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Chapter 4: Q5TI (page 202)

The steps of the accounting cycle are presented below. Identify the correct order of the steps.

a. Journalize and post the closing entries.

b. Start with the beginning account balances.

c. Prepare the financial statements.

d. Compute the unadjusted balance in each account, and prepare the unadjusted trial balance.

e. Journalize and post adjusting entries.

f. Enter the unadjusted trial balance on the worksheet, and complete the worksheet (optional).

g. Prepare the adjusted trial balance.

h. Analyze and journalize transactions as they occur.

i. Post journal entries to the accounts.

j. Prepare the post-closing trial balance.

Short Answer

Expert verified

The correct sequence is b, h, i, d, f, e, g, c, a, j

Step by step solution

01

Explanation on Accounting Cycle

Accounting cycle is the process which is used by the companies to prepare the financial statements.

02

Process in Accounting Cycle

Accounting cycle starts with beginning balances of the accounts, then transactions are analyzed and journalized, after this transactions are posted to respective accounts, then unadjusted balance of each account is computed, then unadjusted balances are entered in the worksheet and completed, after this adjusting entries are recorded and posted, then adjusted trial balance is prepared, after this financial statements are prepared, now closing entries are journalized and posted, and finally closing trial balance is prepared.

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Most popular questions from this chapter

What does the statement of retained earnings show?

This comprehensive problem is a continuation of Comprehensive Problem 1. Murphy Delivery Service has completed closing entries and the accounting cycle for 2018. The business is now ready to record January 2019 transactions. Jan. 3 Collected \(200 cash from customer on account. 5 Purchased office supplies on account, \)1,000. 12 Performed delivery services for a customer and received \(3,000 cash. 15 Paid employee salary, including the amount owed on December 31, \)4,100. 18 Performed delivery services on account, \(1,350. 20 Paid \)300 on account. 24 Purchased fuel for the truck, paying \(200 cash. 27 Completed the remaining work due for Unearned Revenue. 28 Paid office rent, \)2,200, for the month of January. 30 Collected \(3,000 in advance for delivery service to be performed later. 31 Cash dividends of \)1,500 were paid to stockholders. Requirements 1. Record each January transaction in the journal. Explanations are not required. 2. Post the transactions in the T-accounts. Don鈥檛 forget to use the December 31, 2018, ending balances as appropriate. 3. Prepare an unadjusted trial balance as of January 31, 2019. 4. Prepare a worksheet as of January 31, 2019 (optional). 5. Journalize the adjusting entries using the following adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the T-accounts. CHAPTER 4 246 chapter 4 Adjustment data: a. Office Supplies on hand, \(600. b. Accrued Service Revenue, \)1,800. c. Accrued Salaries Expense, $500. d. Prepaid Insurance for the month has expired. e. Depreciation was recorded on the truck for the month. 6. Prepare an adjusted trial balance as of January 31, 2019. 7. Prepare Murphy Delivery Service鈥檚 income statement and statement of retained earnings for the month ended January 31, 2019, and the classified balance sheet on that date. On the income statement, list expenses in decreasing order by amount鈥攖hat is, the largest expense first, the smallest expense last. 8. Calculate the following ratios as of January 31, 2019, for Murphy Delivery Service: return on assets, debt ratio, and current ratio.

What is a classified balance sheet?

For each account listed, identify the category in which it would appear on a classified balance sheet.

7. Accumulated Depreciation鈥擣urniture

A partial worksheet for Ramey Law Firm is presented below. Solve for the missing information. Total 6 5 A J K L M 33 34 35 (a) \( 211,325 \) 202,950 (e) 8,375 (d) \( 24,850 \) 24,850 Debit Credit Debit Credit Income Statement Balance Sheet Net (b) (c) Total (f).
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