Acc 290 Week 3 Discussion Question 1

What are the steps in completing the accounting cycle How do the different steps affect the financial statements What is the effect on the financial statements of missing a step when completing the accounting cycle The process for completing accounting circuit includes ... Analyzing business transactions (to judge what was purchased and what accounts it affects) Journalizing the transactions (place the entries in the correct accounts dr. cr.) Post to ledger accounts (post to the correct ledger account dr. cr.) Prepare a trial balance (used to check accuracy) Journalize adjusting entries (make adjustments to any unrecognized income/expense) Post adjusting entries (post adjusted entries) Prepare an adjusted trial balance (to check for accuracy of errors) Prepare financial statements (construction of the financial statements). Journalize and post closing entries (this step is used to prove that the statements are balanced and that any adjustments are brought forward into the new accounting period). Prepare a post closing trial balance (used to check for the clerical accuracy and only permanent, balance sheet accounts will remain open). The first three steps might occur daily and steps four through eight are typically done monthly, quarterly, or annually. The last two steps typically take place at the