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Completing the Accounting Cycle

Completing the Accounting Cycle. COACHING CLASSES OF CA MODULE B & D. FA, ECONOMICS & COST ACCOUNTING. CONTACT NOW. 0322-3385752. JOIN KHALID AZIZ. MA ECONOMICS EXTERNAL COACHING CLASSES. MICRO ECONOMICS, STATISTICS & MACRO ECONOMICS. GUESS PAPERS AND NOTES ARE AVAILABLE 0322-3385752.

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Completing the Accounting Cycle

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  1. Completing the Accounting Cycle

  2. COACHING CLASSES OF CA MODULE B & D. FA, ECONOMICS & COST ACCOUNTING. CONTACT NOW. 0322-3385752 JOIN KHALID AZIZ

  3. MA ECONOMICS EXTERNAL COACHING CLASSES. MICRO ECONOMICS, STATISTICS & MACRO ECONOMICS. GUESS PAPERS AND NOTES ARE AVAILABLE 0322-3385752 JOIN KHALID AZIZ

  4. ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM. FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA. COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA. CONTACT: 0322-3385752 R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, KARACHI, PAKISTAN JOIN KHALID AZIZ

  5. Describe the preparation of adjusted trial balance Describe and prepare a worksheet and describe its usefulness. Describe the closing process and explain why temporary accounts are closed each period. Prepare closing entries. Outline

  6. 3. Post 2. Journalize 1.Analyze Transactions 4. Unadjusted trial balance Start the next cycle 8.Close 5. Adjust 7. Prepare finance statements 6. Adjusted trial balance Accounting Cycle

  7. So far we have discussed the following steps in the accounting cycle: Analyzing Recording Posting Unadjusted trial balance Adjusting Adjusted trial balance What We Have Done? Let’s start from the worksheet

  8. A worksheet includes following columns: Unadjusted trial balance. Adjusting entries Adjusted trial balance. income statement Balance sheet Worksheet can be used to simplify the preparation of financial statements. What are on the Worksheet?

  9. A Blank Worksheet

  10. Steps in preparation of the worksheet Step 1: Enter the accounts and unadjusted trial balance

  11. Steps in preparation of the worksheet Step2: Entry the adjusting entries’

  12. Steps in preparation of the worksheet Step3: Entry the adjusted trial balance

  13. Steps in preparation of the worksheet Step4: Entry Adjusted Amounts to Income Statement Columns

  14. Steps in preparation of the worksheet Step5: Entry Adjusted Amounts to Balance sheet Columns

  15. Financial Statements can be prepared easily using the completed worksheet. The nature and the preparation of Financial Statement will be discussed in lesson 9 Preparing the Financial Statements

  16. The closing process occurs at the end of an accounting period after financial statements are prepared. Reasons for closing entries: Resets revenue and expense account balances to zero at the end of the period. Updates the retained earnings account to reflect net income and distributions. Closing Process

  17. Temporary accounts are also called nominal accounts. They are opened at the beginning of a period, used to record events for that period and closed at the end of the period. They accumulate data related to one accounting period only. Temporary and Permanent Accounts

  18. Expenses Revenues The closing process applies only to temporary accounts. Income Summary Temporary Accounts

  19. Assets Permanent Accounts Owner’s Capital Liabilities The closing process does not apply to permanent accounts. Permanent Accounts

  20. Set an Income Summary account. Close Revenue accounts to Income Summary. Close Expense accounts to Income Summary. Close Income Summary account to Retained Earnings Steps in the Closing Process

  21. The entries : Dr. Sales Revenue61000 Interest Revenue 2917 Cr. Income Summary63917 Close Revenue Accounts to Income Summary

  22. The entries: Dr. Income 86600 Cr. Cost of Sales 30000 Operating Expense 56600 Close Expense Accounts to Income Summary

  23. The Entries: Dr. Income Summary 22683 Cr. Retained Earnings 22683 Close Income Summary to Retained Earnings

  24. Close revenue accounts to Income Summary. The entries are: Dr. All Revenue Cr. Income Summary The Closing Entries

  25. Close expense accounts to Income Summary.The entries are:Dr. Income Summary Cr. All Expenses The Closing Entries

  26. Close Income Summary account to Retained Earnings. If there is a profit, the entries are:Dr. Income Summary Cr. Retained Earnings If there is a loss, the entries are:Dr. Retained Earnings Cr. Income Summary The Closing Entries

  27. Post-Closing Trial Balance is a list of balances for all accounts that not closed. The purpose of a post-closing trial balance is to verifies that: Total debits = total credits for permanent accounts. All temporary accounts have zero balances Post-Closing Trial Balance

  28. Post-Closing Trial Balance

  29. ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM.FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA.COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA.CONTACT:KHALID AZIZ0322-3385752R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, KARACHI, PAKISTAN

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