MGAB01H3 Chapter : Summary of the Accounting Cycle

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27 Oct 2010

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MGAB01H3 Full Course Notes

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A reversing entry is made at the beginning of the next accounting period. It is the exact opposite of the adjusting entry made in the previous period. The preparation of reversing entries is an optional bookkeeping procedure that is not a required step in the accounting cycle. Entries to correct errors made in recording transactions. Adjustments are journalized and posted only at the end of an accounting period. In contrast, correcting entries are made whenever an error is discovered. Dr service revenue , cr accounts receivable - . Instead of a correcting entry, many simple reverse the incorrect entry and then record the correct entry. Dr cash - , cr service revenue - . Cr service revenue - , dr cash - . Dr cash - , cr accounts receivable - . Financial statements are more useful to management, creditors, and potential investors when the elements are classified into significant subgroups.

Related Questions

PSA 4-4

WRD 26_PR04-4A.xlsx(341.17KB)

This is theQuestion I need the solution to. This is the followinginformation.

a. Supplieson hand at March 31 are $7,500.

b. Insurancepremiums expired during year are $1,800.

c.Depreciation of equipment during year is $8,350.

d.Depreciation of trucks during year is $6,200.

e. Wagesaccrued but not paid at March 31 are $600.

Instructions

1. For each account listed in thetrial balance, enter the balance in the appropriate Balance columnof a four column account and place a check mark in the postingreference column.

3. Journalize and post theadjusting entries, inserting balances in the accounts effected.Record the adjusting entries on Page 26 of the journal. Thefollowing additional accounts from Lakota Freight Co.'s chart ofaccounts should be used: Wages payable, 22; Supplies Expense, 52;Depreciation Expense--Equipment, 55; Depreciation Expense--Trucks,56; Insurance Expense, 57.

4. Prepare and adjusted trialbalance.

5. Prepare an income statement, astatement of owner's equity, and a balance sheet.

6. Journalize and post the closingentries. Record the closing entries on page 27 of the journal.Indicated closed accounts by inserting a line in both balancecolumns opposite the closing entry.

7. Prepare a post-closing trialbalance.

bronzegrasshopper42

Closing entries are dated in the journal as of:

a. the date they are actually journalized, although they are generally prepared after the end of the accounting period.

b. the last day of the accounting period, although they are actually journalized after the end of the accounting period.

c. the first day of the accounting period, although they are actually journalized after the end of the accounting period.

d. the first day of the subsequent accounting period.

rubyelk478

The general ledger of the Karlin Company, aconsulting company, at January 1, 2013, contained the following account balances:

Account Title	Debits	Credits
Cash	30,000
Accounts receivable	15,000
Equipment	20,000
Accumulated depreciation		6,000
Salaries payable		9,000
Common stock		40,500
Retained earnings		9,500

Total	65,000	65,000

The following is a summary of the transactions for theyear:

a.	Sales of services, $100,000, of which $30,000was on credit.
b.	Collected on accounts receivable, $27,300.
c.	Issued shares of common stock in exchange for$10,000 in cash.
d.	Paid salaries, $50,000 (of which $9,000 wasfor salaries payable).
e.	Paid miscellaneous expenses, $24,000.
f.	Purchased equipment for $15,000 in cash.
g.	Paid $2,500 in cash dividends to shareholders.

1.	Accrued salaries at year-end amounted to$1,000.
2.	Depreciation for the year on the equipment is$2,000.

Required:

1.	Prepare a general journal entry for each ofthe summary transactions listed above.

2.	Prepare the adjusting journal entries.

	3.	Prepare the closing entries.

4.	Post the opening balances, transactions,adjusting and closing entries into the appropriatet-accounts.

5.	Prepare an unadjusted trial balance.

6.	Prepare an adjusted trial balance.

7.	Prepare an income statement for 2013.

Prepare a balance sheet as of December 31,2013.

Prepare a post-closing trial balance.

MGAB01H3 Chapter : Summary of the Accounting Cycle

MGAB01H3 Full Course Notes

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