@ 2012, Cengage Learning Completing the Accounting Cycle LO 1 – Understanding the Accounting Cycle

Flow of Accounting Information LO 1 (continued)

Flow of Accounting Information LO 1 (continued)

Flow of Accounting Information LO 1 (concluded)

End-of-Period Spreadsheet (Work Sheet) Unadjusted TB AccountsDrCrDrCrDrCr AdjustmentsAdjusted TB Flow of Accounting Information  Account balances are listed in the Unadjusted Trial Balance columns using the ending balances found in the general ledger. LO 1 (continued)

End-of-Period Spreadsheet (Work Sheet) AccountsDrCrDrCrDrCr AdjustmentsAdjusted TB Flow of Accounting Information  Adjustments are entered here. Two possibilities:  Deferrals – Existing balances are changed  Accruals – New information is entered LO 1 (continued) Unadjusted TB

AccountsDrCrDrCrDrCr AdjustmentsAdjusted TB End-of-Period Spreadsheet (Work Sheet) Flow of Accounting Information  Adjustments are combined with the unadjusted trial balance amounts to provide balances for the Adjusted Trial Balance columns. LO 1 (continued) Unadjusted TB

Adjusted TB AccountsDrCrDrCrDrCr Income State.Balance Sheet End-of-Period Spreadsheet (Work Sheet) LO 1 Flow of Accounting Information  Revenue and expense balances in the Adjusted Trial Balance columns are extended to the Income Statement columns. (continued)

Adjusted TB AccountsDrCrDrCrDrCr Income State.Balance Sheet End-of-Period Spreadsheet (Work Sheet) Flow of Accounting Information  Asset, liability, and stockholders’ equity, balances in the Adjusted Trial Balance columns are extended to the Balance Sheet columns. LO 1 (concluded)