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Appendix A: Comprehensive Review Problem

Appendix A: Comprehensive Review Problem. Appendix A provides a comprehensive review problem. Students perform each step of the accounting cycle using GAAP. Prepare a trial balance to summarize transactions during a year.

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Appendix A: Comprehensive Review Problem

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  1. Appendix A:Comprehensive Review Problem

  2. Appendix A provides a comprehensive review problem. Students perform each step of the accounting cycle using GAAP.

  3. Prepare a trial balanceto summarize transactions during a year. • Prepare an adjusted trial balanceto reflect period or year end adjustments (AJEs). • Prepare financial statements • Income statement • Balance sheet • Statement of cash flows (SCF). • Statement of stockholders’ equity

  4. Trial Balance Atrial balanceis a list of all accounts and their balances, based on the debit (left) and credit (right) schema: Assets == Liabilities + Owners’ Equity plus revenues less expenses

  5. Adjusted Trial Balance • Period and year end adjustments are necessary to bring the books up to date. • An adjusted trial balance is a list of all accounts and their balances after adjustments. • Financial statements are prepared from adjusted trial balance amounts, using meaningfulsequencing, titles and subtotals, etc. It’s an art!

  6. Financial Statements Prepared From Adjusted Trial Balance • Income Statement • Balance Sheet • Statement of Stockholders’ Equity • Statement of Cash Flows (SCF) • Statement of Comprehensive Income (optional)

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