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    Preparation of Financial Statements and Completion of Accounting Cycle

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    jenie aira
    The document discusses the preparation of financial statements and completion of the accounting cycle. Financial statements include the income statement, statement of retained earnings, balance sheet, and statement of cash flows. The accounting cycle involves identifying, analyzing, and recording business transactions, which culminates in the preparation of these financial statements according to a standardized process. It consists of 10 steps starting with recording transactions and ending with a post-closing trial balance.

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    Preparation of Financial Statements and Completion of Accounting Cycle

    Uploaded by

    jenie aira
    22 views10 pages
    The document discusses the preparation of financial statements and completion of the accounting cycle. Financial statements include the income statement, statement of retained earnings, balance sheet, and statement of cash flows. The accounting cycle involves identifying, analyzing, and recording business transactions, which culminates in the preparation of these financial statements according to a standardized process. It consists of 10 steps starting with recording transactions and ending with a post-closing trial balance.

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    completion of accounting cycle

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    The document discusses the preparation of financial statements and completion of the accounting cycle. Financial statements include the income statement, statement of retained earnings, balance sheet, and statement of cash flows. The accounting cycle involves identifying, analyzing, and recording business transactions, which culminates in the preparation of these financial statements according to a standardized process. It consists of 10 steps starting with recording transactions and ending with a post-closing trial balance.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    22 views10 pages

    Preparation of Financial Statements and Completion of Accounting Cycle

    Uploaded by

    jenie aira
    The document discusses the preparation of financial statements and completion of the accounting cycle. Financial statements include the income statement, statement of retained earnings, balance sheet, and statement of cash flows. The accounting cycle involves identifying, analyzing, and recording business transactions, which culminates in the preparation of these financial statements according to a standardized process. It consists of 10 steps starting with recording transactions and ending with a post-closing trial balance.

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    Preparation of Financial Statements

    and
    Completion of Accounting Cycle
    Financial Statement

    • Formal records of the financial activities


    and position of a business, person or
    entity
    • Worksheet is used for aid and
    organization of this.
    Preparation of Financial Statements

    • Involves process of aggregating


    accounting information to a standardized
    set of financials.
    • Completed financial statements are then
    distributed to lenders, creditors and
    investors.
    Financial Statements are Prepared in Following
    Orders

    1.Income Statement
    2.Statement of Retained Earnings – also
    called Statement of Owners’ Equity
    3.The Balance Sheet
    4.The Statement of Cash Flows
    Accounting Cycle

    • A collective process of identifying,


    analyzing and recording events of a
    company.
    Completion of Accounting Cycle

    • Series of steps starting with recording


    business transactions and leading up to
    preparation of financial statements.
    • Culmination of these steps is the
    preparation of financial statements.
    Steps in Accounting Cycle

    1. Identify the events to be recorded.


    2. Transactions are recorded in the journal.
    3. Journal entries are posted to the ledger.
    4. Preparation of a trial balance.
    5. Preparation of the worksheet including
    adjusting entries.
    6. Preparation of financial statements.
    7. Adjusting journal entries are journalized
    and posted.
    8. Closing journal entries are journalized
    and posted.
    9. Preparation of post-closing trial balance.
    10.Reversing journal entries are journalized
    and posted. (Optional)

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