LU5 + LU6 - LU6: Adjustments and the accounting cycle - page 22-23 (Realization and Matching principles), , pages 133-135 (excluding “Tower Restaurant”) and pages 139-151 (from “Computerized Posting”) Review Exhibit A-5, page
4 important questions on LU5 + LU6 - LU6: Adjustments and the accounting cycle - page 22-23 (Realization and Matching principles), , pages 133-135 (excluding “Tower Restaurant”) and pages 139-151 (from “Computerized Posting”) Review Exhibit A-5, page
Know the Accounting Cycle. What is the right order?
- Business transaction
- Analyze transactions
- Post transactions
- Trial balance
- Prepare Adjustments
- Journalize adjustments
- Post Adjusting entries
- (Post-adjustment Trial balance)
- Financial statements
- if EOY: Closing entries
- Post-closing trail balance
Starts again...
Accrual Basis Accounting
- Recording transactions when revenue is earned and expenses are incurred
- Used by most businesses
- GAAP complaint
What is the process of Posting?
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Trail balance, what is it and what is the order?
- The Debit side of General Ledger should be equal to the Credit side
- Lists all accounts with their new account balance
- Order:
- Asset
- Liabilities
- Owner's Equity
- Revenue/ Income
- Expenses
The question on the page originate from the summary of the following study material:
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