Appendix A: Comprehensive Review Problem

Appendix A provides a comprehensive review problem Appendix A provides a comprehensive review problem. Students perform each step of the accounting cycle using GAAP.

Prepare a trial balance to summarize transactions during a year. Prepare an adjusted trial balance to reflect period or year end adjustments (AJEs). Prepare financial statements Income statement Balance sheet Statement of cash flows (SCF). Statement of stockholders’ equity

Trial Balance A trial balance is a list of all accounts and their balances, based on the debit (left) and credit (right) schema: Assets == Liabilities + Owners’ Equity plus revenues less expenses

Adjusted Trial Balance Period and year end adjustments are necessary to bring the books up to date. An adjusted trial balance is a list of all accounts and their balances after adjustments. Financial statements are prepared from adjusted trial balance amounts, using meaningful sequencing, titles and subtotals, etc. It’s an art!

Financial Statements Prepared From Adjusted Trial Balance Income Statement Balance Sheet Statement of Stockholders’ Equity Statement of Cash Flows (SCF) Statement of Comprehensive Income (optional)