & 5: Listing of adjustments. Each entry has a debit and a credit. Total of debits(column 4) must equal total of credits(column 5). Columns 6 & 7: Show the adjusted trial balance. In other words, the new trial balance after adjustments have been applied. Total of debits(column 6) must equal total of credits(column 7). Columns 8 & 9: Include only the revenue and expense accounts(as shown in the diagram).
Image of page 4

Subscribe to view the full document.

Image of page 5