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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

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.    Transactions are posted to the ledger.

c.    An unadjusted trial balance is prepared.

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.    Financial statements are prepared.

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 4: Assemble and evaluate the adjustment data...

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