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

2. Flow of Accounting Information LO 1 (continued)

3. Flow of Accounting Information LO 1 (continued)

4. Flow of Accounting Information LO 1 (concluded)

5. 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)

6. 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

7. 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

8. 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)

9. 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)