intermediate accounting A Review of the Accounting Cycle参考.ppt

A Review of the Accounting Cycle Learning Objectives Identify and explain the basic steps in the accounting process (accounting cycle). Analyze transactions and make and post journal entries. Make adjusting entries, produce financial statements, and close nominal accounts. Distinguish between accrual and cash-basis accounting. Discuss the importance and expanding role of computers to the accounting process. Double-Entry Accounting An old and universally accepted system for recording accounting data. Each transaction/ business event is recorded to maintain the equality of the basic accounting equation. Double-Entry Accounting A debit is an entry on the left side of an account. 3-Step Journal Entry Process Identify the accounts involved with an event or transaction. Summarizing Assets are increased by debits and decreased by credits. Journalizing Transactions The general journal is used to record all transactions for which a special journal is not maintained. An account is used to summarize the effects of transactions on each element of the expanded accounting equation. Preparing a Trial Balance A trial balance is a list of all accounts and their balances. It provides a means to assure that debits equal credits. Adjusting Entries Adjusting entries are required at the end of each accounting period prior to preparing the financial statements. Areas Most Commonly Requiring Analysis 1. Unrecorded assets—Assets and revenues that have been earned but not yet recorded. 2. Unrecorded liabilities—Expenses and liabilities that have been incurred but not yet recorded. 3. Prepaid expenses—Expenses that have been recorded but not yet incurred. 4. Unearned revenues—Revenues that have been recorded but not yet earned. 5. Transactions involving estimates also require analysis. 3-Step Process for Adjusting Entries Identify the original entries that were made, if any. Original entries are only made for unearned revenues and prepaid expenses. 2. Determine what the correct balan