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Chapter4CompletingtheAccountingCycle
ConceptualChapterObjectivesC1:ExplainwhytemporaryaccountsareclosedeachperiodC2:IdentifystepsintheaccountingcycleC3:Explainandprepareaclassifiedbalancesheet
AnalyticalChapterObjectivesA1:Computethecurrentratioanddescribewhatitrevealsaboutacompany’sfinancialcondition
ProceduralChapterObjectivesP1:PrepareaworksheetandexplainitsusefulnessP2:DescribeandprepareclosingentriesP3:Explainandprepareapost-closingtrialbalanceP4:Appendix4A:Preparereversingentriesandexplaintheirpurpose
BenefitsofaWorkSheetAidsthepreparationoffinancialstatements.Reducespossibilityoferrors.Linksaccountsandtheiradjustments.Assistsinplanningandorganizinganaudit.Helpsinpreparinginterimfinancialstatements.Showstheeffectsofproposedtransactions.Notarequiredreport.P1
FastForward
WorkSheetForMonthEndedDecember31,2007First,entertheunadjustedamountstotheworksheet.P1
Next,entertheadjustments.FastForward
WorkSheetForMonthEndedDecember31,2007P1
Prepareadjustedtrialbalance.FastForward
WorkSheetForMonthEndedDecember31,2007P1
FastForward
WorkSheetForMonthEndedDecember31,2007Sortadjustedtrialbalance
amountstofinancialstatements.P1
FastForward
WorkSheetForMonthEndedDecember31,2007Totalstatementcolumns,computeincomeorloss,andbalancecolumns.P1
?PreparetheIncomeStatement.PreparetheFinancialStatementsAworksheetdoesnotsubstituteforfinancialstatements.P1
?PreparetheStatementofOwner’sEquity.P1
?PreparetheBalanceSheet.
Resetsrevenue,expenseandwithdrawalaccountbalancestozeroattheendoftheperiod.Helpssummarizeaperiod’srevenuesandexpensesintheIncomeSummaryaccount.Identifyaccountsforclosing.Recordandpostclosingentries.Preparepost-closingtrialbalance.ClosingProcessC1
TemporaryAccountsRevenuesIncomeSummaryExpensesWithdrawalsPermanentAccountsAssetsLiabilities
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