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Chapter 4 Key Terms and Concepts

The document outlines the key steps in the accounting cycle as: 1) recording transactions, 2) posting to ledger accounts, 3) preparing an unadjusted trial balance, 4) analyzing and recording adjustments, 5) preparing an adjusted trial balance, 6) generating financial statements, and 7) recording closing entries. It also defines the closing entries to move revenue, expenses, income summary, and dividends to the appropriate accounts.

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Samantha Siau
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145 views1 page

Chapter 4 Key Terms and Concepts

The document outlines the key steps in the accounting cycle as: 1) recording transactions, 2) posting to ledger accounts, 3) preparing an unadjusted trial balance, 4) analyzing and recording adjustments, 5) preparing an adjusted trial balance, 6) generating financial statements, and 7) recording closing entries. It also defines the closing entries to move revenue, expenses, income summary, and dividends to the appropriate accounts.

Uploaded by

Samantha Siau
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Chapter 4 Key Terms and Concepts

Steps in the accounting cycle:


1) Analyze and journalize business transactions
2) Post the transactions to the ledger accounts
3) Prepare an unadjusted trial balance
4) Adjustment data are assembled and analyzed
5) Prepare an optional end of period spreadsheet ( or!sheet)
") #ournalize and post adjusting entries
$) Prepare an adjusted trial balance
%) Prepare the financial statements
&) #ournalize and post closing entries
1') Prepare a post closing trial balance
Closing entries:
1) (lose )e*enue to income +ummary ( debit )e*enue, credit -ncome +ummary)
2) (lose e.penses to income summary ( debit -ncome +ummary, credit /.penses)
3) (lose -ncome +ummary to )etained earnings
a) if net income 0 debit income summary, credit )/
b) if net loss 0 debit )/, credit -ncome summary
4) (lose 1i*idends to )etained earnings ( debit )etained /arnings, credit
di*idends)

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