Lecture 6 - Accounting Cycle Flashcards
1
Q
Accounting cycle
A
sequence of acct procedures used each period to record transactions and events and to prepare financial statements
2
Q
Major Steps
A
Transaction occurs/source docs journal entry post (T-accounts) Unadjusted trial balance adjusting entries adjusted trial balance I/S Close accounts other financial statements
3
Q
format of financial statements (heading)
A
Company name
name of financial statement
date
4
Q
what happens to I/S accounts at end of period?
A
they are closed back into the retained earnings
5
Q
Increases in RE =
A
revenues and gains
6
Q
Decreases in RE =
A
expenses and losses
7
Q
Close revenues
A
Debit Revenues
Credit RE
8
Q
Close expenses
A
Debit RE
Credit expenses
9
Q
I/S
A
Sales Rev
COGS
(other expenses)
= NI
10
Q
Statement of RE
A
BB RE
NI
Dividends
= EB RE