Accounting Cycle
To gather information about transactions or events generally through the source documents.
Identification of Events to be Recorded
is a list of all accounts with their respective debit or credit balances.
TRIAL BALANCE (Step 4)
Notes, comprising a summary of significant _______ ________ and other explanatory information
accounting policies
Who bought a company providing advisory services to large corporations, renaming it Strategic Weather Services (SWS) Inc?
Frederic Fox
To simplify the recording of certain regular transactions in the next accounting period.
Reversing Journal Entries are Journalized and Posted
Indicate the accounts-either assets, liabilities, equity, income or expenses- affected by the transaction.
TRANSACTION ANALYSIS (Step 1)
A statement of _____ flows for the period
cash
crucial for analyzing transactions and events' impact on performance and financial position.
Source Documents
To provide useful information to decision-makers.
Preparation of the Financial Statements
After the transaction or event has been identified and measured, it is recorded in the journal.
Transactions are Journalized (Step 2)
A statement of changes in ______ for the period
equity
The year and month are not rewritten for every entry unless the year or month changes or a new page is needed.
Date
To check the equality of debits and credits after the closing entries.
Preparation of a Post-Closing Trial Balance
means transferring the amounts from the journal to the appropriate accounts in the ledger.
POSTING (Step 3)
A statement of comprehensive __________ for the period
income
is a ledger listing all accounts and their numbers, arranged in financial statement order, that is, assets, liabilities, owner's equity, income and expenses.
Chart of Accounts
is repeated each accounting period, with the first three steps completed during the period, the fourth to ninth steps usually occurring at the end, and the last optional step occurring at the beginning of the next period.
Accounting Cycle
It contains most necessary data for income, statement of equity, and balance sheet.
PREPARING THE FINANCIAL STATEMENTS (Step 6)
A statement of ______ _______ as at the beginning of the earliest comparative period when an entity applies an accounting policy retrospectively.
financial position
is a financial report that shows what a company owns (assets), what it owes (liabilities), and the value left for the owners (equity) at a specific point in time.
Statement of Financial
Position (Balance Sheet)