Week 2 Introduction
Accounting reports business transactions that have already occurred. Accountants act as historians as they identify and record business financial economic activities in various journals and ledgers. The results, in the form of financial statements, are then reported to management for their use.
Preparing, understanding, analyzing, and communicating financial information to interested parties is the heart of financial accounting. It is essential that you understand the mechanics of preparing and analyzing these financial statements and value their usefulness in making business decisions. It may be helpful to think of accounting as the language of business.
Week 2 Outcomes
After completing this week, you should be able to:
Explain the Concepts and Guidelines Affecting Adjusting Entries
Discuss the Adjustment Process and Illustrate Common Types of Adjusting Entries
Record and Post the Common Types of Adjusting Entries
Use the Ledger Balances to Prepare an Adjusted Trial Balance
Prepare Financial Statements Using the Adjusted Trial Balance
Describe and Prepare Closing Entries for a Business
Prepare a Post-Closing Trial Balance
Apply the Results from the Adjusted Trial Balance to Compute Current Ratio and Working Capital Balance, and Explain How These Measures Represent Liquidity
Complete a Comprehensive Accounting Cycle for a Business