Professional Documents
Culture Documents
Accounting Cycle
Slide
4-1
Summary of the Accounting Cycle
7. Prepare financial
4. Prepare a trial balance
statements
Slide
4-2
Accounting Cycle
Slide
4-3
Using A Worksheet
Worksheet
A multiple-column form used in preparing financial
statements.
Not a permanent accounting record.
Five step process.
Use of worksheet is optional.
Slide
4-4
Steps in Preparing a Worksheet
Slide
4-5
Steps in Preparing a Worksheet
1. Prepare a Trial Balance on the Worksheet
Adjusted Income
Trial Balance Adjustments Trial Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,200
Supplies 2,500
Prepaid Insurance 600
Office Equipment 5,000
Notes Payable 5,000
Accounts Payable 2,500
Unearned Revenue 1,200
Owner's Capital 10,000
Owner's Drawing 500
Service Revenue 10,000
Slide
4-6
Steps in Preparing a Worksheet
2. Enter the Adjustments in the Adjustments Columns
Adjusted Income
Trial Balance Adjustments Trial Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 15,200
Supplies 2,500 (a) 1,500
Prepaid Insurance 600 (b) 50
Office Equipment 5,000
Adjustments Key:
Notes Payable 5,000 (a) Supplies Used.
Accounts Payable 2,500
Unearned Revenue 1,200 (d) 400 (b) Insurance Expired.
Owner's Capital 10,000
(c) Depreciation Expensed.
Owner's Drawing 500
Service Revenue 10,000 (d) 400 (d) Service Revenue Earned.
(e) 200
Salaries Expense 4,000 (g) 1,200
(e) Service Revenue Accrued.
Rent Expense 900 (f) Interest Accrued.
Totals 28,700 28,700
Supplies Expense (a) 1,500 (g) Salaries Accrued.
Insurance Expense (b) 50
Accumulated Depreciation (c) 40
Depreciation Expense (c) 40
(e)
Accounts Receivable 200 Enter adjustment amounts, total
(f)
Interest Expense 50
Interest Payable (f) 50 adjustments columns,
(g)
Salaries Payable 1,200 and check for equality.
Totals 3,440 3,440
Slide
4-11
Preparing Statements from a Worksheet
Illustration 4-4
Slide
4-12
Preparing Statements from a Worksheet
Slide
4-13
Preparing Statements from a Worksheet
Slide
4-14
SO 1
Using a Worksheet
Slide
4-15
Steps in Preparing a Worksheet
Adjusting
Journal
Entries
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4-16
Closing the Books
Slide
4-17
Closing the Books
Slide
4-18
Closing the Books
Note:
Owner’s Drawing is closed
directly to Capital and not to
Income Summary because
Owner’s Capital is a
Owner’s Drawing is not an permanent account; all
other accounts are
expense. temporary accounts.
Slide
4-19
Closing the Books
Closing
Entries
Illustrated
Slide
4-20
Closing the Books
Posting
Closing
Entries
Slide
4-21
Preparing a Post-Closing Trial Balance
Purpose is to prove the equality of the permanent account
balances after journalizing and posting of closing entries.
Slide
4-22