The Accounting Cycle: A Mini Case Original concept published as: Yopp, M., & Kitchel, A. (2007). Incorporating an Accounting Unit in a Business Plan Project. NBEA Business Education Forum, 61(3), 18-25. Presentations & Curriculum prepared by: Allen Kitchel, Ph.D. Assistant Professor Business & Marketing Teacher Education University of Idaho akitchel@uidaho.edu

Introduction Entrepreneurship Units & Business Plan projects. Thesis Business Plans typically include: an executive summary, a marketing plan, a management plan, a financial plan, and a strategic plan. Advocating a financial planning unit addressing the accounting system. Thesis Accounting is crucial to the success of any entrepreneurial venture or business project. Entrepreneurs with an understanding of the accounting cycle and double-entry accounting are advantaged.

The Accounting Cycle & the Mini-case Identify type of business Create a Chart of Accounts Create General Ledger accounts Use a Multicolumn Journal for original entry Generate transactions for a fiscal period (one month in this example). Journalize transactions. Post Journal entries to General Ledger Record & post Adjusting entries Record & post Closing entries Prepare a Post-closing Trial Balance Prepare Financial Statements Balance Sheet, Income Statement, & Statement of Owner’s Equity. Eight-Column Worksheet Trial Balance, Adjusting Entries, Income Statement & Balance Sheet

Steps in the Accounting Cycle (1) Analyze Transactions (9) Prepare Post-closing Trial Balance (2) Journalize Transactions Steps in the Accounting Cycle (3) Post to Ledger Accounts (8) Journalize & Post Closing Entries (4) Prepare Trial Balance (7) Prepare Financial Statements: Income Statement, Balance Sheet & Owner’s Equity Statement Worksheet Tool for preparing Financial Statements (5) Journalize & Post Adjusting Entries (6) Prepare Adjusted Trial Balance