《Intermediate Accounting, 9th中级会计学 Nikolai》appendix_c.pptVIP

Objectives 1. Understand the components of an accounting cycle. 2. Know the major steps in the accounting cycle. 3. Prepare journal entries in the general journal. 4. Post to the general ledger and prepare a trial balance. 5. Prepare adjusting entries. Accounting Equation Interrelated Accounting Equations Accounts Financial Statements The Income Statement—This statement summarizes the results of a company’s income-producing activities for an accounting period. The Balance Sheet—The balance sheet summarizes the amounts of a company’s assets, liabilities, and stockholders’ equity on a particular date. The Statement of Cash Flows—The SCF summarizes a company’s cash receipts and cash payments during the accounting period. The Accounting Cycle Step 1: Record daily transactions in a journal. Step 2: Post the journal entries to the accounts in the ledger. Step 3: Prepare and post adjusting entries. Step 4: Prepare the financial statements. Step 5: Prepare and post closing entries for revenue, expense, and dividend accounts. Steps 4 Procedures 1. If necessary, recompute the balance of each account in the ledger. 2. Prepare an adjusted trial balance to test that debits equal credits. 3. Prepare an income statement. 4. Prepare a statement of retained earnings. 5. Prepare a balance sheet. Typical Order of Closing Entries (1) Close temporary accounts with credit balances to Income Summary and record the ending inventory. (2) Close temporary accounts with debit balances to Income Summary and close the beginning inventory. (3) Close Income Summary to Retained Earnings. (4) Close Dividends Distributed to Retained Earnings. General Guidelines for Reversing Entries 1. Adjusting entries that establish accrued revenues or expenses to be collected or paid in the next accounting period. 2. Adjusting entries related to prepayments of costs initially recorded as expenses or receipts-in-advance initially recorded as revenues. The Worksheet Subsidiary Ledgers Special Journals Sales Jour