ADM 2342 Chapter Notes - Chapter 3: Deferral, General Ledger, Accrued Interest

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There are 7 steps in the accounting cycle: identification and measurement of transactions and other events, journalizing. The general ledger collects all of the asset, liability, shareholders" equity, revenue, and expense accounts. The general journal is a chronological listing of transactions and other events that expresses the transactions and events as debits and credits to particular accounts. Special journals summarize transactions that have a common characteristic (ex. Cash receipts, sales, purchases, and cash payments: posting. Subsidiary ledgers (usually daily: trial balance preparation. List of general ledger accounts and their balances at a specific time. To prove the mathematical equality of debits and credits after posting. To prepare a trial balance, an entity: (1) lists the account titles and their balances, (2) totals the debit and credit columns, (3) proves the equality of the two columns, adjustments. Adjustments are needed to ensure that the revenue recognition principle is followed and that proper matching occurs.

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