【会计学英文课件】ompletingtheAccountingCycle.ppt

Lesson 5Completing the Accounting Cycle Task Team of FUNDAMETAL ACCOUNTING School of Business, Sun Yat-sen University Outline Describe the preparation of adjusted trial balance Describe and prepare a worksheet and describe its usefulness. Describe the closing process and explain why temporary accounts are closed each period. Prepare closing entries. Accounting Cycle What We Have Done? So far we have discussed the following steps in the accounting cycle: Analyzing Recording Posting Unadjusted trial balance Adjusting Adjusted trial balance What are on the Worksheet? A worksheet includes following columns: Unadjusted trial balance. Adjusting entries Adjusted trial balance. income statement Balance sheet Worksheet can be used to simplify the preparation of financial statements. A Blank Worksheet Steps in preparation of the worksheet Steps in preparation of the worksheet Steps in preparation of the worksheet Steps in preparation of the worksheet Steps in preparation of the worksheet Preparing the Financial Statements Financial Statements can be prepared easily using the completed worksheet. The nature and the preparation of Financial Statement will be discussed in lesson 9 Closing Process The closing process occurs at the end of an accounting period after financial statements are prepared. Reasons for closing entries: Resets revenue and expense account balances to zero at the end of the period. Updates the retained earnings account to reflect net income and distributions. Temporary and Permanent Accounts Temporary accounts are also called nominal accounts. They are opened at the beginning of a period, used to record events for that period and closed at the end of the period. They accumulate data related to one accounting period only. Permanent Accounts Steps in the Closing Process Set an Income Summary account. Close Revenue accounts to Income Summary. Close Expense accounts to Income Summary. Close Income Summary account to Retained Earnings Close