ACC120 Lecture Notes - Lecture 4: Trial Balance, Accounting Information System, Retained Earnings
Document Summary
Correcting entries an avoidable step: correcting entries correct errors that have occurred in the recording process. Unnecessary if the records are free of errors. Can be journalized and posted whenever an error is. Must be done before closing entries are prepared and posted discovered. Learning objectives and the preparation of correcting entries. Classified balance sheet: financial statements are more useful when similar assets and, a classified balance sheet generally has the following standard liabilities are grouped together classifications: Cash, short-term investments, receivables, inventory, supplies, prepaid expenses. Operating cycle: the length of it takes from starting with cash to ending with cash, usually less than one year, but for some businesses it may be in producing revenues longer than one year. Long-term investments many years: investments in debt or equity that are expected to be held for, not readily marketable or expected to be converted into cash, examples: within one year.
