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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Accounting cycle

From the following list of steps in the accounting cycle, identify what two steps are missing:

a.    Transactions are analyzed and recorded in the journal.

b.    An unadjusted trial balance is prepared.

c.    Adjustment data are assembled and analyzed.

d.    An optional end-of-period spreadsheet is prepared.

e.    Adjusting entries are journalized and posted to the ledger.

f.    An adjusted trial balance is prepared.

g.    Closing entries are journalized and posted to the ledger.

h.    A post-closing trial balance is prepared.

To determine

Accounting Cycle: The accounting cycle refers to the entire process of recording the accounting transactions of an organization and then processing them. The accounting cycle starts when a transaction takes places and it ends at the time when these transactions are recorded in the financial statements of the company.

The steps of accounting cycle are as listed below:

Step 1: Analyze and record the business transactions s in the general journal as they occur.

Step 2: Post the journal entries to their respective ledger accounts.

Step 3: Prepare an unadjusted trial balance by using the unadjusted balances of each account.

Step 4: Assemble and evaluate the adjustment data.

Step 5: Prepare a worksheet for the year ended (optional).

Step 6: Journalize the adjusting entries disclosed at the year-end and post the adjusting entries in their respective ledger accounts.

Step 7:  Prepare an adjusted trial balance.

Step 8: Prepare financial statements such as income statement, statement of owners’ equity, and balance sheet.

Step 9: Journalize and post the closing entries to close all the necessary accounts.

Step 10: Prepare the post-closing trial balance.

To Identify: The missing steps in accounting cycle.

Explanation

Step 2: Post the journal entries to their respective ledger accounts...

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